PUBLIC SECTOR - A perspective

SECTOR UNDERTAKINGS
By S Niyogi, Director(Personal),Gas Authority of India Limited

Restructuring of Public Enterprises has gained utmost importance due to change in the overall market dynamics as a result of the opening up of Indian Economy. With the population crossing One Billion Mark, the entire world is looking for business opportunities in India. Moreover, with the development of Internet and E-commerce Technologies, India has become a global market place. Indian customers will be the real kings with all the global giants vying for a piece of smile on their face.

With increased awareness and more and more demands from the customers, any organisation, for its survival, will need to acquire competitive edge. This has compelled even the PSUs to contemplate organisational restructuring and taking a new look into their business processes. The Government of India in 1995 had set up a strategic Planning Group for preparing recommendations on restructuring of oil and gas industry along with strategies for developing an internationally competitive hydrocarbon sector. Accordingly, some of the major Oil and Gas PSUs of the country were conferred Navaratna Status with increased autonomy and each one of them took giant strides to face the upcoming challenges of "Phased Dismantling of Administered Price Mechanism and Deregulation of Oil and Gas Sectors".

The mandate of globalisation for Navaratna PSUs will necessitate an organisational structure to support identification of overseas business opportunities and their development and implementation.

To achieve higher productivity, increased market share and future proof strategies, the orientation of the organisational values and processes must have to be focused towards customers, innovation/knowledge and technology.

Disinvestment of Public Enterprises or partial privatisation is aimed to introduce more professionalism in the boards of PSUs.

GAIL is preparing itself for the changing scenario through reorganisation /restructuring.

In case of GAIL, the basic aim of restructuring will be to facilitate alignment of organisational structure with the business process of GAIL in the most effective and efficient manner for implementing its strategic plans and missions.

In the present scenario, an organisation like GAIL is likely to organise its business under two distinct categories: -

Profit Centres (Business Units)
Support Centres (Shared Services)

Profit Centres (Business Units)

Transmission and Distribution
Petrochemicals
Gas Processing
LNG
Exploration and Production
Joint Ventures
Telecommunication and Information Technology

Support Centres (Shared Services)

Finance
Information Technology
Centres of Excellence Innovation Circles
Business Development/Planning

In order to implement the organisational restructuring of PSU like GAIL, the following points need to be kept in focus:

Study of the prevailing economic situation in the country and the global market at large.
Evaluation of the impact of economic measures on the GAIL's area of business.
Assessment of business environment in the country.
Performance short analysis of the organisation and right mixing of core strength, strategic strength, opportunities Vs. Profitability of various business
Re-engineering of business processes and method based on the critical success factors of the organisation.
Investment/Disinvestment decision to achieve productivity and profitability enrichment and customers delight through improved services.

The restructuring process shall necessarily lead to an organisation, which will successfully integrate innovation into its daily business practices. Typical of such characteristics are as follows:

Management is heavily involved in fostering innovation as a critical to long-term success.
High importance is placed on cross-functional communication.
Open to outside ideas.
Creation of entrepreneurial culture within the organisation and suitable empowerment of all levels.
Elimination/reduction of multiple supervisory chain of approvals for initiation and support of new ideas.

The remodeled organisational structures process and culture must support innovations through continuous generation, nurturing and application of innovations in order to create marked difference in the current business and drive fresh initiatives to take a quantum jump for its future business.

The organisational structure is required to be designed or redesigned to look into the future, to see what is required for high growth performance, for internally living up to our ambitions, and externally meeting people's expectations.

Prevailing strategies, structures and systems will not excite people in the Oil and Gas PSUs with traditional outlook and delight its demanding customers sufficiently to deliver quantum growth being envisaged by the Oil and Gas PSUs'.

To achieve such a goal, the process of restructuring has to be a serious business for PSUs and will require dedicated managers supported by people from Centres of Excellence who may be attached to this project part time. These teams will chart the road map for the future of the PSUs to attain their objectives through every single business units, departments, functions and in every location.

If we can create people who understand the business and who understand leadership, it will be easier to create a system and develop ideal organisational/business process.

People will be at the heart of corporate capabilities in this Millennium. This needs to be realised and the mould of typical Public Sector Managers needs to be broken. Organisations of tomorrow will be flatter by way of turning more and more of its business (big or small) units into virtual companies and creative more and by creating more internal venture teams to institutionalise entrepreneurship.

Corporations those promote personal growth, attract best people. Best people seek ownership and best companies provide it through entrepreneurial culture. Authoritarian Management is being replaced today by Networking People Style of Management (NPSM) characterised by horizontal co-ordination and support. PSUs also need to adopt NPSM style of Management, which is future focused and team oriented.

For Public Enterprises to be successful in competitive Indian Economy in addition to restructuring, the policies and frameworks under which the PSUs work today, must change towards better autonomy in real sense. For creating level playing ground for the PSUs, however, Gas Authority of India Ltd., with its culture of excellence in the highly skilled manpower and with globally competitive management skill, will be the champion of tomorrow's global business of Oil and Gas.