Written Analysis and Communication Report on

Hindustan Petroleum Corporation Ltd.:

Driving Change through Internal Communication

SAURABH SHARMA
271161
FMG 27C
Case synopsis

Hindustan Petroleum Corporation Ltd was incorporated in 1974 by combining two

nationalized entities, ESSO of India and Lube India. Due to liberalization of Indian economy
in 1990,49% of HPCL stake was sold to private investors.by 1995. New private companies
were allowed to enter the energy sector which lead to the intense competition in this sector.
To counter this competition HPCL decided to bring the organisation change in 2003 with the
help of internal communication initiatives for internal development and external growth.

Situation analysis

 HPCL has more than 11000 employees and an annual revenue of more than $23
Billion
 It’s product line ranged from lubricants to jet fuel, which shows the rich portfolio of
HPCL in energy sector
 HPCL wanted to bring organisational change through its internal communication so in
2003 they came up with the Project ACE (Achieving Continuous Excellence)
 Vision workshops were part of this project.14 HPCL executives were recruited as
coaches for these workshops
 Each workshop had 20 participants and it lasted for 3 days
 Each coach managed workshops in such a manner so that it can produce a clear
outcome
 The outcome was participants statement of vision for their department, business units
and the company as a whole
 The vision statement for the HPCL given by the employees had a similar pattern
which showed that everyone was aligned to common vision for the company
 Vision workshops followed bottom up approach where each and every employee
participated
 The main purpose of these workshops was to spread the ownership at every level so
that employee feels engaged in the company
 The next step was to implement the vision given by HPCL employees for which 20
cross functional teams were created
 These teams were sent to field to find the customers and to understand their customer
views on HPCL against other competing companies
  After doing market research these cross-functional teams came up with insights to
improve HPCL retail performance
 HPCL modernized its retail stores by upgrading signs, canopies and other physical
structures to give HPCL stations greater visibility and more unified look
 In rural areas HPCL started “Hamara Pumps” which was a small-scale outlet which
required only one-tenth of the cost of standard retail facility. It gave HPCL brand
presence in rural areas
 HPCL believed in transformational communication for influencing employees
whenever they wanted to alter the strategic or operational course of the organisation
 HPCL used digital platform for transformational communication. My HPCL was the
intranet portal of HPCL
 “eCare” section of the portal offered a programme ICS (Internal Customer Service)
which allowed employees to submit a service or a grievance to the company. It was
responded within 3 days by ICS officers
 “Coin Your Idea” was one more programme where employees had opportunity to
propose new business practices for company leaders. If the idea is good, then
employees are rewarded as well
 Intranet portal also provided blog facility- one for the top management and one for all
other employees. It also had comment feature to promote two- way communication
 Apart from intranet portal communication, HPCL executive also believed in one to
one interaction due to which employees felt more connected with the company and
also helped executives to make bond with lower level employees
 HPCL also had large scale town hall meetings which gave leaders an opportunity to
connect with people from far flung regional offices

Defining the Problem

 The major problem in HPCL was that there was a gap in their external
communication. They were not able to connect with their customers very well since
they focused on internal communication
 HPCL share price has fallen in last few years. It has fallen to Rs 270 from 52 week
high at Rs 492.80
 Source-Moneyconrol

 Cost of logistics is high for HPCL when compared to other industry players. It is one
of the concerns since it affects the profitability of the company
 ACE Project of HPCL might lead to vision fatigue which results in confusion,
cynicism and a loss of engagement on the part of employees

Causes of Problems

 HPCL focused too much on their internal communication as they thought their
employees will lead to the HPCL growth but they did not focus on the final consumer
of their product
 Cost of logistics increased for HPCL as they did not adapted new refining
technologies which was the competitive advantage of their competitors
 The main cause behind falling share price of HPCL was increase in the price of crude
oil so their cost of operations went up and thereby lead to fall in their share price
 HPCL was lacking in consistency as they were continuously altering the vision which
might have created a confusion on the part of employees due to which they were not
able to perform to their potential
SWOT ANALYSIS
STRENGTHS
 Owns and operates the
largest lube refinery in India,
producing the lube basis oils
of international standards.
 Network of 1400 retail outlets
in various stages of
construction.
 First Indian private company
to enter petrol retailing
 Customer oriented company
OPPURTUNITIES
 Investments in the renewable
resources
 Increasing the natural gas
market globally
 Increasing demand due to
heavy industrialization
 Demand supply gap in India
WEAKNESS
 Less market share as
compared to IOC
 More focus on the internal
communication rather than
external communication
 Government regulations
 Falling share price
 Increasing refining cost
THREATS
 Increase in the market share
of the private players
 Unionizations
 Under performance
 Fluctuating in the international
crude prices
Available solutions

 HPCL can focus on Corporate Social Responsibility activities which will gain public
support and can also increase their market share
 HPCL can improve their refinery process which will reduce the cost of logistics and
therefore increase their profitability
 HPCL can expand their operations to other countries which aligns their vision to be
global
 HPCL can diversify their business by entering into different domain which will help
them to grow their business

Best Solutions and “Why”?

 HPCL should focus on Corporate Social Responsibility activities since it helps in

building brand image and also HPCL is only company who has seen 10% increase
in their market share whereas other companies market share has dropped down
 HPCL should diversify their business by entering into different domains since the
future will be of electric cars which thereby result in decrease in demand of fuel

Implementing the plan

 HPCL can start an initiative “Adopt a Plant” under their Corporate Social
Responsibility initiative where they can encourage their customers to adopt a plant by
giving 1% cashback on their next purchase of fuel. This will not only increase their
goodwill but will also be beneficial for environment. They can start this initiative
from their retail fuel stations
 HPCL can diversify their business by opening general store chain all over India
where every household item will be available under one roof. General stores can be
opened in metropolitan cities in initial stage. If the response is good from these stores
then it can be further expanded to other cities
Contingency Plans

If the above plan fails to produce the desired outcome in that case HPCL can invest in
renewable sources of energy particularly solar energy. Solar energy has diverse
applications. It can be used to generate electricity without access to the energy grid, to
distill water in regions with limited clean water supplies and to power satellites in space.
It can also be integrated into the materials used for buildings.