PRESENTED TO:

Sir Basit Afzal

PRESENTED BY:
SAMINA KAUSAR
ZENOBIA JAVAID
TANZEEL ALI

SUBMISSION DATE:
15TH MAY 2019

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 TABLE OF CONTENTS

1. Background of the Organization………………………………………..4

2. Culture of the Organization before Change…………………………..12

3. Need for Change…………………………………………….12

4. SWOT Analysis………………………………………………13

5. Strategy Adopted For Change…………………………….......15

6. Plan and Implementation……………………………………...17

7. Resistance to Change…………………………………………24

8. Whether Change Imbedded In Culture Or Not?.........................25

9. Significantly older employees still resist to change……………27

10. Effectiveness of Strategy…………………………………...…29

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BACKGROUND OF THE ORGANIZATION:

The creation of Pakistan State Oil (PSO) can be traced back to the year 1974, when the govt. of
Pakistan amalgamated three “oil marketing companies”;
 ESSO EASTERN,
 PAKISTAN NATIONAL OIL &
 DAWOOD PETROLUM

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 PSO’s 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 company’s 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 company’s agenda
under this corporate form.

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.

COMPANY PROFILE:

4
PSO is the market leader in Pakistan’s 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. The company has largest retail network in
the country and the most extensive terminal and depot network.
PSO was recognized among the top business enterprises of the Muslim world with its 29th
ranking in the“5th Annual Dinar Standard List of Top 100 Companies”.

Since its inception in 1976, the company has been meeting more than 80% of country’s fuel
needs.supported by well-established infrastructure built at par with international standards,
comprising around 877,000 million tons storage facilities representing almost 81% of the total

Storage capacity in the country. PSO has an edge over its competitors in terms of economies
of scale and cost effective operations.
PSO has always been considered as a blue chip company with market capitalization of around
Rs. 50 billion (USD 860 million). The company is the winner of “Karachi Stock Exchange
Top Companies Award” and a member of World Economic Forum.

PSO also enjoys around 36% market participation in lubricants with its own brand name Castrol.
The company contribute 80% share in imports of oil products in the country.

5
The PSO’s retail coverage of over 3612 outlets which representing 80% participation in
total industry network.

This network is supported by PSO’s 28 storage facilities with a capacity of more than 800,000
tons. PSO took a major step in improving its distribution facilities by acquiring 12% equity in
the 800 km long Karachi-Mehmood kot White oil Pipeline.

To ensure the quality of the products being sold to customers,

16 mobile quality-testing units have been deployed in all major cities to carry on-the-spot
checks for quality and quantity.

Alongside its retail business, PSO also caters to the fuel demand of the industrial consumers that
includes power generation, railways, sugar, textile and steel mills, etc. The company has also
been meeting the fuel needs of defense of the nation and maintains on time supplies to
armed forces.

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VISION, MISSION AND VALUES:

VISION:

To excel in delivering value to customers as an innovative and dynamic energy

company that gets to the future first.

The question is missing in the vision statement that is “What we want to Become ? ”

Recommended Vision:
“PSO vision is to be the world leader in POL products and related services.”

MISSION:

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

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They were lacking four major components of the mission statement. They are customers,
product and services, markets, self concept. The question is missing “What is our
Business?”

Recommended Mission Statement:

“PSO’s mission is to be the most successful POL Company in the world, at delivering the
best customer experience in the markets we serve. In doing so, PSO will meet customer
expectations of highest quality; leading technology; competitive pricing; individual and
company accountability; best-in-class service and support; flexible customization
capability; superior corporate citizenship; financial stability and standards which guide
genuine sense of responsibility to our employees.”

VALUES:

Excellence:
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.
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.

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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.

Innovation:
We are committed to continuous improvement, both in New Product and Processes as well as
those existing already. We encourage Creative Ideas from all stakeholders.

Corporate Responsibility:
We promote Health, Safety and Environment culture both internally and externally. We
Emphasize on Community Development and aspire to make society a better place to live in.

Industry Profile

There are four main OMCs in Pakistan that includes PSO, Shell, Caltex and Total. PSO is the
market leader by holding overall 71.3% of market share and with 22% share Shell Pakistan hold
second position.

Others
Market Share
6.7%

Shell
22%

PSO
71.3%

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 ORGANIZATIONAL CHART OF PSO

CEO/ MDs

MANAGING
DIRECTOR

MD’S INTERNAL AUDIT

SECRETARIAT

GM- GM- GM- GM- GM- GM-

PURIFICA DISTRIBU ENGINEE COMME MANA FINANCE
TION AND TION RING GEME AND
RCIAL
TRANSMISS SERVICE NT MATERIA
DIVISION DIVISIO SERVI L
ION
DIVISION N CE DIVISION
DIVISION
DIVISI
ON

DM- DM- DM- DM-

DM- KARACHI PLANN DM- HUMAN ACCOUN
PURIFIC -ING & SALES RESOUR TS
A- CE
TION
DEVEL-
OPMEN
T

DM- SALES ADMIN

TRANSMI- SINDH CONSTR EXECUT INISTR BUDGET
ATIVE
SSION (EXCL UCTION IVE
SERVI
KARACHI) BILLING CES

DM- CONS PRIVI

COMPRE- SERVIC-ES UMER TIZAT
BALOC TREA
SSION HISTAN SERV ION
SURY
ICE

MEASUREME
NT & METER EXTERN PROCUREM
MANUFACTU ENT &
AL INVENTORY
RING
RELATI MANAGE
ONS MENT

SAFETY,
HEALTH &
ENVIRONME
NT LEGAL
SERVIC
ES

INFORMATION

TECHNOLOGY
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Hierarchy:

On PSO the unity of command hoes in the following sequence:

� Chairman

� 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.

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 CULTURE OF PSO BEFORE CHANGE:

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.

These two groups operated as mafia and were able to manipulate the management most of the
time. The Human Resource Department, though experienced lacked modern professional
Knowledge and tools.

NEED FOR CHANGE:

 PSO, due to the increased marketing activities of its main competitor Shell was
struggling to maintain its market share despite a strong distribution network.
 Caltex also started to project its new “A star is born” image, which further dented
PSO’s market share in the industry.
 In order to counter the marketing activities of the competitors, a need for a complete
revamp of PSO's marketing activities arose, which led to the inception of the New Vision
scheme.
 When PSO was declining, it was realized that a need existed to induct senior
professional marketing experts into the organization.
 As there were only a few professionally sound resources available within the
organization, it was considered necessary to recruit people from the outside.
 Pakistan State Oil was losing its market share and internally it had very ineffective
environment for all level of employees because of that the productivity level of
employees was very low

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  Also it had no sound business model to undertake short or long term business planning
supported by a proper capital budgeting system.
 The old capital budgeting system was antiquated and did not provide any meaningful
information for quality decisions.
 As Pakistan State Oil was losing its market share which was deteriorating its
profitability so the change was inevitable in order to increase the profitability.
 Pakistan State Oil is a customer focused organization but this purpose still seems to be
unachieved
 Last but not least quality of PSOs products was continuously declining whereas Shell
which had emerged as PSOs direct competitor and threatened its existence had already
earned a big name in terms of quality.

SWOT ANALYSIS

Strengths:

1. Market Share of 71.3% is one the main strength of PSO.

2. Company reputation in the industrial sectors adds the strengths for PSO.
3. Product quality is also a 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. Innovation like Auto Car Wash (KARACHI) helps PSO to differentiate with its main
competitors.
7. Storage capacity, which holds 81% of total storage capacity of the country, is also
key advantage over its competitors.
8. Technical skills in Fleet management are strength for PSO.
9. Visionary, capable leadership adds value to PSO strength like their NVRO
operations.

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 10. Financial Stability with strong reserves, paid-up capital adds the trust of
stakeholders.
11. Product line width adds long range of products for more revenue opportunities.
12. Castrol brand affiliation with PSO adds strength in terms of brand awareness.

Weaknesses:

1. Lost & Dissatisfied customers are major weakness of PSO as they are causing the
perception of inefficient PSO.
2. Untrained staff at outlets is causing inefficient services.
3. Quality assurance is not so effective to build the image of “Quality & Quantity”.
4. No recovery of debts
5. Low budget for marketing products and services
6. No professionally sound resources available , HR dept. needs to be improve
7. Less emphasis on lubricants

Opportunities:
.
1. De-regularities of Oil industry in Pakistan add the opportunity to fill the deficiency in
few sectors of petrochemicals markets.
2. PSO can become vertically integrated (centralized)company
3. Export Opportunities of Black Oil Products is also adding the opportunities by
exporting Black Oil products
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.
5. Heavy demand of gasoline in Pakistan
6. PSO and PEPCO signs a fuel supply agreement.

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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 key threats for PSO as due to new
technology used in industrial sector are causing decline in particular POL products.
3. New entrants in the market
4. Availability of Substitutes in Black Oil Market are causing a solid reason for the
declining trend in Black Oil Products, which is major threat for PSO.
6. Low capacity of oil refineries
7. International markets making high costs to PSO

STRATEGY ADOPTED FOR CHANGE :

The change in Pakistan State Oil was implemented by Mr. TARIQ KIRMANI who took charge
as the Managing Director of Pakistan State Oil in October, 2001. MR. KIRMANI however was
not the pioneer of change at PSO, because before him MR. SHAUKAT MIRZA, Managing
director (2000) had already designed and suggested all the change policies.

MR. MIRZA was the man behind the success story of ENGRO Chemicals Pakistan, having
masterminded the conversion of the ESSO Fertilizer into the employees-owned ENGRO
Chemical Pakistan. After MR. MIRZA'S demise in 2001, MR. KIRMANI just implemented
these policies. Therefore, MR. SHAUKAT MIRZA can be proclaimed as the pioneer of the
turnaround strategy of PSO.

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The newly inducted professional management scanned the environment of the organization
and analyzes the factors (internal and external) that had been affecting the organization’s
performance and its business. After the detailed study of the corporation`s past performance,
they came up with suggestions that the following problems have to be resolved for the sake of
corporate productivity.

Major Findings of The Diagnosis

According to the report prepared by the team of professionals who conducted a detailed study of
PSO, the following problems were identified

Internal problems
 The company losing its market share due to decline in products quality and bad
customer service
 Narrow vision
 Out dated system.
 Lack of automation.
 Lack of quality professionals.
 No sound Business vision.
 Bureaucratic management culture.
 Ineffective organizational structure.
 Heavy reliance on inventory gains.

External problems

 Political intervention.
 Aggressive marketing and development by competitors.
 High regulated environment.
 Rapid products substitution in the market.
 New players in the market.

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Sequence for Defining the Market Edge

PLAN AND ITS IMPLEMENTATION

Plan:
Planning and implementation is very invigorative and enthrall .It was a challenge for PSO as
their for most difficult preconceptions and external influences that may or may not arise during
the making and analysis of the development of the strategies to be implemented within the
organization to flourish and fulfill the commitments and pacts that the organization made to the
internal and external customers as well human resources and further more the suppliers which

17
make the oil marketing company viable for making the retails in order to make them count for
the achievements that provide them with the trust of both the customers and the employees .

For such purpose the management of the PSO made use of the experience of proficient
economist LEWSINS. LEWSINS model of change which is composed of the following three
steps was primarily was used by PSO Area;

Unfreezing:
Reducing the forces that are striving to make status quo (zombies)
Moving:
Developing new behaviors values and attitudes (survivor)
Refreezing:
Introducing of new systems and procedures (vital resources)

GUIDING COALITION:

For the purpose of changing the environment of Pakistan State Oil it was recognized by the
upper management that without developing a sound framework of strategic business planning
and capital budgeting etc, no meaningful change would be possible. Mr. KIRMANI inducted a
highly qualified and experienced professional to lead this function. This helped Pakistan State
Oil in designing a new business model which would be underpinned by best management
practices. The business model adapted to revitalize Pakistan State Oil consisted of strategic
analysis, strategy development and strategy implementation. This triangular business
model led to the development of a corporate strategy and various other plans, which
included strategic plan, annual corporate business plan, the new styles of management and
improving the products quality.

The change process by taking the services of highly qualified and experienced professionals by
designing new business models. Pakistan State Oil IMPLEMENTED the change process
including the five main changes which are as follows;
1. Leadership

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2. Social responsibility
3. Employee empowerment and development.
4. Quality of products
5. Restructuring

In this regard, integral to their strategy was defined as the "New Vision Program" that
symbolizes their new outlook towards the future while the "New spirit" guides them to
become even more competitive.
Defined: Long term objectives:

PSO management is going to set the following long-term objectives for the organization. They
emphasis on future directions as an energy solution as well as non fuel retail, the main
objectives are:
 Establishing reputation as an energy company.
 Non fuel retail (NFR) establishment.
 Retain market leadership in all keys products.
 Establishing PSO as a brand of choice for customers.
 Utilization of all available resources.
 Adopting culture of social responsibility.
IMPLEMENTATION:

It was realized some years ago that PSO need some changes at the management level. The
first step was taken by the PSO to recruit some professional market experts from outside the
organization. This was result in the appointment of new Deputy Managing Director
(Marketing). In early 2000 the ministry of petroleum and natural resources took the bold
initiative and restructured PSO`s board of management, they selected the good reputed
professionals. They separated the position of CEO and non-executive chairman of the board. The
board of management is assisted by three sub-committees; the Human resource committee, the
Audit committee, and the finance committee. The main purpose of these committees was to
review both policy and implementation of new initiative.
CHANGE PRCOESS:

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Step by Step--Description of Change:

After a number of iteration and dialogue sessions, the company crafted a new vision, mission
statement and set of values. The new shared vision was to be a perspective on both old endings
and new beginnings at Pakistan State Oil. They are;

MAKING AN EFFECTIVE VISION:

To excel in delivering value to customers as an innovative and dynamic energy company that
gets to the future first.
1. LEADERSHIP:

After the changes in the strategy, MR.KIRMANI introduced new style of leadership which
helped him in achieving his objectives. He was demanding and had a low tolerance for failure to
meet commitment. He was also accessible, decisive, fair, judicious, energetic and willing to
make tough but humane calls.
In his interviews with his staff he used to comment on his way of leadership as:
"I have to be credible in eyes of my people. If I did not walk the talk these people will do a
lot of finger pointing."
At another place:
"Following are the attributes of successful leadership: consistency without exception, giving
and getting respect, model best behavior, and doing and letting others follow. In my view
modeling best behavior is that, I myself swiped my entry card for others to follow.
Similarly, now there are no exclusive elevators for senior teams. We have adopted many
egalitarian practices in our company. There is no exclusive cafeteria for the upper
management anymore, “said KIRMANI proudly.
Under this leadership practice of Pakistan State Oil, managers could have open communication
with the staff. This new style proved very effective in this transition phase. The transition of
Pakistan State Oil had been a top down approach which was later cascaded to have other
employees on board from other levels

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 2. CORPORATE SOCIAL RESPONSIBILITY:

At the heart of this position is their commitment to zero pollution, zero accidents and zero
occupational illness.
In this context:
 It introduced its product by the name of Green XL which does not contain any toxic
material.
 It also created visual parks at different places like one is in Islamabad.

Pakistan State Oil created a lot of awareness about environment by fixing banners along the road
side like: "Your environment is you." or "Keep your environment clean." In this way by
efforts of management Pakistan State Oil proved the slogan of environment friendly
products after the change strategy was implemented.
3. Employee empowerment and development:

There was no strict control and check on employees, they never fulfill their responsibilities and
even most of them not stay full time at offices. The training and organizational development
department started training and development of the employees. They adopted a strict policy
for change in attitude of employees quite intensively by creating a sense of participation,
openness, integrity, and keeping in focus the company`s vision, values and long-term
objectives in all training activities.
In order to keep more strict check and control on employee, they introduce a hand scan system
in offices, which mean it will record the exact time of employees been working. PSO set a pace
in order to bring change in all aspects of the organization and its system. During the
implementation phase, PSO was updated and revised the Human Resource policies. They
adopted a proper performance management system, which was based on bell curve
methodology. PSO not only successfully implemented this new strategy and but employee also
accepted it.
In order to establish productivity and high performance culture, they introduced Proper
reward system; they announce two awards yearly “performance award” and “Excellence

21
award for best performer. They also focus on employee salary and benefit, accordance with
market based pay and benefit structure.
According to PSO general manager “at PSO today, human resource is seen as the single
most important factor that can, and does, bring about change, it is only a fully empowered,
satisfied and motivated professional workforce that guarantees success”. Before the new
reformed strategy, there was no practically implemented policy for the development and training
of employee in the organization. Because of the organization highly centralize and bureaucratic
structure employee was feeling little responsibility.
PSO developed and brought the share value culture among the employee, through collective
efforts, they have been able to develop among employee the value of integrity, health &
safety, environmental concern, customer satisfaction, quality and productivity, leadership
and team work and respect for the individual and employee growth and development.
According to G.M. of PSO, They launched a training program for the employee to develop their
skill, competence and productivity according to fulfill the need of the organization. They had
trained more than 10,000 employees since 2000 and 7000 PSO driver have given Defensive
Deriving Training to carry POL product safely, in addition more than 10000 were trained on
customer service courtesies. The training program consisted of the enhancement of intellectual
skills such as teambuilding, presentation skill, sale and marketing, leadership, computer based
project management, ethics, customer service etc.
4. Quality of products:
According company's profile (Pakistan State Oil) the image of Pakistan State Oil was not so
good in customers mind, its quality was low as compared to its competitors but efforts and
hard work of the Mr. KIRMANI led to creation of quality control vans and testing units
which kept on ensuring the quality control. Pakistan State Oil introduced total quality
management system in its operational activities.

Now Pakistan State Oil has been meeting the country's fuel needs by merging sound business
sense with national obligation. In order to satisfy the customers' needs while ensuring the
highest quality of products and services, consistent conformance to prescribed standards
and specifications across the whole range of activities from receipt, storage, transportation

22
and delivery of products is the cornerstone of Pakistan State Oil's quality management
system.
In addition to quality assurance in upkeep and maintenance of existing facilities, compliance
with quality standards is ensured in construction of new facilities like recently developed state-
of-the-art facilities for Aviation customers at Lahore Airport.

5. Restructuring:
They reduced the unnecessary layers making PSO more lean and flexible. In this regard they
introduce Voluntary Separation Scheme (VSS), due to the confidentiality and sensitivity of
the project, VSS was handled by General Manager Training & organizational development
and the MD to avoided interference from other people in the organization.

The main reason of VSS was to down size the company or to get rid of those who do not fit
in new setup, 30% workforce was reduced i.e. 750 employees opted by VSS (312
management 438 non management). As we can see from the name of the scheme “Voluntary
Separation” it means that they are not putting any kind of pressure on employee to opt or
not.
This scheme was successfully completed and major bunch of employees separated who was
seeing themselves as not fitting in to new culture and organizational structure of PSO.

COMPETENCE AND PRECISION IN DECISION-MAKING:

PSO has adopted Mix Matrix strategy according to GM. They emphasize and want to see not
only quick decision making ability in their management but also transparency in them.

They gave more attention to teamwork, formation of many cross functional team to help decision
making and implementation of new policy. Before the change there was a bureaucratic style
of management and decision making process was not so transparent.

To achieve efficiency and transparency in decision making process, they enhance the
empowerment of employee through commissioning of authority and the participation of

23
employee has been encouraged at all level. This way a bureaucratic and hierarchic setup
was ended and a new task driven organization evolved.

PSO had came from Semi-computerize to a fully computerized organization where SAP
(German software) has been selected to integrate the whole PSO, in order to make sure
that all business decisions are based on accurate and up to date data from more than 50
locations was great achievement for PSO.

RESISTANCE TO CHANGE:

During the change phase, the management had to face many risks and difficulties in its way to
glory. Middle managers were totally opposite to it according to them, the old approach of the
company was based on historical budget lines and box thinking. The attitude of the senior
corporate citizens was that "since we have always done our work like this, we still continue this
way. According to old employees this ATTITUDE betrayed a lack of sensitivity to market and
industry dynamics.

Against this backdrop of organizational depression, any talk of change created negative
vibrations amongst the old guards.
Many of these people would react to any discussion about change saying that "it is the same
old stuff" and nothing was going to happen in the existing situation."

According to Bashar (2001) Kirmani, was aware of that employees were not willing to discuss
their opposition to any new initiative, they would rather resort to anonymous letters against
change proponents than speak up openly against them. False letters were sent to the National
Accountability Bureau and Federal Investigating Agency against the chief executive when he
embarked upon the turnaround strategy.

In our interview with employees of Pakistan State Oil:

"The change brought many employees on the board against Kirmani, even now there is one of
the employees who does not use computer and feel uncomfortable with changing environment
around him."

24
When the existence of the resistance appears it is necessary to examine in terms of how it has
been EXPRESSED. In case of the PSO the resistance is covert which refers to the lack of
support for change is either concealed or undefined.

In this situation KIRMANI handled all these propagandas perfectly; he did not give up but work
more hard to convince the employees by conducting open Communications(seminars). In the
end only 10 % people were left who were not convinced about the company's' change strategy,
but KIRMANI thought that they were convincible.

RESISTANCE QUADRANT

Whether change embedded in culture or not?:

Top-down approach:

25
In the examination of the change process it was very critical and vital to abstract what type of
synchronization did the management used in order to intervene change in the culture of the
organization.
In case Pakistan State Oil, THE TOP DOWN APPROACH was used which created many
difficulties for employees and management as well.
Top-down involves management deciding on the change and then implementing it. The emphasis
is on speed and action. This approach, while apparently faster, often faces discrepancies in
implementation because of resistance from managers and employees resentful of change being
forced on them by their superiors.

CONCEPT OF EQUALITY:
Mangers at Pakistan State Oil told that as a result of change process, the managerial and non-
managerial staff is seated in the same office hall, they are given equality and they started to eat
in the same cafe, sitting in the same office and residing at the same place. Although it is good
to adopt equality principles but the non-managerial staff creates hustle-bustle and lots of
disturbance in the office which creates problem for the managerial staff. Managers have to take
decisions and they require peaceful environment in the office for that but in the presence of
these workers, managers cannot work properly which is a loss to the company.

DISSATISFIED CUSTOMERS AND EMPLOYEES:

Customers at Pakistan State Oil are still discontented with the services provided at Pakistan State
Oil. The revitalization in Pakistan State Oil was done with a purpose of making Pakistan State
Oil is a customer focused organization but this purpose still seems to be unachieved.

Customer’s complaint that the attendants at pumps of Pakistan State Oil are not well-trained
and they do not know how to deal with the customers. They are in haste and try to send customer
away as soon as possible. On the other hand managers at Pakistan State Oil claim that the
attendants are well trained and we properly educate them how to deal with customers.
They first check the meter and then put the fuel. The situation is opposite if we see it with
perspective of customers as well as managers, this shows the inefficiency of change policy.

26
The employees are also not fully satisfied with the intervention process. The salaries at Pakistan
State Oil are not up to that level which competitors like Shell and Caltex are paying because to
cut down the expenditures, Mr. KIRMANI ordered to cut down salaries as well as allowances of
employees at Pakistan State Oil.

High Turnover:
Turnover rate at Pakistan State Oil is high due to lack of facilities provided to the permanent
employees. A senior manager at Pakistan State Oil told that at first employees were given
excellent medical facilities and other allowances and the parents of employees were also
entitled for the medical facilities but now theses facilities have been reduced to cut down
the cost of company similarly we are paid less at Pakistan State Oil as compared to other
competitive organizations that’s why often the young managers find better opportunities and
leave the organization which lead to high cost.
SIGNIFICANTLY OLDER EMPLOYEES STILL RESIST TO CHANGE.
"Change management requires thoughtful planning and sensitive implementation, and
above all, consultation with, and involvement of, the people affected by the changes. Change
must be realistic, achievable and measurable. Before starting organizational change, self
assessment is important: Change needs to be understood and managed in a way that people can
cope effectively with it. Change can be unsettling, so the manager logically needs to be a settling
influence."
During interview with a senior officer at Pakistan State Oil we came to know that young
employees are energetic and motivated towards the organization but the older ones are still
resistant to change .They argue that we like to work on paper rather than using computer and
modern skills.
The managers should use face-to-face communications to handle sensitive aspects of
organizational change. It is important to understand about people's personalities, and how
different people react differently to change. A psychiatric could be hired to take personality tests
of all the employees and calm down those who strictly negated the change. For organizational
change that entails new actions, objectives and processes for a group or team of people,
workshops could be used to achieve understanding, involvement, plans, measurable aims, actions
and commitment because it is the best way of group communication as it is easy in a large

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organization like Pakistan State Oil to communicate in groups rather than personally
comforting the workers one by one

CHANGE MUST INVOLVE THE PEOPLE - CHANGE MUST

NOT BE IMPOSED UPON THE PEOPLE

Only those organizations conduct successful change processes which fully involve all the
employees in change process through proper communication at proper time. Now in case of
Pakistan State Oil the only problem was that the change was imposed upon people, as
Pakistan State Oil had many old middle managers who resisted it. But it was their right to resist
because they were not being involved in the change process. Instead of telling the change
strategy before hand Mr. KIRMANI acted totally opposite to it.

WAYS OF COMMUNICATING CHANGE:

The change strategy of Pakistan State Oil was not properly communicated to all level of
managers and employees. It was just a top down approach which was totally a wrong thing. For
this purpose workshops are very useful processes to develop collective understanding. Staff
surveys are also a helpful way to repair damage and distrust among staff – provided it is allowed
to be filled anonymously with the assurance that proper secrecy will be maintained and provided
you publish and act on the findings.

Management training, empathy and facilitative capability are priority areas -managers are critical
to the change process - they must enable and facilitate, not merely convey and implement policy
from above, which does not work.

You cannot impose change - people and teams need to be empowered to find their own solutions
and responses, with facilitation and support from managers, and tolerance and compassion from
the leaders and executives.

Help employees to make the change:

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It is futile to make the change if the employees are not with you. Employees should also be given
enough time to change. Though in case of Pakistan State Oil the change was quick but the
employees were not given the time to float their ideas and to cope up with change which led to
resistance from employees. Pakistan State Oil should inform at least the employees beforehand
about the turnaround strategy.

EFFECTIVENESS OF STRATEGY
After the change strategy Pakistan State Oil's overall market share rose to 80%. Now it has
highest share in black and white oil which proved very fruitful. This market share shows the
earning of Pakistan State Oil has climbed high as compared to old earnings.
Over all transformation policy was successful According to PSO official website “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”. The summary of the result is following.

 Customer service is improved

 The organization became decentralized from centralization.
 Managers became more autonomous.
 More check on transparency and accountability.
 Task driven organization, stress on team work and share responsibilities.
 Improved brand image, (by improving products quality and by good customer service).
 Introduction of new vision outlets, equipped with all modern facilities e.g. auto car
washing
 More focus on training and development of employee.

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  Market share increase from 65% to 71.3%.
 Profitability increased.

HRM Department at Every Office:

Human resources are a great asset for any company and companies undertake effective measures
to look after their greatest asset. At Pakistan State Oil, the employees are not satisfied with this
thing because they complaint that for every problem related to Human Resource we have to write
to the manager at head office in Karachi. The local administrator evaluates the employees in the
office and report to HR manager at Karachi. This is not an effective strategy. Human Resource
Department should exist in each and every office of the company. It will reduce the problems of
employees and they would be better able to get the solution of their problems.
Motivation for Employees:
Employees at Pakistan State Oil are dissatisfied due to comparatively low salaries. During
interview with the senior officer at Pakistan State Oil we came to know that engineers at Shell
and Caltex are getting starting salary of Rs. 40,000/- but at Pakistan State Oil they get almost Rs.
20,000/- which is a big difference that is why turnover rate is high here. Similarly taxes are
deducted at gross salary due to which take home income is low here. Pakistan State Oil is in the
development phase of its some of the products, so it needs to keep its official expenses low
which are becoming the reasons of demotivation employees.
Walk the talk:
Employees at the PSO are very enthusiastic and hardworking in sense of responsibility. After the
person who was responsible for the major changes in the PSO MIRZA then came KIRMANI
who was dictator and knew only the hard side of the tongue but still he managed to change the
PSO for the better, many names came in the spotlight of the management of the PSO but still
there was an element of WALK THE TALK missing from the management of the PSO. So the
new MD who is the leader of PSO at the moment should walk the talk in order to make the
CHANGE more long lasting and more improvement.

Repeat Seminar:

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In order to make the change work more efficiently and effectively the management should
organize REPEAT SEMINARs, and remind them in order to make them believe in the
effectiveness and efficiency rate of change , in order to permanently imbedded the change in the
culture, in the practices ,

Causal and Effect:

In order to reduce the turn over ration in the PSO .the management should apply the policies
regarding the CAUSAL and EFFECT method by such process of evaluation of the employee
progress. It refers to the positive incentive being to the employees who contribute towards the
achievement of a goal and negative incentive being given to the employees who do not show a
productive attitude meaning that their basic pay will be cut down if their work is not up to the
mark of the Company by this way the employees will work hard in order to be the A class of the
company and the rest will be in B class.

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