Group Project of OBII

Submitted By:- Group 7 Mandeep Nain 020) Shobhit Yadav (08EM-041) Uday (08EM-049) Muneeb Rehman (08EM-022) (08EM-

AN OVERVIEW OF STRUCTURAL AND FUNCTIONAL CHANGES UPON FORMATION OF BSNL

Overview Of Structure
Consequent upon liberalization policies of Government of India and changes in the global economy due to globalization process it was decided to separate DOT and DTS as a precursor of corporatization. DOT Department of Telecom - For policy making. DTS Department of Telecom Services For execution of work. Subsequently the Government has decided to transfer the business of DTS to BHARAT SANCHAR NIGAM LIMITED with effect from 01-10-2000. BSNL has been incorporated as a company with limited liability by shares under Company Act , 1956 with

Overview Of Structure
Thus BSNL is a fully Government owned company with an assessed capital of nearly 63,000 crores and a capital structure as follows :i.500 Crores share at the rate of Rs. 10/each =5,000 crores (Equity capital) ii. Receivables and Creditors =1,500 crores iii. Long term debts + Reserves =Balance Amount BSNL has almost 300000 (Three Lacs ) Nonexecutive Employee & 50,000 Executive

Government Company
GOVERNMENT COMPANY - means any company in which not less than 51 % of the paid up share capital is held by the Central Government or State Government or partly by Central and State Government. It includes a company subsidiary to the Government Company .BSNL 100% paid up share capital is held by the central government.

Limited Company
It has a separate legal entity. It has a common seal. It has a perpetual succession. The liabilities of the members are limited since most of the companies are Ltd. Companies. A Board of Directors manages the Company. It must have a registered office

BSNL Direction, Design, and Effectiveness Relation with the External Environment, Internal situation & role of top management team
External Environment
Opportunities Threats Uncertainty Resource Availability

Organization Design
Structural Form learning vs. efficiency Information and control systems Production technology Human resource policies, incentives Organizational culture Interorganizational linkages

Strategic Direction CEO, Top Management Team

Define mission, official goals Select operational goals, competitive strategies

Effectiveness Outcomes
Resources Efficiency Goal attainment Competing values

Internal Situation
Strengths Weaknesses Distinctive Competence Leadership Style Past Performance

Organizational Response to Manage Environmental Uncertainty

Domain Choice; Recruitment; Vertical Integration; Buffering; Smoothening; Advertising; Contracting; Mergers/Acquisitions/Strategic Alliances; Lobbying;

Internal Situational Factors

1. WEAKNESSES
Poor marketing strategy Bureaucratic organizational set up Inflexibility in mindset (DOT period legacies) Legacy of poor service image Huge and aged manpower Procedural delays Lack of strategic alliances Problems associated with incumbency like outdated technologies, unproductive rural assets, social obligations, political interference, Poor IT penetration within organization Poor knowledge Management Mechanistic structure

Internal Situational Factors

2. Strength
Experienced telecom service provider Total telecom service provider Huge Resources (financial & technical pool) Huge customer base

Assessing Environmental Uncertainty Simple DOT 1. Small number of external elements, and elements are similar 2. Elements remain the same or change slowly
C H A N G E

Stable

Complex

Unstable

Conditions for Culture Change:

When fundamental change is undergoing in environment & company being always value driven; Industry is competitive & environment changing quickly; When org being mediocre or worse; When company is truly at threshold of becoming a large corporation; When company is growing rapidly; When company is young and small; When there is change in leadership

ORGANISATIONAL CULTURE ASSESSMENT FROM DOT TO BSNL

Organisational culture in BSNL is under the process of changing from Bureaucratic(DOT) to Corporate.

CAUSES OF BUREAUECRATIC CULTURE IN DOT. The organisationa was very controlled and structure place.Formal procedures govern what people do. Management style was characterized by the security of employment,stability in relationship. Organisation followed formal rules,and policy . Organisation efficiency was very critical. Mechanistic Environment

Conditions for change in Bureaucratic culture,( In BSNL) Govt changed the telcom license policy &FDI. Many of the competitor comes into existance : Monopoly( DOT ) Perfect Competition.(BSNL). Choice of consumers

Govt. Telecom Policy Changes in India 1999 (Aug) License fee (revenue share) reduced from provisional 15% to 12%, 10% & 8% on Circle wise basis (A type, B type & C type circles) 2000 TRAI Act amended & separate tribunal proposed

2001 (Jan) TDSAT started functioning 2001 (Jan) Policy announced for additional licenses in Basic and Mobile Services Limited mobility allowed to Basic Services (CDMA spectrum allotted to Basic Service Operators)

2001 (Jan)

2003 (Nov) Unified Access (Basic & Cellular) Service License (USAL) introduced as a first step towards Unified License Regime.Technology neutral and allows provisioning any kind of service. 2004 (Apr) 2004 (Oct) always on 2005 (Nov) 2005 (Dec) 2007 (Oct) 2008 (Feb) 2008 (Aug) auction. 2008 (Aug) services 2008 (Aug) issued License fee reduced by 2% across the board for all the access licenses. Announcement of Broadband Policy to provide high speed internet service. FDI limit increased from 49% to 74% in Telecom Sector. ILD & NLD Annual License fees reduced from 15% to 6%. Dual technology allowed. 120 new UASL licenses granted by DOT. Issue of 3G guidelines for spectrum Foreign players allowed to bid. allocation through BWA

Guidelines for auction & allotment of spectrum for issued

Guidelines for Mobile Number Portability Service License

External Situational Factors

1.Oppourtunity Can Improve on public sector image Fuller utilization of slack resources 2.Threats Competition from private operators ,High Efficiency Employees are not adaptable with fast technological changes

Strategy Direction official

Vision:
To become the largest telecom Service Provider in South East Asia.

Mission:
To provide world class State-of-art technology telecom services on demand at affordable price. To provide world-class telecom infrastructure to develop country's economy.

Strategy Direction Operative

Skills & knowledge Skill sets in traditional fixed line provision, maintenance, and administration. Professional & new skills lacking Communication & Interaction Is more in the government mode. Marketing & PR attitudes, skill sets lacking Employee Motivation At present very low. Decision Guidelines - centralized decision making. Non flexible(Rigid) policies & Procedural delays Standard of performance- Legacy of poor service image Limited number of value added services

Management in BSNL
BSNL, has about 59,421 officers, of which 25,830 are entry level executives, 31,666 middle level executives and 1925 top level executives. Top Level : Executive Most of the executives recruitment was done by UPSC through the IES exams as ITS Officers before the year of 2000. These officers are working on deputation as DOT Employee & most of them are not absorbed by BSNL. 31,666 middle level executives 5% ITS recruited executive(not absorbed in BSNL) +5%Direct recruited executive by BSNL +90% promoted officers in the time of DOT(absorbed in BSNL) 25,830 entry level executives. 50% executives are direct graduate engineers recruited by BSNL + 50 % executives are DOT recruited (absorbed

Middle level : Executive

Entry Level : Executive in BSNL)

Role of Executives in BSNL : They work across entire length and breadth of the country in highly inaccessible and remote areas like North East, Andaman Nicobar islands, J&K, Jharkhand, Assam where insurgency is a challenge always to face. Face most challenging situations like earthquakes, flood, tsunami, etc

ORGANISATIONAL SET UP OF BSNL (Previous)

C M D

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r . D SD r G . D s SD, r G . D s SD, r G . D s SD, r G . D s D D D G Ds D G Ds D G Ds D G Ds D G P & r o T j e M c a t i C n it r e c n l ea sn a s R k e Fg oi o r n c se c e

PRESENT ORGANISATIONAL SET UP OF BSNL IS STILL CENTRALIZED

C M D

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i r s I i I n ) e Fs l vu . e A r v i c e a n R D

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a r k e t Mi n a g r k e t Mi n a g r k e t i n D & C M N O D & C M N O D & C M

S e r v i c e F u n c t i o k e t i n g u n c t i o n i n c l u d e e t w o r k I n f r a s t r u N e t w o r k D e s i g n t i o n s & M a i n t e n H u m a n R e s o u r c y A s s u r a n c e

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M A ( F ) T D R M E A s G M T s D E s

s / DD GI R M s / S D WC I RA T ( O O R ) D I R D G M / D I R ( A D M ) E s E O T s D As / DA J T E EE O s Ts s A O s C A A J A A O A O O O s

D A D J T

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STRUCTURE OF BSNL
1. 24 Telecom Circles and 2 Metro Districts at Chennai and Kolkatta. 4 Transmission Maintenance Regions. 4 Telecom Project Circles and IT Circle at Pune. Telecom Quality Development Circles. Assurance, Testing and

2. 3. 4.

5. 6.

Data Network Circle and 5 Telecom Factories. Advanced Level Telecom Training Centers one each at Ghaziabad Jabalpur, and NATFM at Hyderabad, 11 Regional Telecom Training Centers (RTTCs) and one circle telecom training center in each telecom circle. 21

Recommended structure for BSNL

Emphasis on Marketing is required for tracking new product ideas. New service process is to be emphasized Most functions should be decentralized Formalization is limited to foster change and promote new ideas Overall structure should be organic; job roles should be less structured

PORTERS GENERIC STRATEGY MATRIX FOR BSNL

Broad

Market we seek

OVERALL COST LEADERSHIP - Landline service - Internet service - Cellular service COST FOCUS - Leased circuit - Broadband

OVERALL DIFFERENTIATION

DIFFERENTIATION FOCUS - Intelligent network services

Narrow

Cost Advantage Differentiation based based we seek

Analysis of Porter Strategy for BSNL: Applying strategic framework BSNL indicates that there are various products offered by BSNL and there are various segments of customers for each product and each one would require a different approach. Hence if the company has to service all the segments then it has to have a premium service for the differentiation focus group at a premium rate. The bulk of corporate callers would like the company to strike a right balance between price and differentiation. The low calling group of residential or rural subscribers would like to respond to the cost leadership. The above discussion indicates that the issues faces by the organization during this changing competitive environment and process of restructuring from government department to company are complex and need to be tackled strategically

Miles and Snows Strategy Typology (contd)

Recommended strategy for BSNL is Analyzer
Balances efficiency and learning; tight cost control with flexibility and adaptability Efficient delivery of service & quality ; emphasis on creativity, research, risk-taking for innovation

But Company most of the time acts as Reactor

-No clear organizational approach; design characteristics may

shift abruptly depending on current needs

Four Approaches of Effectiveness Values STRUCTURE

Flexibility

F O C U S

Internal

Human Relations Emphasis For BSNL is most concern to improve the effectiveness Primary Goal: HRD Subgoals: cohesion, morale, training Internal Process Emphasis
Primary Goal: stability, equilibrium Subgoals: information mgt, communication

Open Systems Emphasis (same with HRE) Primary Goal: growth, resource acquisition Subgoals: flexibility, readiness, external evaluation Rational Goal Emphasis
Primary Goal: productivity, efficiency, profit Subgoals: planning, goal setting
External

Control

Integrated Effectiveness Model Strategy for BSNL

Human Relations Emphasis : It is combination of focus on Internal & flexible structure of the organization. BSNL need to overhaul its Human Relations Emphasis and should focus on Tie up with top business schools in India for training their managers at various levels. Redeploying its manpower from bigger cities to smaller ones Coming out with VRS/CRS for manpower above the age of 50. Creating value through employee motivation and should develop reward and punishment system Effective knowledge management within organization Preventing manpower churning The VRS/CRS scheme is likely to be opposed by the unions and the implementation may be difficult in the politicized environment. However, rightsizing the organization is of paramount importance for the long run interests.

Integrated Effectiveness Model Strategy for BSNL(Continue) Open systems Emphasis : BSNL should have clear technology strategy in line with its mission of providing services with world class State-of-art technology at affordable prices. Since the Telecom Industry is under going frequent technological revolutions the product cycles are very short. BSNL should go in for (1) innovative products based on convergent technology in order to acquire dominant market position. This can be achieved by Replacement of all the outdated technologies immediately, Redeployment of unutilized capacities should be considered first. Early deployment of cost effective Wi fi/Wi max Technologies Migrating to NGN (Soft Switch) on large scales, which will unable seamless integration of upcoming technologies

Increasing the capital investment in convergent technologies even if it renders certain in use technologies

2.BSNL should initiate Customer Orientation Strategy to retain existing customers as well as to attract new customers by Creating a Service-Oriented culture within the organization by linking incentives to customer satisfaction. Introducing flexible Registration Terms so that new customers are attracted. Promoting/Introducing user-friendly service systems such as Electronic Clearing system, internet or E-seva for bill payment Educating the customer about services in detail and respective tariff structure Introducing service at door-step.

Thanks