Xyz Company Designing Work Organisations Project Report

(India) Ltd. is one of the most outstanding public enterprises in the country today. It is one of the “NAVRATNA ENTERPRISES” and ranks among the top five companies in India. It is India’s flagship natural gas company, & integrated all aspects of the natural gas value chain (including Exploration and Production, Processing, Transmission, Distribution and Marketing) and its related services.

In a rapidly changing scenario, XYZ COMPANY (India) is spearheading the move to a new era of clean fuel industrialization, creating a quadrilateral of green energy corridors that connect major consumption centres in India with major gas fields, LNG terminals and other cross border gas sourcing points. XYZ COMPANY is also expanding its business to become a player in International market & has completed nearly two and half decades of an eventful journey. Starting with a natural gas transmission company, it is today an integrated energy company along the natural gas value chain with global footprints.

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Having started as a gas transmission company during the late eighties, it grew organically over the years by building a large network of natural gas trunk pipelines covering a length of around 7000 Km. Today, XYZ Company has interests in the business of natural gas, LPG, liquid hydrocarbons and petrochemicals, the latter being value added products. The company has also entered in telecom sector by leasing bandwidth available through the OFC which is laid along the gas pipelines for their operations and maintenance.

XYZ COMPANY has also diversified into exploration and production, city gas distribution and is steadily developing an overseas presence etc. XYZ COMPANY is one of the leading public enterprises with a consistently excellent financial track record. Turnover during the last ten years has shown a compounded annual growth rate of 13 percent. The company recorded a turnover of Rs 180. 08 billion and a profit after tax of Rs. 26. 01 billion in FY 2007-08. The Company has also received authorization from the Ministry of Petroleum and Natural gas to lay 5 new pipelines and in addition, augmentation of 3 existing pipelines is also being taken up.

This will lead to doubling of pipelines length and transmission capacity in the next 4 to 5 years. VISION- Be a leading company in natural gas and beyond, with global focus, committed to customer care, value creation for all stakeholders and environmental responsibility. MISSION- Accelerating and optimizing the effective and economic use of natural gas and its fractions to the benefit of national economy. MAJOR BUSINESS SEGMENTS • Natural gas • Petrochemicals • Exploration and production • LPG and other Liquid hydrocarbons • Telecommunication HISTORY OF THE ORGANISATION XYZ COMPANY (India) Ltd. India’s principal gas transmission and marketing company, was set up by the Government Of India in August 1984 to create gas sector infrastructure for sustained development of the natural gas sector in the country. The 2800 Kms Hazira-Vijaipur (HVJ) pipeline became operational in 1991. During 1991-1993, three LPG plants were constructed and some regional pipelines acquired, enabling XYZ COMPANY to begin its regional gas distribution in various parts of India. XYZ COMPANY began its city gas distribution in Delhi in 1997 by setting up nine CNG stations, catering to the city’s vast public transport fleet.

In 1999, XYZ COMPANY set up northern India’s only petrochemical plant in Pata. XYZ COMPANY became the first infrastructural provider category II Licensee and signed the country’s first service level agreement for leasing bandwidth in the Delhi-Vijaipur in 2001, through its telecom business XYZ COMPANYTEL. In 2001, XYZ COMPANY commissioned worlds longest and India first cross country LPG Transmission Pipeline from Jamnagar to Loni. XYZ COMPANY today has reached new milestone with its strategic diversification into Petrochemicals, Telecom and Liquid hydrocarbons besides gas infrastructure.

The company has also extended its presence in Power, Liquefied Natural Gas re-gasification, city gas distribution and exploration & Production through equity and joint ventures participations. SWOT ANALYSIS Strengths: • XYZ COMPANY (India) LIMITED is the country’s largest gas transmission company in India with 88% market share. Through that XYZ Company acts as a single gas transmission company, and taking the leverage through this dominance. • XYZ COMPANY (India) LIMITED currently owns and operates around 58% of the total onshore pipeline network, which shows its potency. XYZ COMPANY is present in complete value chain of Gas business, through transmission, gas processing to marketing. • XYZ Company (India) has signed a technology license agreement with Mitsui Chemicals for a second high-density polyethylene (hdPE) plant at its Pata petrochemical complex in Uttar Pradesh, India. • Vertical integration in complete Gas business leading to cost reduction. • XYZ COMPANY is dominating player in natural gas trading. Through 85% market share XYZ Company is showing its control in the market. • Major petrochemicals involvement is also showing its strength. Strong Revenue Growth (turnover of Rs. 18,008 Crores in FY 2007-08, a 12% increase, as against Net Sales of Rs. 16,047 Crores in the previous year) • XYZ COMPANY is going global in exploration business, company is growing in all its business segments • Controls gas transmission infrastructure for example: Pipe lines. • Share of LNG import projects and strong and Diversified Asset Portfolio Weakness: • The biggest problem which is faced by XYZ COMPANY is “High Subsidy burden” which is reducing LPG realization. • XYZ Company has to accept all rules and regulation of government. There is no tax benefit with respect to Section 80IA since Demerger is delayed. • XYZ COMPANY has less visibility over the contracts for new expansions in transmission business. • XYZ Company has very limited financial or operational freedom as a government undertaking. • Cost and efficiency disadvantages • Lack of upstream gas exposure • Limited Exposure to Global Markets • Weak Capital Returns Opportunities: • XYZ COMPANY finds huge gas in KG and Mahanadi basin increasing the availability of natural gas. • Petrochemical industry expected to grow at CAGR of 17% over a period of 3 years. This growth needs petrochemicals capacity expansion. The overall gas production is set to double within 3 to 4 years thus demand meeting the supply . This may result in government deregulating the natural gas prices. • Leveraging pipelines for Telecom. • Entering into exploration business, which is going to boost the realization. • Potential for efficiency gains • Transmission system upgrading/expansion • Strong domestic energy demand growth. • Increasing Demand for LNG • Expanding Indian Natural Gas Market Threats: • Rise in natural gas prices can lead to reduction in margin in petrochemical business. The main problem is that the price of gas is regulated by the government. Domestic marketing makes the company subject to threat of subsidy burden and pricing policies of petroleum ministry. • Petrochemical prices may go down in the next two years on account of capacity additions in the industries. • Rising investment requirement for new upcoming project. • Changes in national energy policy. • Intense Domestic Competition. • Shift to Alternative Sources of Energy like hydro energy, nuclear energy, wind energy, thermal energy. • Fluctuation in Gas and Petrochemical Prices. Business Segments •Gas Transmission •Gas Trading •Liquid Hydrocarbons •Petrochemicals •LPG Transmission •XYZ COMPANYTEL •E&P •Power

CORPORATE STRATEGY The company has developed a Strategic Plan for the period 2007-12. The goal set by the company includes doubling of its bottom line by the year 2011-12. The strategy developed to realize the set goals is as under: ? Gas Sourcing & Marketing: Tying- up with producers and suppliers for marketing and transmission of natural gas on long term and sustainable basis. This is being realized by securing more gas from various producers, thereby increasing transmission and marketing volumes. ?Gas Transmission: Expanding of pipeline infrastructure from 7,850 km to about 12,000 km with the laying of new pipelines by 2011 -12.

For achieving this, execution of various new pipelines at a cost of around Rs. 30,000 crores is in progress. ?City Gas: Pursuing of City Gas distribution opportunities in various parts of the country. This requires introduction of Compressed Natural Gas for the automotive sector and Piped Natural Gas for commercial and domestic use in more number of cities in a phased manner. The same is being realized by participating in PNGRB’s bidding process for various cities and executing city gas projects in those cities. Petrochemicals: In the area of Petrochemicals business, the company is examining possible options for expansion of its Petrochemical Complex at Pata and is exploring green field participation in new ventures in India and abroad. For achieving this, expansion of Petrochemical Complex at Pata is being carried out in phases and participation in new field ventures is being undertaken through equity stake, while also exploring new ventures through JV route. ?E;P: The company also plans to strengthen E;P capability and resources to participate as a major partner / operator in Domestic E;P/ CBM bidding.

This would help in developing E;P as a self-sustainable business for augmenting additional supplies of natural gas. For this, investments are being made in both domestic on-land and off-shore fields, with a balanced portfolio of developmental and exploratory projects. ?Globalization: On the globalization front, the plan of the company is to focus on areas having synergy with the existing businesses by entering into new and emerging gas rich countries with focus on sourcing of gas and participation in downstream activities. Structure and Systems

Functional Structure The structure and reporting in the company is functional. The functions under each Director are clearly defined. Directors are Government of India appointees under a five year contract. Systems Employees below company “Directors” are on XYZ COMPANY’s payroll. Employees under various functions are located all over India and work under Executive Director, General Manager or employee in charge of the facility (gas compressing/ distributing station or petrochemical plant). Right now each facility of XYZ COMPANY is under a General Manager.

This GM is from O;M (operations and management) if the project is established one, otherwise it is under GM from P;E (projects and execution). Once a project is up and running or commissioned it is handed over to O;M group. To finish a project or to run and maintain a project employees with various functions come together. They are assigned their roles by their functional heads and report to the same. The functional heads then report to OIC or Officer in Charge. Following is the organogram of BCPL, Brahmaputra Cracker Petroleum Limited, a joint venture a JV between the Government of Assam, XYZ COMPANY(I) Ltd. OIL (India) Ltd. ; NRL with XYZ COMPANY(I) Ltd. as main promoter (70% stake). Following is the pyramid under the functional directors. A recruit usually starts with title of GET or Graduate Engineer Trainee. Recruitment is usually done through campus placements or all India entrance examinations announced in newspapers and website. This procedure is highly selective. XYZ COMPANY only goes to IITs for its campus placements. A GET remains on probation for a year and thereafter assumes designation of “Engineer”. Subsequent promotions are scheduled after 3 years. This duration increases with the pyramid.

XYZ COMPANY is a public sector undertaking where jobs are secure and structure hierarchical, with pay packets are larger than any other government employee at comparable designation, designations and titles are key motivator. Promotions are based on CRs (Confidential Reports) filled by direct superiors. This makes designations even more important. Promotions in practice are influenced greatly by factors other than pure performance. Culture The culture of the company is that of a private firm, zero absenteeism, employees take ownership of their work, project execution is efficient and tendering is transparent.

This company has a very small workforce compared to its huge profits. Most of its business is of gas transmission which after setup needs low workforce for maintenance. Employees say that they feel motivated to work for XYZ COMPANY because it is the best paymaster around. Still 2300 officers went on an indefinite strike on 7th January 2009 ignoring the appeals of then XYZ COMPANY India Chairman U D Choubey along with executives from 14 public sector oil firms who form Oil Sector Officers’ Association.

When we explored reasons XYZ COMPANY officers explained that they were not given their due in the revised pay structure under 6th pay commission. Oil Sector Officers’ Association sought to bridge the gap between the wages offered by the private sector and public sector oil companies, seeking an over four-fold increase in the basic salary of entry level officials and almost 11-fold increase in salaries of the board-level directors. XYZ COMPANY officials say it was needed because private sector is now poaching its employees with promise of higher salaries.

XYZ COMPANY employees went on strike with the employees from other oil sector companies to show their support against the common enemy. Employees at XYZ COMPANY are treated well. They receive perks such as excellent medicare, fast soft loans for homes, automobiles and consumer durables, petrol and mobile expenses etc. Employees say perks are way better than with any other oil firm. XYZ COMPANY also grants considerable funds for social events on festivals and casual family get together are a norm. XYZ COMPANY colonies provide excellent living environment for families of its employees with well developed sports facilities and shopping centres.

This integrates social life of the family with office of the employee, eases stress at job and creates a better work life balance. This instils a sense of belonging in employees. Employees feel ownership in company’s aspirations and challenges. XYZ COMPANY was rated as one of the Best Employers in India by Hewitt Associates in 2004 and was adjudged as an Organization with Innovative HR Practices by HT Power Jobs. If compared to private sector companies in this sector pay packages and perks may fall short but XYZ COMPANY makes up for it by providing employees with less stressed work environment.

Employees at XYZ COMPANY feel a sense of pride in working for a government company. Employees have returned from private companies stating that they feel stressed after compromising their ethics at work. The best XYZ COMPANY could do for it was to remain a lean organization; it has outsourced most of its work while keeping its core competence of efficient O;M (operations and management) and P;E (project execution) capabilities while other PSU in the sector feel the hang of enormous work force.

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