In 2003, Hindustan Petroleum Corporation Ltd. (HPCL), was faced with the immediate necessity of changing its external operation process. Thus, it developed a better innovative approach in its internal communication. This study introduces HPCL's model of employee communication which seeks to improve communication among employees as well as cope up with the trending competition in the market. HPCL's model included several workshops where employees of the company come up and shared organizational visions. This case also dwelt on the importance of digital technology in fostering better communication among employees and positive interaction between leaders and employees.
Boris Groysberg, Michael Slind
Harvard Business School (411077-PDF-ENG)
Apr 5, 2011 (Revised July 2014.)
Case questions answered:
Case study questions answered in the first solution:
- How did Hindustan Petroleum Corporation Ltd. go about building and reaching a vision to be a world-class company? What actions and practices are the most important?
- How did employees respond to change and communication efforts? Why did they react as they did?
- What is HPCL’s approach to employee communication?
- What human resource practices support HPCL’s business model?
- In your experience, what kinds of practices exemplify effective organizational communication? What causes communication to break down, or to fail?
- Which attributes or behaviors distinguish leaders who communicate well?
Case study questions answered in the second solution:
- What is HPCL approach to employee communication?
- What is a constitutive view of communication? What kind of practices exemplifies a constitutive view of communication at HPCL?
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Case answers for Hindustan Petroleum Corporation Ltd.: Driving Change Through Internal Communication
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1. How did Hindustan Petroleum Corporation Ltd. (HPCL) go about building and reaching a vision to be a world-class company? What actions and practices are the most important?
Hindustan Petroleum Corporation Ltd. (HPCL) decided to take the appropriate steps towards transforming their organization due to changes in the Indian oil industry.
Following its inception in 1974 as a combined effort between ESSO of India and Lube India, the company formerly owned by the government had 49% of its stock sold to private investors in 1995. After decades of a public sector mentality, HPCL now needed to behave as a privately-owned institution in order to compete.
A formal structure, which had previously limited competition by the petroleum companies in the region, was suddenly changed, and this altered environment drove the leaders of HPCL to focus their efforts on the modifications needed to succeed.
While most organizations would have been more attentive to the external pressures created by this new situation, Hindustan Petroleum Corporation Ltd. decided to “turn inward […] [and make] a concerted a concerted effort to close the gap between themselves and their employees.” (Groysberg & Slind 1).
Through the implementation of new strategies, HPCL began to take the necessary steps towards building and reaching a vision that would affect the organization from the ground up.
One of the most important practices during this transition was the development of “vision workshops.” These vision workshops focused on incorporating employees in a collective effort to restructure the strategy and culture of the company.
In a process that lasted over half a decade and involved several thousand employees, the workshops primarily focused on establishing where the company was headed and determining the appropriate ways to reach the goals stated communally.
The usual workshop lasted three days, involved about 20 participants, and was led by a workshop coach who fomented participation to determine the vision each participant had of the company.
“Employees, many of them accustomed to taking orders from others, were now able to offer their own opinions and insights on the current state and future course of the company.” (Groysberg & Slind 3).
The most important attribute of this exercise was establishing an internal communication with the employees; a communication largely rooted in personal aspirations and goals which could be translated into the success of the company as a whole.
By creating a sense of trust, these workshops motivated each employee, no matter their position, into aligning themselves with a vision for the company that best met their individual standards for success and self-realization.
On one particular occasion, following an exercise where employees and top-management were both asked to write five-bullet mission statements, HPCL executives noticed a discrepancy between the statements generated by both parties:
The most telling point was when our union leaders said, “We want our company to be global.” And they were surprised that the top management did not include the word ‘global’ in their vision statement. These people made a better vision than the top management people! There were other recurring patterns. People at large wanted the vision to be more broad-based: “Instead of being a ‘petroleum company’, we should think of ourselves as an ‘energy company.'” That kind of attitude was so powerful. People started feeling, “This is my vision.” And changes in the vision did come about because people wanted these things. (Groysberg & Slind 4).
Instead of taking the usual route of one-way communication handed down by top management, Hindustan Petroleum Corporation Ltd. incorporated employees at every level into the task of building their vision.
By taking the time to listen to their employees, the leaders at HPCL were able to both motivate employees and create a feeling of collective effort towards the future.
Following the success of the vision workshops, HPCL focused on implementing the vision in a way that best fits their new approach. By designating 20 teams of young employees and sending them into the various markets the company took part in, the organization was able to both reach their customer base and provide a sense of personal motivation for each worker who, during the course of achieving their tasks, began to feel a duty towards helping the people in each community.
With the help of these teams, Hindustan Petroleum Corporation Ltd. was able to receive specific input from bottom-level employees that could help them be more competitive. A modernization initiative began due to the information provided, which included an overhaul of the look of HPCL’s roadside gas stations that improved visibility and retail presence.
Another important consequence from these teams were the “Hamara Pumps”; a new set of outlets made specifically for rural areas which were cheaper to operate and helped target customers − mostly farmers and villagers − buy fuel closer to home.
As can clearly be demonstrated by the results, the sense of purpose and importance that the employees felt led to innovative results that reinforced the amount of work being put in on a day-to-day basis.
In April 2009, Hindustan Petroleum Corporation Ltd. solidified their effort into striving towards…