Pakistan State Oil Short Overview Posted on January 6, 2011 by syedanousheen Organizational Structure:is an idea in the field of organizational studies and management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has been defined as “the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.
ORGANIZATIONAL CULTURE IN PSO: (Example) ORGANIZATION CULTURE: Organization culture is a system of shared meaning within an organization that determines in large degree how employees act. IMPORTANCE OF CULTURE IN PSO According to the opinion of the PSO’s sales officer PSO is a sales oriented company. Strong culture is a symbol of more profit more earning and sense of responsibility. It is also a monument of well-disciplined enterprises in which every organ of that organization is well concerned with the ultimate objective of the organization.
As it’s a fundamental truth that every individual from worker to Top manager is aware of his rights privileges responsibilities and outcome of efforts being invested. SIX DIMENSIONS OF CULTURE Innovation and risk taking: According to our survey what we have found is that employees are not much encouraged to be innovative and take risks. Attention to detail : According to our survey employees have given importance. Outcome Orientation: The manager’s focuses on both results or outcomes and the techniques needed to achieve those outcomes.
People Orientation :Management decisions do not take into consideration the effect of outcomes on people within the organization. They have made their employees a central part of their culture. Teamorientation: They emphasize on team orientation i. e. work activities are organized around them. Stability: PSO is maintaining the status in contrast to growth. PLANNING AT PSO Planning: a process that involves defining the organization objectives or goals and developing an overall strategy for achieving those goals and developing a complete ierarchy of plans to integrate and coordinate activities. CORPORATE PLANNING PSO is striving to add value to its business by introducing modern efficient and innovative business practices to boost corporate performance. Benefits of this value will be given to shareholders and the employees of the company. Corporate planning is about competitive advantage; at this most challenging juncture in PSO’s history the focus is on forward thinking of on cutting edge issues.
Staffed with professionals having a diverse background in business engineering and computer technology and international experience CP is endeavoring to prepare PSO for the challenges ahead to ensure its sustainable corporate leadership in future based on the best industrial practices. The development of a financial model that resulted in the company’s first in depth study on product wise and business wise profitability as well as the establishment of an effective procedural framework for capital budgeting mark the first year of the corporate planning activity in PSO.
This has led to classification of authority and criterion for investment decisions efficient project appraisal based on computer modeling and effective monitoring of the status results of investments undertaken. These systems have been adopted by the company for periodic review of corporate performance through management committee meetings. CONTINGENCY FACTORS IN PLANNING LEVEL ON ORGANIZATION Outstanding performance of company was recorded by the board of management and noted by the secretary petroleum during his recent visit. It was because employees worked hard delivered efforts and produced results.
During the last six months unnecessary expenses had been curtailed to a great extent; operations improved depot losses cut down and cartage fleet upgraded. ORANIZATIONAL STRUCTURE & DESIGN The organizations formal framework by job tasks is divided in groups but is coordinated. The basis on which jobs are grouped in order to accomplish organizational goals is functional departmentalization. BRAND MANAGEMENT AND COMMUNICATION DEPARTMENT Branding is the reputation and the image of a company, which is conveyed via names logos, acts packaging and word of mouth.
Corporate branding used to focus on logo and name but today it has a broader meaning. The need for branding arises when consumers expect more than a good product at a fair price. They seek service experiences that compliment their life styles and brands that align with their personal aspirations. And that’s exactly what company try to convey to target market. VM&C department at PSO follows the following two approaches: Expanding the depth and breath of brand awareness by improving brand recognition of consumers during purchase or consumption settings.
Improving the strength favor ability and uniqueness of brand associations making up the brand image. The above goals are achieved primarily through: u Corporate Advertising u Sales Promotion Campaign u Sponsorships CUSTOMER SERVICE DEPARTMENT PSO has recently set up a dedicated service department that is major step towards company’s overall objective of becoming a customer-oriented company. Located at the company’s head office in Karachi the CSD is the first point of contact for the customers on day to day concerns and provides centralized customer service across Pakistan
Trained and professional staff attends to and solves the customers concerns and complaints quickly and effectively PUBLIC AFFAIRS/PUBLIC RELATIONS DEPARTMENT (PRD) The major function of the PRD is to ensure the projection of the company’s image as the country’s premier public sector organization and conscientious citizens. This is achieved by highlighting positive stories about the company in the media. Other functions of the department include event media management speech writing and keeping Managing Director and the company hierarchy informed.
The department also tackles press queries and sets up interviews of the Managing Director with the media. It also coordinates with the brand management and other departments in the planning of events press conferences workshops seminars etc. The department is also involved in giving banners and tackling adds requests not related to advertisements campaign. The department personnel are also involved in the preparation of the annual report and writing of articles. CHAIN OF COMMAND It is an unbroken line of authority that extends from the upper levels of the organization to the lowest levels and defines who reports to whom.
As PSO follows traditional objective setting decision are made totally by the top management. The authority is given to the managers to give orders and employees are bound to follow them. It is the responsibility of the employees to perform those duties assigned to them. UNITY OF COMMAND On PSO the unity of command hoes in the following sequence: · C h a i r ma n · Managing Director · 7 General Managers Divisional managers · 1 sale Executive · 8-12 Sales officers Managing Director is answerable to the Chairman. MD has 7 general managers working under him. Every G. M has 8 DMs working under him.
Every DM has a Sales executive and under him there are 8-12 sales officers. CENTRALIZATION PSO is a highly centralized company i. e. decision-making is concentrated in the upper levels of the organization. The Top management makes the company’s key decisions with little or no input from the lower level employees. PSO is more centralized because the environment is stable company is large and lower level managers are not as capable or experienced at making decisions as upper level managers. MECHANISTIC ORGANIZATION PSO is a mechanistic organization with a highly controlled structure. In the mechanistic tructure work specialization creates jobs that are simple routine and standardized. Extensive departmentalization increases impersonality and the need for multiple layers of management to coordinate these specialized departments. There is also a strict adherence to the unity of command principle. As the distance between the top and the bottom of the organization is wide, top managers tend to impose rules and regulations to control the employees’ behavior. DECISION MAKING Decision-making is an important aspect of the company, which needs to be thoroughly evaluated before making a final and firm decision.
The working of organization depends upon top management; so good and firm decision in the organization will have a direct impact on the working environment of such organizations. The manager is responsible for taking the decision of effected matter keeping in view the after effects. The decisions must be in interests of the organization DECISION-MAKING STYLES ANALYTICAL STYLE: (LONG RUN) As PSO is sales oriented company and it has many competitors like Shell, Caltex etc. So they have to consider more alternatives after making a decision.
The managers in this condition have the ability to cope with unique situation. DIRECTIVE STYLE In short run, the decision making are more in directive style i. e. managers made fast and logical decisions. The manager is the focal point in the organization and he is appropriate authority to a problem arise by his observation or reflected by someone else from the organization. TRAINING TYPES AT PSO In order to main the sustainability of the workforce following many types of trainings are conducted. New Technology and methods Personal Skills Development Organizational Development Emergency Training
Environment and Safety Trainings One- and two-day open enrollment workshops Certification Programs Project Related Training Cross Functional Training CONCLUSION AND RECOMMENDATIONS Pakistan state oil (PSO) is the largest company of Pakistan not only in the field of oil marketing but also otherwise. It has been included in Asia’s top 1000 companies and thus is surely a pride for Pakistan. Although up till now it is Govt owned but it is about to be privatized in a month or so. As expected after privatization the company would be further more prosperous and generative in terms of revenues.
PSO certainly has a competitive advantage over all it’s competitors because of the vast network of it’s outlets all over Pakistan but at the same time a great deal of responsibility is required by them as they are not only an oil marketing company but they have some responsibilities towards the people of Pakistan. Take an example of a PSO outlet in Chitral, while deciding to undertake this project or not the feasibility report rejects the idea of building it but being a Pakistani socially responsible company if even one public transport bus goes there then they have to build a petrol station over their.
PSO has been very innovative and successful since it realized the competition has actually started after SHELL came and acquired the market share from PSO. But after coming up with all those “new vision” outlets, PSO has proved to be never far behind. Marketing strategies starting from “Gold card” to………………….. “PSO LOYALTY CARD” has been amazingly good and can be rated as first class strategies. A major problem faced by PSO is the misconception in people’s mind that the oil used by shell is imported and of better quality, as shell is a foreign company in Pakistan.
Although the sources are same but still shell is also aware of this fact and is exploiting it. PSO should do something about it like printing brochures that could explain people about the only sources available in Pakistan, emphasizing upon the fact that no oil is coming to Pakistan from any direct abroad sources. Caltex basically has some control over the market because of the lubes it sells and the profit margin on lubes is much higher than on petrol. But as PSO and CASTROL have come together to make the right combination of “Top two together” they can overcome this problem as well.
PSO has done very well in the financial sector, since its new vision period and will continue with the pace. Innovations and up to dating of the outlets in accordance with the needs of the changing world is a very important step towards both marketing and financial prosperity. The other problem faced by PSO because of the competition is that the land acquiring at old or new places the bid gets too high that the land acquired becomes too expensive. u PSO is becoming better day-by-day and after privatization the modifications and changes they are expected to bring u “Sky is the limit”.
ORGANIZATIONAL CHART OF PAKISTAN STATE OIL COMPANY Board of director Manager Director MD’S Secretariat Internal Audit Purification and transmission Distribution division Engineering service division Commercial division Management service division Finance and material division Human resources Sales Planning and development Purification Karachi Account Budget Treasury Billing Consumer services Transmission Sindh(Exl karachi) Construction Comparison Baloc Histan Services Administrative services Privatization Legal Services Information technology Safety healthy & environment Procurement and inventory management
External Relations Measurement and meter manufacturing SWOT (Strength, Weakness. Opportunities, Threats) A situation (SWOT) analysis is critical to the creation of any strategic plan. The SWOT analysis begins with a scan of the external environment. Organization must examine their situation in order to seek opportunities and monitor threats. Sources on information include customers (internal or external), supplier, government (local, state, international) professional or trade association (convention and exhibition), journal and reports (scientific, professional and trade).
SWOT is the assumption and facts on which a plan will be based. Analyzed strengths and weaknesses comprise the internal assessment of the organization. Assess the strengths of the organization. What makes the organization distinctive? How efficient is our manufacturing? How skilled is our workforce? What is our market share? What financing is available? Do we have a superior reputation? Assess the weakness of the organization. What are te vulnerable areas of the organization that could be explored/ Are our facilities outdated? Is research and development adequate? Are our technologies obsolete? What does the competition do well?
Analyzing opportunities and threats comprises the external assessment of the environment. Identify opportunities. In which area is the competition not meeting customer needs? What are the possible new markets? What is the strength of the economy? What is the strength of the economy? Are our rivals weak? Identify threats. In which area does the competition meet customer needs more effectively? Are there new competitors? Is there a shortage of resources? Are market tastes changing? What are the new regulations? What substitute products exist? The best strategy is one that fits the organization’s strengths to opportunities in the environment.
The SWOT analysis is used as a baseline for the future improvement, as well as gap analysis. Comprising the organization to external benchmarks (the best practices) is used to assess current capabilities. Benchmarking systematically compares measures such as efficiency or outcome of an organization against similar measure from other internal or external organization. This analysis helps uncover best practices that can bee adopted for improvement. (See camp, R. C> Benchmarking: The search for industry best practices that lead to superior performance.
Norcross, GA: Industrial engineering and management press 1993) Benchmaking with other organization can help identify a gap. Gap analysis identifies the progress required to move the organization can help identify a current capabilities to its desired future state. In this way, the organization can adapt the best practices to improve organizational performance. Strengths 1. Market Share of 70% is one the main strength of PSO. 2. Company reputation in the industrial sectors adds the strengths for PSO. 3. Product quality is also strength especially in industrial sector. 4.
Service quality like plastic cards and non-fuel activities adds the value. 5. Distribution & Fleet network, which covers 81% country retail network, is the key edge on PSO its competitors. 6. Promotional activities add value in brand awareness and attraction of new customers. 7. Innovation like Auto Car Wash helps PSO to differentiate with its main competitors. 8. Storage capacity, which holds 80% of total storage capacity of the country, is also key advantage over its competitors. 9. Technical skills in Fleet management are strength for PSO. 10. Visionary, capable leadership adds value to PSO strength like their NVRO operations. 1. Financial Stability with strong reserves, paid-up capital adds the trust of stakeholders. 12. Product line width adds long range of products for more revenue opportunities. 13. Castrol brand affiliation with PSO adds strength in terms of brand awareness. 14. Relations with Government one of the key strength of PSO in order to get legal protections. Weaknesses 1. Lost & Dissatisfied customers are major weakness of PSO as they are causing the perception of inefficient PSO. 2. Old retail outlets are major weakness for PSO as they are not enough capable to compete the Shell, Caltex or Total outlets. . Untrained staff at outlets is causing inefficient services. 4. Quality assurance is not so effective to build the image of “Quality & Quantity”. Opportunities 1. Afghanistan’s Market is the biggest opportunity for OMCs in Pakistan. 2. De-regularities of Oil industry in Pakistan add the opportunity to fill the deficiency in few sectors of petrochemicals markets. 3. Export Opportunities of Black Oil Products is also adding the opportunities by exporting Black Oil products, which is facing downfall due to the introduction Gas Oil. 4.
Industrial & Trade growth in Pakistan is also the opportunity for PSO as they are adding revenues in Power sector that is the major customer of PSO. Threats 1. Risk of forward integration of Supplier is the key threat for PSO and other OMCs in Pakistan. As the example, the PARCO who is one of the main POL product suppliers to OMCs adopt the forward integration strategy by introducing its own OMC with its new business alliance TOTAL and named its OMC as TOTAL- PARCO. 2. Risk of Diversification in technology is also a key threat for PSO as due to new technology used in industrial sector is causing decline in particular POL products. . Substitutes in Black Oil Market are causing a solid reason for the declining trend in Black Oil Products, which is major threat for PSO. Overview: At this organization culture there are six dimension are defined above one of the dimension is Innovation and risk taking is very important one therefore in this terminology we can define Organic part and decentralization Decisions are significant when using open communication but there is Low-formalization as compare to Mechanistic and centralization approach.
To Conclude this short report I want to suggest that randomly both structure i-e Organic and Mechanistic is use in Pso Company but somehow the rules and policies are stable cannot be change but when it comes up with huge amount of data or Loss or may be Profit then Innovative ideas use and it’s like taking risks. | We 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 and development| | ||Lowest 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|| | |
