Final Report of Management on PSO
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Transcript of Final Report of Management on PSO
INTRODUCTION TO MANAGEMENT
Final reportOn
Submitted bySYED REHAN ALI
MBA-(Evening)
FacultyMrBABER WAHAB
(Course Mentor)
Date of submission 30th
APRIL 2009
SP09-MB-
ACKNOWLEDGEMENT
Fore mostly I thank Almighty ALLAH who rewarded me with the ability to think work and deliver what I
assigned to do
I would like to thanks the following peoples for their cooperation amp helpful comments to make this report
MrBABAR WAHAB (Course Mentor) Assistant Professor (MAJU)
Mr Sayed Tamiz Uddin Manager (Public relation) Pakistan State Oil
I would also like to thank my parents for their unconditional love and concern that resides me throughout my
educational levels
Once again I would like to thank my course mentor of ldquoPrinciples of Managementrdquo and Manager ndashPR
(Pakistan State Oil) who assists me time to time to make quality report I would like to pay him (both) a note
of thanks
2
LETTER OF TRANSMITTAL
To
Mr Babar WahabCourse MentorManagement
Sir
As this report is concerned with the Management I have gathered all the
information through website and meeting with the Public Relation manager of
(PSO) I make my total efforts to fulfill the requirements regarding this project
In this report main focus is on ldquohow Management functions performs in an
organizationrdquo And I tried my best to handle the entire management process
under your guidance
I am thankful to you that you give me an opportunity to make this report under
practical scenario
Yours truly
SYED REHAN ALI SP-09-MB-0159
3
Acronyms
CNG Compresses Natural Gas
DEO Diesel Engine Oil
EDR Employee development report
ERP Enterprise Resource Planning
GMIC General Manager Industrial Consumer
HBL Habib Bank Limited
IPP Independent power plants
KESC Karachi electric supply cooperation
KPC Kuwait Petroleum Corporation
KSE Karachi Stock Exchange
LPG Liquefied Petroleum Gas
NBP National bank of Pakistan
NRL NATIONAL Refinery Limited
PSO Pakistan State Oil
SAP System Application Program
TNOD Training and organization development
VIS Vehicle Identification System
WAPDA Water and power regulator development authority
WEF World Economic Forum
4
WOPP White Oil Pipeline Project
TABLE OF CONTENT
5
Chapter no
Topic Description Page no
11112
Introduction amp History of PSO Introduction (Pakistan State Oil) History
221
22
INTRODUCTION TO MANAGEMENT amp ORGANIZATION How Manager job is changing
Technology Increasing threats to security Increase Competitiveness
Rewards and challenges of a manager
33132333435
36
ORGANIZATION CULTURE amp THE ENVIRONMENT CONSTRAINTS Manager Views Strong or Weak Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
44142
DECISION MAKING DECISION MAKING PROCESS INTUTION
551
FOUNDATION OF PLANNING Formal and Informal Purpose of planning How do manager plans Financial vs strategic objectives Types of plan
6
6 ORGANIZING Work specialization Span of control Centralization amp Decentralization Departmentalization Chain of command Mechanistic or Organic
7 LEADING
LEADERSHIP THEORY Managerial grid Path goal Model Formalization Visionary Leadership Span of control Gender difference Developing trust Developing Trust Expert power Reward power
7
SYNOPSISThis report presents detailed information on
ldquoldquoHow the Management functionsHow the Management functions performs in Pakistan Stateperforms in Pakistan State OilrdquoOilrdquo
The content provides an introduction history and how manager job is changing and tells significance of using latest technology in an organization
Pakistan State Oil (PSO) despite carrying a label of a public sector entity and truly the drivers of economy of this country PSO is continuously improving his product and services and improving the quality of the product
Government of Pakistan holds its 51 share PSO is a Pakistanrsquos largest company having an average turnover of around US billions of $ annually
These are solo distributor in the southern region and further it occupy greater market share PSO has maintained a 30-year mutually-beneficial business relationship with Kuwait Petroleum Corporation (KPC) for the purchase of HSD and FO and also export its product to Afghanistan
PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent Previous year PSO was ranked at 31st
ldquoPSO shall undertake social philanthropic or community development programs which are in alliance with its business strategies or that which will benefit the broader interests of the communityrdquo
We are proud to cater to the fuel and non fuel needs of approximately 28 million customers per day The report concludes on ldquoSWOT ANALYSIS of PSO ldquo and some useful suggestion also addedrdquo
Finally
OOil is the il is the life bloodlife blood for a country for a country
asas
PSO is the PSO is the hh earear t of economyt of economy
SWOT analysis
Conclusion Recommendation
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
ACKNOWLEDGEMENT
Fore mostly I thank Almighty ALLAH who rewarded me with the ability to think work and deliver what I
assigned to do
I would like to thanks the following peoples for their cooperation amp helpful comments to make this report
MrBABAR WAHAB (Course Mentor) Assistant Professor (MAJU)
Mr Sayed Tamiz Uddin Manager (Public relation) Pakistan State Oil
I would also like to thank my parents for their unconditional love and concern that resides me throughout my
educational levels
Once again I would like to thank my course mentor of ldquoPrinciples of Managementrdquo and Manager ndashPR
(Pakistan State Oil) who assists me time to time to make quality report I would like to pay him (both) a note
of thanks
2
LETTER OF TRANSMITTAL
To
Mr Babar WahabCourse MentorManagement
Sir
As this report is concerned with the Management I have gathered all the
information through website and meeting with the Public Relation manager of
(PSO) I make my total efforts to fulfill the requirements regarding this project
In this report main focus is on ldquohow Management functions performs in an
organizationrdquo And I tried my best to handle the entire management process
under your guidance
I am thankful to you that you give me an opportunity to make this report under
practical scenario
Yours truly
SYED REHAN ALI SP-09-MB-0159
3
Acronyms
CNG Compresses Natural Gas
DEO Diesel Engine Oil
EDR Employee development report
ERP Enterprise Resource Planning
GMIC General Manager Industrial Consumer
HBL Habib Bank Limited
IPP Independent power plants
KESC Karachi electric supply cooperation
KPC Kuwait Petroleum Corporation
KSE Karachi Stock Exchange
LPG Liquefied Petroleum Gas
NBP National bank of Pakistan
NRL NATIONAL Refinery Limited
PSO Pakistan State Oil
SAP System Application Program
TNOD Training and organization development
VIS Vehicle Identification System
WAPDA Water and power regulator development authority
WEF World Economic Forum
4
WOPP White Oil Pipeline Project
TABLE OF CONTENT
5
Chapter no
Topic Description Page no
11112
Introduction amp History of PSO Introduction (Pakistan State Oil) History
221
22
INTRODUCTION TO MANAGEMENT amp ORGANIZATION How Manager job is changing
Technology Increasing threats to security Increase Competitiveness
Rewards and challenges of a manager
33132333435
36
ORGANIZATION CULTURE amp THE ENVIRONMENT CONSTRAINTS Manager Views Strong or Weak Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
44142
DECISION MAKING DECISION MAKING PROCESS INTUTION
551
FOUNDATION OF PLANNING Formal and Informal Purpose of planning How do manager plans Financial vs strategic objectives Types of plan
6
6 ORGANIZING Work specialization Span of control Centralization amp Decentralization Departmentalization Chain of command Mechanistic or Organic
7 LEADING
LEADERSHIP THEORY Managerial grid Path goal Model Formalization Visionary Leadership Span of control Gender difference Developing trust Developing Trust Expert power Reward power
7
SYNOPSISThis report presents detailed information on
ldquoldquoHow the Management functionsHow the Management functions performs in Pakistan Stateperforms in Pakistan State OilrdquoOilrdquo
The content provides an introduction history and how manager job is changing and tells significance of using latest technology in an organization
Pakistan State Oil (PSO) despite carrying a label of a public sector entity and truly the drivers of economy of this country PSO is continuously improving his product and services and improving the quality of the product
Government of Pakistan holds its 51 share PSO is a Pakistanrsquos largest company having an average turnover of around US billions of $ annually
These are solo distributor in the southern region and further it occupy greater market share PSO has maintained a 30-year mutually-beneficial business relationship with Kuwait Petroleum Corporation (KPC) for the purchase of HSD and FO and also export its product to Afghanistan
PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent Previous year PSO was ranked at 31st
ldquoPSO shall undertake social philanthropic or community development programs which are in alliance with its business strategies or that which will benefit the broader interests of the communityrdquo
We are proud to cater to the fuel and non fuel needs of approximately 28 million customers per day The report concludes on ldquoSWOT ANALYSIS of PSO ldquo and some useful suggestion also addedrdquo
Finally
OOil is the il is the life bloodlife blood for a country for a country
asas
PSO is the PSO is the hh earear t of economyt of economy
SWOT analysis
Conclusion Recommendation
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
LETTER OF TRANSMITTAL
To
Mr Babar WahabCourse MentorManagement
Sir
As this report is concerned with the Management I have gathered all the
information through website and meeting with the Public Relation manager of
(PSO) I make my total efforts to fulfill the requirements regarding this project
In this report main focus is on ldquohow Management functions performs in an
organizationrdquo And I tried my best to handle the entire management process
under your guidance
I am thankful to you that you give me an opportunity to make this report under
practical scenario
Yours truly
SYED REHAN ALI SP-09-MB-0159
3
Acronyms
CNG Compresses Natural Gas
DEO Diesel Engine Oil
EDR Employee development report
ERP Enterprise Resource Planning
GMIC General Manager Industrial Consumer
HBL Habib Bank Limited
IPP Independent power plants
KESC Karachi electric supply cooperation
KPC Kuwait Petroleum Corporation
KSE Karachi Stock Exchange
LPG Liquefied Petroleum Gas
NBP National bank of Pakistan
NRL NATIONAL Refinery Limited
PSO Pakistan State Oil
SAP System Application Program
TNOD Training and organization development
VIS Vehicle Identification System
WAPDA Water and power regulator development authority
WEF World Economic Forum
4
WOPP White Oil Pipeline Project
TABLE OF CONTENT
5
Chapter no
Topic Description Page no
11112
Introduction amp History of PSO Introduction (Pakistan State Oil) History
221
22
INTRODUCTION TO MANAGEMENT amp ORGANIZATION How Manager job is changing
Technology Increasing threats to security Increase Competitiveness
Rewards and challenges of a manager
33132333435
36
ORGANIZATION CULTURE amp THE ENVIRONMENT CONSTRAINTS Manager Views Strong or Weak Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
44142
DECISION MAKING DECISION MAKING PROCESS INTUTION
551
FOUNDATION OF PLANNING Formal and Informal Purpose of planning How do manager plans Financial vs strategic objectives Types of plan
6
6 ORGANIZING Work specialization Span of control Centralization amp Decentralization Departmentalization Chain of command Mechanistic or Organic
7 LEADING
LEADERSHIP THEORY Managerial grid Path goal Model Formalization Visionary Leadership Span of control Gender difference Developing trust Developing Trust Expert power Reward power
7
SYNOPSISThis report presents detailed information on
ldquoldquoHow the Management functionsHow the Management functions performs in Pakistan Stateperforms in Pakistan State OilrdquoOilrdquo
The content provides an introduction history and how manager job is changing and tells significance of using latest technology in an organization
Pakistan State Oil (PSO) despite carrying a label of a public sector entity and truly the drivers of economy of this country PSO is continuously improving his product and services and improving the quality of the product
Government of Pakistan holds its 51 share PSO is a Pakistanrsquos largest company having an average turnover of around US billions of $ annually
These are solo distributor in the southern region and further it occupy greater market share PSO has maintained a 30-year mutually-beneficial business relationship with Kuwait Petroleum Corporation (KPC) for the purchase of HSD and FO and also export its product to Afghanistan
PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent Previous year PSO was ranked at 31st
ldquoPSO shall undertake social philanthropic or community development programs which are in alliance with its business strategies or that which will benefit the broader interests of the communityrdquo
We are proud to cater to the fuel and non fuel needs of approximately 28 million customers per day The report concludes on ldquoSWOT ANALYSIS of PSO ldquo and some useful suggestion also addedrdquo
Finally
OOil is the il is the life bloodlife blood for a country for a country
asas
PSO is the PSO is the hh earear t of economyt of economy
SWOT analysis
Conclusion Recommendation
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Acronyms
CNG Compresses Natural Gas
DEO Diesel Engine Oil
EDR Employee development report
ERP Enterprise Resource Planning
GMIC General Manager Industrial Consumer
HBL Habib Bank Limited
IPP Independent power plants
KESC Karachi electric supply cooperation
KPC Kuwait Petroleum Corporation
KSE Karachi Stock Exchange
LPG Liquefied Petroleum Gas
NBP National bank of Pakistan
NRL NATIONAL Refinery Limited
PSO Pakistan State Oil
SAP System Application Program
TNOD Training and organization development
VIS Vehicle Identification System
WAPDA Water and power regulator development authority
WEF World Economic Forum
4
WOPP White Oil Pipeline Project
TABLE OF CONTENT
5
Chapter no
Topic Description Page no
11112
Introduction amp History of PSO Introduction (Pakistan State Oil) History
221
22
INTRODUCTION TO MANAGEMENT amp ORGANIZATION How Manager job is changing
Technology Increasing threats to security Increase Competitiveness
Rewards and challenges of a manager
33132333435
36
ORGANIZATION CULTURE amp THE ENVIRONMENT CONSTRAINTS Manager Views Strong or Weak Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
44142
DECISION MAKING DECISION MAKING PROCESS INTUTION
551
FOUNDATION OF PLANNING Formal and Informal Purpose of planning How do manager plans Financial vs strategic objectives Types of plan
6
6 ORGANIZING Work specialization Span of control Centralization amp Decentralization Departmentalization Chain of command Mechanistic or Organic
7 LEADING
LEADERSHIP THEORY Managerial grid Path goal Model Formalization Visionary Leadership Span of control Gender difference Developing trust Developing Trust Expert power Reward power
7
SYNOPSISThis report presents detailed information on
ldquoldquoHow the Management functionsHow the Management functions performs in Pakistan Stateperforms in Pakistan State OilrdquoOilrdquo
The content provides an introduction history and how manager job is changing and tells significance of using latest technology in an organization
Pakistan State Oil (PSO) despite carrying a label of a public sector entity and truly the drivers of economy of this country PSO is continuously improving his product and services and improving the quality of the product
Government of Pakistan holds its 51 share PSO is a Pakistanrsquos largest company having an average turnover of around US billions of $ annually
These are solo distributor in the southern region and further it occupy greater market share PSO has maintained a 30-year mutually-beneficial business relationship with Kuwait Petroleum Corporation (KPC) for the purchase of HSD and FO and also export its product to Afghanistan
PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent Previous year PSO was ranked at 31st
ldquoPSO shall undertake social philanthropic or community development programs which are in alliance with its business strategies or that which will benefit the broader interests of the communityrdquo
We are proud to cater to the fuel and non fuel needs of approximately 28 million customers per day The report concludes on ldquoSWOT ANALYSIS of PSO ldquo and some useful suggestion also addedrdquo
Finally
OOil is the il is the life bloodlife blood for a country for a country
asas
PSO is the PSO is the hh earear t of economyt of economy
SWOT analysis
Conclusion Recommendation
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
WOPP White Oil Pipeline Project
TABLE OF CONTENT
5
Chapter no
Topic Description Page no
11112
Introduction amp History of PSO Introduction (Pakistan State Oil) History
221
22
INTRODUCTION TO MANAGEMENT amp ORGANIZATION How Manager job is changing
Technology Increasing threats to security Increase Competitiveness
Rewards and challenges of a manager
33132333435
36
ORGANIZATION CULTURE amp THE ENVIRONMENT CONSTRAINTS Manager Views Strong or Weak Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
44142
DECISION MAKING DECISION MAKING PROCESS INTUTION
551
FOUNDATION OF PLANNING Formal and Informal Purpose of planning How do manager plans Financial vs strategic objectives Types of plan
6
6 ORGANIZING Work specialization Span of control Centralization amp Decentralization Departmentalization Chain of command Mechanistic or Organic
7 LEADING
LEADERSHIP THEORY Managerial grid Path goal Model Formalization Visionary Leadership Span of control Gender difference Developing trust Developing Trust Expert power Reward power
7
SYNOPSISThis report presents detailed information on
ldquoldquoHow the Management functionsHow the Management functions performs in Pakistan Stateperforms in Pakistan State OilrdquoOilrdquo
The content provides an introduction history and how manager job is changing and tells significance of using latest technology in an organization
Pakistan State Oil (PSO) despite carrying a label of a public sector entity and truly the drivers of economy of this country PSO is continuously improving his product and services and improving the quality of the product
Government of Pakistan holds its 51 share PSO is a Pakistanrsquos largest company having an average turnover of around US billions of $ annually
These are solo distributor in the southern region and further it occupy greater market share PSO has maintained a 30-year mutually-beneficial business relationship with Kuwait Petroleum Corporation (KPC) for the purchase of HSD and FO and also export its product to Afghanistan
PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent Previous year PSO was ranked at 31st
ldquoPSO shall undertake social philanthropic or community development programs which are in alliance with its business strategies or that which will benefit the broader interests of the communityrdquo
We are proud to cater to the fuel and non fuel needs of approximately 28 million customers per day The report concludes on ldquoSWOT ANALYSIS of PSO ldquo and some useful suggestion also addedrdquo
Finally
OOil is the il is the life bloodlife blood for a country for a country
asas
PSO is the PSO is the hh earear t of economyt of economy
SWOT analysis
Conclusion Recommendation
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Chapter no
Topic Description Page no
11112
Introduction amp History of PSO Introduction (Pakistan State Oil) History
221
22
INTRODUCTION TO MANAGEMENT amp ORGANIZATION How Manager job is changing
Technology Increasing threats to security Increase Competitiveness
Rewards and challenges of a manager
33132333435
36
ORGANIZATION CULTURE amp THE ENVIRONMENT CONSTRAINTS Manager Views Strong or Weak Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
44142
DECISION MAKING DECISION MAKING PROCESS INTUTION
551
FOUNDATION OF PLANNING Formal and Informal Purpose of planning How do manager plans Financial vs strategic objectives Types of plan
6
6 ORGANIZING Work specialization Span of control Centralization amp Decentralization Departmentalization Chain of command Mechanistic or Organic
7 LEADING
LEADERSHIP THEORY Managerial grid Path goal Model Formalization Visionary Leadership Span of control Gender difference Developing trust Developing Trust Expert power Reward power
7
SYNOPSISThis report presents detailed information on
ldquoldquoHow the Management functionsHow the Management functions performs in Pakistan Stateperforms in Pakistan State OilrdquoOilrdquo
The content provides an introduction history and how manager job is changing and tells significance of using latest technology in an organization
Pakistan State Oil (PSO) despite carrying a label of a public sector entity and truly the drivers of economy of this country PSO is continuously improving his product and services and improving the quality of the product
Government of Pakistan holds its 51 share PSO is a Pakistanrsquos largest company having an average turnover of around US billions of $ annually
These are solo distributor in the southern region and further it occupy greater market share PSO has maintained a 30-year mutually-beneficial business relationship with Kuwait Petroleum Corporation (KPC) for the purchase of HSD and FO and also export its product to Afghanistan
PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent Previous year PSO was ranked at 31st
ldquoPSO shall undertake social philanthropic or community development programs which are in alliance with its business strategies or that which will benefit the broader interests of the communityrdquo
We are proud to cater to the fuel and non fuel needs of approximately 28 million customers per day The report concludes on ldquoSWOT ANALYSIS of PSO ldquo and some useful suggestion also addedrdquo
Finally
OOil is the il is the life bloodlife blood for a country for a country
asas
PSO is the PSO is the hh earear t of economyt of economy
SWOT analysis
Conclusion Recommendation
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
6 ORGANIZING Work specialization Span of control Centralization amp Decentralization Departmentalization Chain of command Mechanistic or Organic
7 LEADING
LEADERSHIP THEORY Managerial grid Path goal Model Formalization Visionary Leadership Span of control Gender difference Developing trust Developing Trust Expert power Reward power
7
SYNOPSISThis report presents detailed information on
ldquoldquoHow the Management functionsHow the Management functions performs in Pakistan Stateperforms in Pakistan State OilrdquoOilrdquo
The content provides an introduction history and how manager job is changing and tells significance of using latest technology in an organization
Pakistan State Oil (PSO) despite carrying a label of a public sector entity and truly the drivers of economy of this country PSO is continuously improving his product and services and improving the quality of the product
Government of Pakistan holds its 51 share PSO is a Pakistanrsquos largest company having an average turnover of around US billions of $ annually
These are solo distributor in the southern region and further it occupy greater market share PSO has maintained a 30-year mutually-beneficial business relationship with Kuwait Petroleum Corporation (KPC) for the purchase of HSD and FO and also export its product to Afghanistan
PSO ranked 29th whose revenue as compared previous year was seen surged by 41 percent Previous year PSO was ranked at 31st
ldquoPSO shall undertake social philanthropic or community development programs which are in alliance with its business strategies or that which will benefit the broader interests of the communityrdquo
We are proud to cater to the fuel and non fuel needs of approximately 28 million customers per day The report concludes on ldquoSWOT ANALYSIS of PSO ldquo and some useful suggestion also addedrdquo
Finally
OOil is the il is the life bloodlife blood for a country for a country
asas
PSO is the PSO is the hh earear t of economyt of economy
SWOT analysis
Conclusion Recommendation
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
8
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
(1-1)C OMPANY OVERVIEW
Market Leader in Energy sectorPakistan state oil is the market leader in Pakistanrsquos energy sector The company has the largest network of retail outlets to serve the automotive sector and is the major fuel supplier to aviation railways power projects armed forces and agriculture sector PSO takes pride in continuing the tradition of excellence and is fully committed to meet the energy needs of today and rising challenges of tomorrow Pakistan State Oil the largest oil marketing company in the country is currently engaged in storage distribution and marketing of various POL products
CURRENT VALUE the Companyrsquos current value of Rs 75 billion
MARKET SHARE
9
INTRODUCTIONamp
HISTORY
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
MARKET SHARE in Black oil 821 MARKET SHARE in white oil 612 The companyrsquos astounding growth in terms of sales and turnover combined with its status of being the
First Pakistani Public Sector Company to become a member of the World Economic Forum (WEF)
Winning the ldquoKarachi Stock Exchange Top Companies Awardrdquo has made PSO a notable company world over
PSO has the widest strategic oil distribution network This network comprises of 29 storage depots and 9 installations 860000 MTs of capacity ie almost 81 of total national storage numerous pipe lines network and equity partnership in White Oil Pipeline Project (WOPP) from Karachi to Mehmood Kot
A most efficient product movement system for its POL products facilitates the operations at PSO This system includes a fleet of 6000 tank lorries tank wagons and pipelines With the inception of white oil pipeline (WOPP) the pattern of supplies from Karachi has changed drastically as the entire white oil movement from Karachi has been switched over from tank lorries to pipelines
Moreover to make this system more efficient and effective new pilfer-proof tank lorries equipped with satellite tracking system have been introduced
Distribution outlets 3612 1 PSO has the largest network in the country Out of these 1610 outlets have been upgraded as per the New Vision Retail Program with most modern facilities like
electronic dispensing units convenience stores business centers Easy Payment Centers and customer friendly staff to provide unmatched and diverse services to its customers all of which are comparable to international practices
The fact that PSO serves 28 million retail customers on daily basis along with 2000 industrial units and business houses is indicative of its vast customer base The company has also been meeting the fuel needs of various government entities armed forces railways agriculture sector IPPs and industrial units
PSO also provides Jet Fuel to Refueling Facilities at 9 airports in Pakistan and ship fuel at 3 ports
In July 2002 lsquoPSO Loyalty Cardsrsquo were introduced to reward the retail customers for their loyalty and patronage towards the company In February 2003 PSO launched its lsquoFleet Cardsrsquo and lsquoCorporate Cardsrsquo which are fuel-based credit cards for the business entities These cards along with the companyrsquos Prepaid Cards provide convenience flexibility and security to customers while enabling them to earn redeemable loyalty points and avail attractive discounts on non-petroleum products
POL productsPSO products include
Motor Gasoline High Speed Diesel Furnace Oil Jet Fuel
1(1-1) httpwwwpsopkcomabout_us
10
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Kerosene LPG CNG Petrochemicals Lubricants
PSOrsquos leading retail brands includes
Premier-XL (petrol with multi-functional additive) Green-XL (environment friendly diesel with an additive that provides more mileage
smooth running amp less black smoke) Deo (diesel engine oil) and Carient (passenger car motor oil)
In order to deliver the promised quality to its retail customers PSO launched Mobile Quality Testing Networks (MQTU) in October 1998 which has now been extended to 21 units operating from 15 major cities of Pakistan These units perform surprise visits to check the quality of the POL products at different retail outlets2
3
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments
(1-2) H ISTORY The creation of Pakistan State Oil (PSO) can be traced back to the year 1974 when on January 1st the government took over and merged Pakistan National Oil (PNO) and Dawood Petroleum Limited (DPL) as Premiere Oil Company Limited (POCL)
Soon after that on 3rd June 1974 Petroleum Storage Development Corporation (PSDC) came into existence PSDC was then renamed as State Oil Company Limited (SOCL) on August 23rd 1976 Following that the ESSO undertakings were purchased on 15th September 1976 and control was vested in SOCL
The end of that year (30th December 1976) saw the merger of the Premier Oil Company Limited and State Oil Company Limited giving way to Pakistan state Oil (PSO)
After PSOrsquos inception the corporate culture underwent a comprehensive renewal program which was fully implemented in 2004 This program over the years included the revamping of the organizational architecture rationalization of staff employee empowerment and transparency in decision making through cross functional teams
This new corporate renewal program has divided the companyrsquos major operations into independent activities supported by legal financial informative and other services In order to reinforce and monitor this structural change related check and balances have been established by incorporating monitoring and control systems
Human Resource Development became one of the main priorities on the companyrsquos agenda under this corporate reform
2httpwwwpsopkcomabout_usbusiness_glancephp
3
11
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies that PSO has been able to maintain its market leadership in a highly competitive business environment
4
January 1 1974
The federal government took over the management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited) renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control Act 1974)
June 6 1974
The government incorporates ldquoPetroleum Storage Development Corporationrsquo PSDC
August 23 1976
PSCDC renamed to State Oil Company Limited (SOCL) 5
September 15 1976
4(1-2) httpwwwpsopkcomabout_ushistoryphp
5
12
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
The Government purchases ESSO undertakings vests their control in SOCL
December 30 1976
The Government merges PNO and POCL into SOCL (State Oil Company Limited) and renames it Pakistan State Oil Company Limited (PSO)
1999
13
The new vision program is launched
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
(2-1) HOW MANAGER JOB IS CHANGING
CHANGE IMAPACT
Technology
In a global scenario Technology plays a vital role in an organizationPhillips Kotler quotes
ldquo If company not use technologies they are out of the business and only those companies compete in the market that adopts technological changesrdquo
Pakistan state oil uses latest technologies like SAP amp ERP LOTUS
Advantages of using technology is To save time Increase efficiency and productivity
The company shall reinforce technology-driven value-added initiatives and shall work towards increasing income from non-fuel and gaseous fuel businesses
Increase threats to security
All over the country threats is increasingBiggest threats to Pakistan state oil is (Pakistan State Oil Head Office Building) costing Billions of rupeesIn a current scenario
Tank Lorries holds in Afghanistan In strikes tankers damages
Increase
Competitiveness
In a current period competition is increasing very rapidlyEleven or twelve companies are in oil operationTill 1994-95 only two companies were in operation
PSO SHELL
At that time there is no issue of Quality amp Quantity
YEAR PROFIT MARGIN PSO 1994-95 7 PaisaL
PSO 2009 35
In 1994-95 there is no issue of quality amp quantity but todayQuality amp quantity has become significant for both companies and customers
14
How manager is changing
Rewards
Quality Management
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
(2-2) REWARDSPakistan state oil gives rewards to their employees on the following performance basis
OUTSTANINGEXCELLENT
PERFORMANCE
AVERAGEPERFORMAN
CE
ABOVE AVERAGE
PERFORMANCE
MARGINALPERFORMAN
CE
BELOWPERFORMAN
CE
Increment
Basic
15
4
10
2
12
3
NO
-
5
-
PROMOTIONPromotion based on EDR (Employees Development Report)
REAL EXAMPLE
On OUTSTANDING PERFORMANCE
15
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
On outstanding performance MrTamiz uddin (To whom that I am making report)
Awarded as Outstanding performance as a Divisional Manager in the year 2002-03
He got following rewards
Shield Certificate amp Recognition letter Cash award amp Umrah ticket
And also got Laptops and digital camera
6
6(2-2) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
1 Quality Management
Quality is a factor that no one can ignore it longer
Pakistan state oil is known as offering utmost quality products and highest performance ever PSO is continuously improving his product and services and improving the quality of the product
PSO being fully committed to implement total quality management approach has achieved ISO 9000 certification for its six terminals while the balance storage would be made ISO compliant in the next couple of years
The modes used for product movement of POL products by PSO include tank Lorries tank wagons and pipeline We have a fleet of around 6000 tank Lorries Around 1200 tank Lorries equipped with tracking and pilfer proof system have been upgraded as per international standards which are engaged in delivering quality fuels across the country
With the inception of white oil pipeline (WOPP) from Karachi to Mehmood Kot via Shikarpur amp MFM (Mehmood Kot Faisalabad Machikey) pipeline the pattern of supplies from Karachi have been drastically changed as the entire white oil movement from Karachi has been switched over from tank lorries to pipeline To cater to the local lubricants requirements Free Lube Delivery Vans have been introduced
16
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
1 httpwwwpsopkcomsuppliers 1
17
Manager Views Strong or Week Culture Dimension of organization culture How Employee learn culture Environment
Internal environment External Environment
Organization stakeholder
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
(3-1) Managerial view of management
(3-2)Pakistan State Oil and Strong Culture
(3-3)18
Symbolic OmnipotentTop level management set targets While Middle level make planning to achieve the targets through Lower level staffIf the goal is achieve --------------- well enough
If the goal is not achieve If the target not meets the management see it as a whole and search for a reason If the reason donrsquot justify then management takes steps towards that employees
PSO believe in sharing the key values of employees
Co-ordination meeting between ManagersMD and their subordinates Schedule on Bi-monthly basis and meeting is mandatory on quarterly basis
In a meeting employees and the management cross questioning to each others and raise the issues and make solutions Thatrsquos motivating the subordinate
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Dimension of Organization Culture
PSO mainly emphasize on
Stability amp Aggressiveness
Innovation and risk taking
Attention Detail7
Stability amp Aggressiveness
Employee RecognitionTo boost the morale of employees a reward and recognition scheme is in place for the last few years and has been a great source of creating a spirit of healthy competition amongst employees Each year employees are nominated for two company-wide ceremonies viz
Shaukat Raza Mirza Management Excellence Awardrsquo PSO Managing Directorrsquos Performance Awardrsquo
Employees within the organization are aggressive to each other in order to achieve the targetsReason PSO has policy that on performance basis employee can exceed each other
ABOVE 25
AVERAGE 50
BELOW 25
25 employees declare as Above performance50 employees declare as Average performance 25 employees declare as Below performance
Example quotedldquoIf there are 04 EINSTEIN in an organization those above rules also applyrdquo
Innovation amp Risk technology
PSO encourage their employees to share creative and innovative ideas
PSO-Innovation
Vehicle Identification System (VIS) is an innovative system introduced for the first time in this
region by PSO at participating outlets which enables refueling in a vehicle without cash credit card or voucher It is an advance Fleet Management Solution for your organization which guarantees fueling in the authorized vehicles only
7(3-1 3-2 3-3) Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
Innovation and Risk taking
19
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Benefits Fueling of authorized fleet vehicles onlySubstantial SavingsAutomatic Odometer Reading
8
How employees learn cultureWhen employee is hired then Human Resource report to TNOD (Training and Organizational Development) Where the organization conduct a orientation plan In this orientation plan employee meets with their all heads boss and with the passage of time employees learn culture itself PSO has Open amp Candid communication culture
ENVIRONMENT
INTERNAL EXTERNAL Specific General
8 Further detail description can be seen on httppsopkcomproducts_servicesvisphp
httpwwwpakistaneconomistcompagesearchSearch-Engine2002SE53asp
INTERNAL
Culture
Culture shows basic values amp behaviors of a societyWith the passage of time culture of an organization also changesExample1520 years back female are restricted to specific fields onlyBut today women are competing male side by side in every department
Employee
Employees are the backbone of an organization and without employees no organization can achieve their goalsThatrsquos why companies provide training to their new as well as experienced employees to increase the organization efficiency time to time
We value people of PSO as our greatest Resource
Union
Non management union exists in PSOUnion election held after 03 years then revise terms and conditionIRE department control all the issues of union under the supervision of DGM DGM co-ordinate time to time with the union
20
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
The company has strengthened its internal controls specifically in supply chain area by implementing computerized load acknowledgement system which is aimed at preventing misappropriation of products in transit and ensures prompt delivery of products to customers and depots To ensure proper supplies to local retail outlets fleet management plan has been implemented at Karachi Lahore and Islamabad which would be extended gradually to other major cities of the country
SPECIFIC ENVIRONMENT
Customer PSO gives his customer a high valuerdquoBroad customer base including the retail and industrial as well asaviation marine and GovernmentArmed Forces sectors
Major customers are KESC WAPDA DEFENCE PAKISTAN STEEL MILL IPPrsquos Armed forces Railway etc
PSO being a customer friendly company passed on the benefit to this lower cost savings to the consumers
SupplierPSO export its product to Afghanistan onlyPSO purchase their product to
Pak-Kuwait Pak Arab Attock refinery limited Pak refinery limited NRL PARCO PARCO
Competitor 11-12 companies are working in the oil amp petroleum industryout of which PSO is the leading company and other two major competitors are
SHELL CALTEX
PSO has maximum no of outlets in urban as well as rural areas
Market share PSO Market share in 2007 686 PSO Market share in 2008 706
Pressure group
Govt of Pakistan holds 51 share of PSO So they influence on the organization decision and make pressure to the top level of the organization
ExamplePolitical partiesGovt ministers use their resources to contract with the PSO transportation to use their lorries and trucks
But PSO has two policies and if they fulfill any one of the two then they PSO contract with them at their own reservation
21
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Economiccondition
In a current recession scenario economic condition of a country is directly influence to the PSOHow
Prices high PSO takes Over draft Pay high Mark-up Low Receivable (specially from Govt sector organization)
Politicallegal Political and legal environment influence on the organization (Reason may be that Govt of Pakistan holds 51 share)and the try to get their influence on the decision making process
Social cultural
We believe that excellence in our core activities emerges from a passion for satisfying our customers needs in terms of total quality management Our foremost goal is to retain our corporate leadership
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Demographic
Demographic environment is vital and organization is mainly interested in the population and growth of the size because people (customer) are the one who makes company profitableThe reason is that human population according to size location density age occupation etc
Demographic threat may be there due to the rapidly growing population It needs also increases at a rapid rate that generate a threat of not fulfilling these needs
TechnologicalA technological change is a way for InnovationOne of the most important tasks accomplished during the initial period of transformation was to inculcate the significance of information technology amongst the employees
1048708 ERP solution SAP implemented at all locations
Implemented SAP to streamline the information systems for obtaining and sharing up-to-date real time information on sales operation and logistics and establishing common data warehouse across the supply chain
The latest launch of PSO Loyalty Card has been the most innovative marketing initiative which has not only enabled the customer to earn PSO Loyalty Points redeemable throughout the country but has also offered them attractive discounts for purchases at a large number of merchant outlets
22
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
ORGANIZATION STAKEHOLDERS
23
Major organization stakeholders are
GOVT OF PAKISTAN 51
HBL (Habib Bank Limited)
INVESTEMNET CORPORATION OF PAKISTAN
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
D ecision M aking P rocess
D ECISION M AKING P ROCESS
Problem
Identification of a Problem
Area manager of PSO check the sales volume of a petrol pump and found that their regular customer EDHI is not purchasing to the PSO Although PSO was also offering to them a special discount over the last few years
SOLUTION
24
PSO lost their regular customer (EDHI)
CHARACTERS in a Real situation`
Mrtamiz uddin Area incharge Mr Kazmi In charge of EDHIMr faisal Edhi ADMINISTRATOR (owner)MR XYZ
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Area Incharge of the PSO (MrTamiz uddin) call to the Mr Kazmi (EDHI incharge) and said that he wanted to meet him
Mr Kazmi( EDHI incharge) Initially refuses the agreed
Then they both meet in the office of EDHI
Area Incharge of the PSO (MrTamiz uddin) he courteously starts his message and asks him to tell the reason that you have stopped to purchase our product
Mr Kazmi( EDHI incharge) said according to our representative
Other company (SHELL) is providing better quality than you
There is difference of measure of quantity too
Our ambulances engine is cease because of poor quality of fuel
Area Incharge of the PSO (MrTamiz uddin) Mr Kazmi if you have any complaint then you should tell us Ok If you are not purchasing then doesnrsquot matter but i wanted to meet your representative to prove that whatever he is saying is true or fake 9
Mr Kazmi call the representative
Area Incharge of the PSO (MrTamiz uddin) When representative see the Area incharge of PSO in the office of Mr Kazmi he shocked because he knows himPSO area incharge asked him that what you know about quality of the fuel
Representative He stated the same reason as early describedhellip
Area Incharge of the PSO (MrTamiz uddin)
Area Incharge of the PSO (MrTamiz uddin) check test the sample Area incharge takes sample of 03 different oil companies and the results are PSO 210 (210 Shows ---- Excellent quality)SHELL 209 CALTEX 208
He proved that the PSO quality is the best among all
Mr Kazmi (EDHI incharge) When he enforced to his representative he admit that he has done this thing only for the sake of getting commission from another company pump
After that Mr Kazmi was promise to the area incharge of PSO that he will take action against him and he will request to the Mr Faisal Edhi (the administrator of the EDHI) to be a client of Pakistan state oil
9Interview with the Public Relation Manager (PSO) Contact no (9221)9207628 Ext 2061 Sayedtameezuddinpsopkcom
(0300)9201184
25
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
I ntuitive D ecision m aking
Affect initiated decision PSO not take decision on the basis of feeling and emotions Otherwise that can cause a adverse affect on the company image and good will
Cognitive based decision PSO take decision on the basis of skills knowledge and perfection that will lead an organization
Experienced based decisionPSO also take decision on the basis of Past experiences It helps an organization to take better decision The advantage of taking decision is not to repeat a mistake that happened in past
Values or ethics based decision PSO not take decision on the basis of values or ethics
Subconscious mental processing PSO sometime take decision on the basis of subconscious mental processingEXAMPLEIn Supply department sometime decision takes on the basis of subconsciously mental processing like Whether we will purchase inventory from XYZ
26
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
party or not
PLANNING
27
Planning Formal amp Informal Purpose Of Planning How do Manager Plans Types of Plan
Internal environment External Environment
Organization stakeholder
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
PlanningIt can be formal or Informal
(1) FORMAL PLANNING
Formal planning use in
BUDGETING
FORECASTING
FINANCING
SALES PLANNING ( in Retail department)
MARKET PLAN
INDUSTRIAL CONSUMER DEPARTMNET
LOGISTIC DEPARTMENT (from 1 depot to another)
SETTING STRATEGIES
(2) IN FORMAL PLANNING
Except formal (periodic) planning all the Planning is called INFORMAL PLANNING
EXAMPLE
Petrol Pump XYZ daily takes 3000 Litre fuel from PSO tankers on daily basis(SCHEDULE BASIS)
If the all fuel sold out then they contract to the PSO They will immediately access the production to the pump
(Above example is of Informal planning Because they daily take 3000L petrol and that specific day their sales rapidly growth and they need extra fuel to met their customers need )
PURPOSE OF PLANNING28
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Purpose of planning is
To achieve organization goals
To organize employees and resources effectively
To meet future deadline efficiently
To prevent from any risk or uncertainty in the future
HOW DO MANAGER PLANS
In every department of an organization manager plans according to their mindsetOrganization (Top level Management) just wants results
Sales manager keep in mind the last year sales record of _____ quarter And in current year he set his targets (10-15) extra And to achieve these targets heshe works
Example (A S S U M P T I O N )
YEAR QUARTER 1(SALES)
(In Million Rs)
QUARTER 2(SALES)
(in Million Rs)
200830
625(including 1st quarter sales)
2009 330(10 more than last year quarter)
7185(15 more than last year quarter)
Financial objectives
Strategic objectives
Increase revenue Increase profit margin High ROI
Kept high market share High quality products Finest customer service
29
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Stonger Credit rating Use latest technologies Provide training to the fresh
employee as well as experienced
10
TYPES OF PLANS
BREADTHTIME
FRAME SPECIFICITY FREQUENCY OF USE
STRATEGICIt defines the broad goal for the organizationThe strategic goals of the company along with the strategic plans are decided by the Board of directorsHowever they are reviewed every year in the meetingIn a X-COM (executive committee) meeting tp level management of PSO discusses the issues and policies
MISSIONWe are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers based on
Professionally trained high quality motivated workforce working as a team in an environment which recognizes and rewards performance innovation and creativity and provides for personal growth
LONGTERM
Pakistan State Oil
Long Term Planning
Durationis
Five(05)
Years
DIRECTIONAL
Departmental meeting held In which Area managers discuss problems and changes
Example
Sugar cane season is going to start
So company makes policies to provide more Lubricant and diesel to that particular area to meet the demand
They make directional planning that at this time that particular area need in that amount hellip they estimate all
SINGLE
Example
In Brand management the planning is Single use
When PSO launch Additive Diesel helliphelliphelliphellip helliphellip hellip The planning use is called single planning
Company make marketing research that how many companies are using that raw material or `or etc
10 Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
30
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
and developmentLowest cost operations and assured access to long-term and cost effective supply sources Sustained growth in earnings in real terms Highly ethical safe environment friendly and socially responsible business practices 11
TACTICAL
These goals together with the
plans to achieve them again are
devised by the top management
of the company on an annual
basis To ensure that these
objectives are achieved Mainly
through marketing is the job of
the director of each division
Focusing on customer demand
MEDIUM
Pakistan State Oil
Medium Planning
isin
between(01)to
(05)
Years
OPERATIONALAt an operational level daily distribution planning andProduction scheduling occurOperational decisions are the agreement with the suppliers taking orders form customersWhich customer takes to which suppliers when he needed what amount he needed then order of next delivery
SHORT TERM
Pakistan State Oil
Short term
Planning
Duration is
within
a
Year
SPECIFIC
Specific plan in an organization are clearly stated
Example
If a divisional manager has given the task to the area manager to achieve XYZ target then area manager must define the procedure and policies to its subordinates
STANDINGongoing training program to equip its workforce withnecessary skills and knowledge 10000 training inputs have been imparted to our employees since 2000 despite their being busy In addition more than 10000 forecourt attendants have been trained on customer services as part of WOW experience launchedWOW plan Providing finest customer service to their customers and receive a sudden feedback (WOW)
11 httpwwwpsopkcomabout_usvision_mission_valuesphp
31
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Organizing
32
Work specialization
Authority and Responsibility
Chain of command
Span of control
Centralization amp Decentralization
________ Departmentalization
Mechanistic or Organic
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
WORK SPECIALISATIONThe work specialization is high with each manager leader responsible for a specific work and monitors his subordinatersquos performance on regular basis
We are now training our employees to solve customers complaints to their satisfaction and not ours
AUTHORITY AND RESPONSIBILITYPSO has given authority as well as responsibilities to the manager that they can take a decision to achieve their target Then they report to their leader whenever they are part of a team and to their respective departmental director as well The mentors have a lot of authority responsibility and information relative to the task on which they are working However all the information and authority relative to the organization as a whole particularly the financial aspects is confidential and even the consultants are not aware of it
Chain of commandChain of command in an organization is clearly defined
Which employee report to which boss How much time he will take to finish the task
Span of controlSpan of control vary form department to department level normally 10-15 employees work under 1 boss)
C entralization amp D ecentralization Centralization decision making In a centralization decision making NO employees participation involvesIt happened at the following level
Top level basis executive committee management committee While settlement of strategies Developing plan
De centralization decision making In a decentralization decision making employees also participates and openly gives their ideas It happened at following level
33
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Divisional offices Field related planning Field pump ( if problem arise the operational department solve)
Cross Functional Teams Encourage team work amp group dynamics while inculcating a sense of ownership through
empowered Cross Functional Teams (CFTs)
Employ Business Process Reengineering (BPR) to maintain an international working environment by streamlining processes and removing unnecessary layers
Interactive sessions are regularly held by the Managing Director at all levels because clear coherent and consistent messages ensure that employees are able to integrate the inputs into their thinking
Setting up of Cross-Functional Teams (CFTs) to promote team work and timely action
Quick and merit based decisions taken by respective cross functional teams have yielded important successes in terms of volumes and profit Cost savings have occurred due to strict vigilance and proper negotiations in supply and purchases Similarly distribution systems and logistics have also been improved to a great extent and financial transactions as stated earlier show a remarkable change Similarly security and HSE have also seen a turn around
34
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Geographical Departmentalization
EDCS
GM Retail GMIC
DGM(South)
DGM (Central)
DGM (North)
Divisional Manager
(04)
Deputy Business Managers
Divisional Managers
(06)
Divisional Managers
(04)
DGMIC FEUL
DGMIC LUBRICANT
Area Incharge
Deputy Business Managers
(07)
Deputy Business Manager
(07)
Area Incharge(05)
Area Incharge(05)
35
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
12
13
Functional Departmentalization
12 Area in charge minimum (4) and maximum depend upon the size of the area (GM managers renamed as Business Managers)Source Interview
13
MD amp CEOED-CS
GM ConstructionGM (retail)GM (Rc)
GM AviationGM Operations
GM SupplyGM Logistics
GM Training amp Organizational Development
GM Lubricants and ChemicalsGM Gaseous
GM Brand managementGM Legal
GM HR
CI Auditor
DGM Security
DGM procurement
ED - FINANCE amp IT
GM Finance
GM IT
36
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
M echanistic or O rganic organization Pakistan state oil is mechanistic as well as organic organization By analyzing the organization seems to me more organic than mechanistic
Decision making centralized (on major issues) as well as decentralized Clear chain of command to the employees Cross functional teams are also working Span of control vary (department to department) Division of labors Company rules and policies are strict
Strategy Mix Matrix
Introduction of Matrix Management System with shared support functionsThis is based on the Strategy Mix Matrix (GSM) which PSO has adopted We emphasize quick decision making in our style of management we strengthen teamwork promoted through formation of various cross functional teams to expedite decision-making and execution of policies
In a clear departure from the bureaucratic style of management employee empowerment has been enhanced through delegation of authority and employee participation has been ensured through open invitation of suggestions
Old PSODistribution orientedLarge and centralizedGovernment controlOperational basedDiffused responsibilityTechnical orientationRisk averseHierarchic andBureaucratic setupReliance on managerial authorityPetroleum sale only
Transformed PSOCustomer service OrientedLean and decentralizedManagerial autonomyStrategic visionOwnership and accountabilityCommercial orientationEntrepreneurial attitudesTask driven organizationTeamwork and delegation of responsibilityBroader business base
37
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
14
LEADING
14
38
LEADERSHIP THEORY
Span of control
Gender difference
Cross cultural leadership
Developing Trust
Expert power
Reward power
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Leadership skills enhancement of trained workforce takes place through challenging assignments
empowerment promoting employees within the organization wherever possible and concentrating on Fast-Track employees to fill higher vacancies
Our employees who are willing to maximize their contributions are identified for career development The young and experienced professionals who can bring a significant change are given assignments that encompass a great deal of responsibility and autonomy
Team work promoted through formation of various Cross Functional Teams to expedite development and prompt decision making Employees empowerment thru delegation of authority Employee participation through open invitation of suggestions Accountability at all levels Swift flow of information thru bulletin boards circulars and emails
LEADERSHIP STYLE
Democratic style
The leadership style used in all the departments of PSO is democratic due to the participation of
employees
MANAGERIAL GRID
The management style is 99 scale Because the directors are highly concerned with both the task
activities and the respect
Formalization Formalization is low
Path-goal Model
In PSO leader or manager assist his or her subordinates to accomplishes the task on continuous basis
Visionary Leadership
PSO has a THINK TANK that always pursue to formulate the innovative ways to make their organization
at zenith
Reward power
39
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
PSO gives rewards and fringe benefits to their employee on achieving targetsReward may be
Increment Bonus salary Holidays Gift items Tickets etc
Developing TrustThrough concerted efforts we have been able to develop and inculcate among employees the values of
integrity health safety and environmental concerns customer satisfaction quality and productivity
leadership and teamwork candid and open communication innovation and creativity diversity respect
for the individual and employee growth and development
The Training amp Organizational Development department pursued a strict policy for change in attitude of employees quite vigorously by inculcating a sense of participation openness integrity and keeping in focus the companyrsquos vision and values in all training activities A pace was set therefore to bring change in all aspects of the organization and its systems
Excellence We believe that excellence in our core activities emerges from a passion for satisfying our customersrsquo needs in terms of total quality management Our foremost goal is to retain our corporate leadership
Cohesiveness We endeavor to achieve higher collective and individual goals through team This is inculcated in the organization through effective communication Respect We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country We value contribution of individuals and teams Individual contributions are recognized through our reward and recognition program
Integrity We uphold our values and Business Ethics principles in every action and decision Professional and personal honesty dedication and commitment are the landmarks of our success Open and transparent business practices are based on ethical values and respect for employees communities and the environment
Gender differencePSO donrsquot believe in gender difference Male and Female staff are simultaneously working at the same and different position Female staffs are working in HR Marketing Secretary and Receptionist and other areas with the male
ldquoldquoWe give an equal opportunity to employeesrdquoWe give an equal opportunity to employeesrdquo
40
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
CONTROLLING
Market Control
41
Market control Yardstick to measure employee performance Managerial decision in the control process Industrial rating Types of control balanced scorecard Benchmarking Workplace concern
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Pakistan State Oil Company Limited (PSO) is Pakistanrsquos largest company having an average turnover of around US billions of $ annually Therefore the company can be easily ranked some where between 400-450 in a typical Fortune 500 list of US Companies
PSO YARDISTICK TO MEASURE EMPLOYEE PERFORMANCE
A- What he accomplishes Consider result of employees work and that of his subordinate
Quality of work
Quantity of work
Profit objectives
Developing people
Commitment to company vision mission values and corporate objectives
B- How he works Planning
Working with others
Delegating
Problem solving skill and use of modern techniques
Organizing
Communicating
Analysis
Health safety environment
Ethics
C- What he is Consider the degree to which employees personnel qualities contribute to his effectiveness
Dependability
Judgment
Leadership
Drive
Initiative15
D- What he knows What he knows regarding his functional related field and his understanding of environmental matters necessary to performance
Assigned work
Related work
Company philosophy and objectives
Development in profession or field
SUMMARY OF POINTS IN (A-D)
15Source Interview with the Public Relation Manager (PSO)Contact no (9221)9207628 Ext 2061 (0300)9201184 Sayedtameezuddinpsopkcom
42
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
54 3 2 1 Average
A
B
C
D
This is the proper way through which employee performance is measure in PSO
BENCHMARKPakistan state oil benchmark is to get
Market share Profit
Internal BenchmarkingOn the basis of past experience company set their standard
BALANCE SORECARDEmployee development report is just like a balance scorecard for the higher management on the basis of which they decided that whether employee deserve to promote or tends to be in the same category
PACRA ASSIGNS RATINGS TO PAKISTAN STATE OIL COMPANY LIMITED The Pakistan Credit Rating Agency (PACRA) has downgraded the long-term entity rating of Pakistan State Oil Company Limited (PSO) to AA+ (double A plus) while maintaining the short-term rating at A1+ (A One Plus) These ratings indicate a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments The ratings reflect the companyrsquos leadership wwwpacracom
FINANCIAL CONTROL
FINANCIAL RATIOS
43
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Types of controlControlling is a reflection of planning and controlling in an organization is mandatory It ensure that either the company is going in the right direction or not
FEED FORWARD CONTROLCompany use feed forward control Obviously company anticipates the problem and issues
Managerial decision in the control process
FINANCIAL RATIOS 2008 2007
Return on Shareholders Equity ()
454 224
Earning per share(Rs Bn)
8194 273
Dividend per share(Rs Bn)
235 210
Market value per share(Rs Bn)
41724 3915
Debtor turnover ratio 246 325
Net profit ratio 24 114
44
Objectives and standard set
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
S WOT A NALYSIS Strengths
1 Market Leader in Oil2 Superior Quality Products3 Superior Customer Services4 Customers Loyalty5 Competent Human Resources6 Innovation Skill7 Socially Responsible
45
Measure actual performance versus standard performance
Goal achieved Goal not achieved
Search reasoning
If reason satisfy If reason not satisfy
Then take decision against thatthose
employees
then revise standard
Well an good
Example S A L E S North South
Quarter 1 (2008) 180 M 190 MQuarter 1 (2009) 200 m 210M
If Business sales manager of North has set a target to achieve the sales of 200 million in a quarter year At the end of the quarter they achieved the sales of 180 M Then they can balance or shift it to the other region (if the sale of that territory is rapidly growing)
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
8 Government Backed Entity9 Educate graduates through Quality Internship programs
Weaknesses1 Inequitable Compensation Package2 Employees Turnover3 Ineffective in Lubricant Market4 Fail to identify the reason of fall in Market Share
Opportunities1 Growth in Purchasing Power2 Growth in Vehicles Production3 Growth in Population4 Government Support5 Increase in Prices6 Increase in Demand
Threats 1 Competition
2 Substitute Products 3 Inflation4 High Cost5 Interest Rates6 OPEC Policies
RECOMMENDATION SUGGESTIONS
After analyzing the financial ratio and this report I would like to give some recommendation
PSO must organize events that will educate the people regarding consumption of a fuel
PSO must look for extend its business organization globally (to open its branches in Afghanistan and other neighbors countries
Provides Environment safety programs at school and university levels46
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-
Must promote our Sports industry continuously
Must search for the substitute of oil and gas
47
- MrBABAR WAHAB (Course Mentor)
- Assistant Professor (MAJU)
-