Bharat Sanchar Nigam Limited BSNL ion Behaviour

Submitted By:- Group 7 Mandeep Nain (08EM-020)

Shobhit Yadav (08EM-041)

Uday (08EM-049)

Muneeb Rehman (08EM-022)

Sanjeev (08EM-037)

Group Project of OBII

AN OVERVIEW OF STRUCTURAL AND FUNCTIONAL CHANGES UPON FORMATION OF BSNL

Overview Of Structure

Consequent upon liberalization policies of Government of India and changes in the global economy due to globalization process it was decided to separate DOT and DTS as a precursor of corporatization. DOT – Department of Telecom - For policy making. DTS – Department of Telecom Services – For execution of work.

Subsequently the Government has decided to transfer the business of DTS to BHARAT SANCHAR NIGAM LIMITED with effect from 01-10-2000. BSNL has been incorporated as a company with limited liability by shares under Company Act , 1956 with registered office at New Delhi.

Overview Of Structure

Thus BSNL is a fully Government owned company with an assessed capital of nearly 63,000 crores and a capital structure as follows :-

i.500 Crores share at the rate of Rs. 10/- each =5,000 crores (Equity capital)

ii. Receivables and Creditors =1,500 crores iii. Long term debts + Reserves =Balance Amount

BSNL has almost 300000 (Three Lacs ) Nonexecutive Employee & 50,000 Executive Employee.

Government Company GOVERNMENT COMPANY - means any company in which not less than 51 % of the

paid up share capital is held by the Central Government or State Government or partly by Central and State Government. It includes a company subsidiary to the Government Company .BSNL 100% paid up share capital is held by the central government.

Limited Company• It has a separate legal entity.• It has a common seal.• It has a perpetual succession.• The liabilities of the members are limited since most of the companies are

Ltd. Companies. • A Board of Directors manages the Company. • It must have a registered office

BSNL Direction, Design, and Effectiveness Relation with the External Environment, Internal situation &

role oftop management team

CEO, TopManagement

Team

External EnvironmentOpportunities

ThreatsUncertainty

Resource Availability

Internal SituationStrengths

WeaknessesDistinctive Competence

Leadership StylePast Performance

Strategic Direction

Organization Design

Effectiveness Outcomes

Definemission,officialgoals

Selectoperationalgoals,competitivestrategies

ResourcesEfficiencyGoal attainmentCompeting values

Structural Form – learning vs. efficiencyInformation and control systemsProduction technologyHuman resource policies, incentivesOrganizational cultureInterorganizational linkages

Organizational Response to Manage Environmental Uncertainty

Domain Choice; Recruitment; Vertical Integration; Buffering; Smoothening; Advertising; Contracting; Mergers/Acquisitions/Strategic Alliances; Lobbying;

Internal Situational Factors1. WEAKNESSES• Poor marketing strategy • Bureaucratic organizational set up • Inflexibility in mindset (DOT period legacies) • Legacy of poor service image • Huge and aged manpower • Procedural delays • Lack of strategic alliances • Problems associated with incumbency like outdated technologies, unproductive rural

assets, social obligations, political interference, • Poor IT penetration within organization • Poor knowledge Management • Mechanistic structure

Internal Situational Factors

2. Strength

• Experienced telecom service provider • Total telecom service provider • Huge Resources (financial & technical pool) • Huge customer base

Assessing Environmental Uncertainty

Simple

Stable

Complex

Unstable

CHANGE

DOT1. Small number of external

elements, and elements are similar2. Elements remain the same or

change slowly

Conditions for Culture Change: When fundamental change is undergoing in environment & company being always value driven;

Industry is competitive & environment changing quickly;

When org being mediocre or worse;

When company is truly at threshold of becoming a large corporation;

When company is growing rapidly;

When company is young and small;

When there is change in leadership

ORGANISATIONAL CULTURE ASSESSMENT FROM DOT TO BSNL

• Organisational culture in BSNL is under the process of changing from Bureaucratic(DOT) to Corporate.

CAUSES OF BUREAUECRATIC CULTURE IN DOT.

• The organisationa was very controlled and structure place.Formal procedures govern what people do.

• Management style was characterized by the security of employment,stability in relationship.

• Organisation followed formal rules,and policy .

• Organisation efficiency was very critical.

• Mechanistic Environment

Conditions for change in Bureaucratic culture,( In BSNL) • Govt changed the telcom license policy &FDI.

• Many of the competitor comes into existance : Monopoly( DOT ) Perfect Competition.(BSNL).• Choice of consumers

• DOT recruited employee are concerned about his pension

• Newly recruited employee(Every Year >3000 recruitment at Jr.&Sr. Level since october 2000) are concerned about their growth & future .

• 1999 (Aug) License fee (revenue share) reduced from provisional 15% to

12%, 10% & 8% on Circle wise basis (A type, B type & C type circles)

• 2000 TRAI Act amended & separate tribunal proposed

• 2001 (Jan) TDSAT started functioning

• 2001 (Jan) Policy announced for additional licenses in Basic and Mobile Services

• 2001 (Jan) Limited mobility allowed to Basic Services (CDMA spectrum allotted to Basic Service Operators)

• 2002 (Oct) BSNL entered in to GSM cellular operation w.e.f 19th October, 2002. Made incoming call free & initiated tariff equalization process Tariff for GSM cellular mobiles reduced.

Govt. Telecom Policy Changes in India

2003 (Nov) Unified Access (Basic & Cellular) Service License (USAL) introduced as a first step towards Unified License Regime.Technology neutral and allows provisioning any kind of service.

2004 (Apr) License fee reduced by 2% across the board for all the access licenses.

2004 (Oct) Announcement of Broadband Policy to provide high speed always on internet service.

2005 (Nov) FDI limit increased from 49% to 74% in Telecom Sector.

2005 (Dec) ILD & NLD Annual License fees reduced from 15% to 6%.

2007 (Oct) Dual technology allowed.

2008 (Feb) 120 new UASL licenses granted by DOT.

2008 (Aug) Issue of 3G guidelines for spectrum allocation through auction. Foreign players allowed to bid.

2008 (Aug) Guidelines for auction & allotment of spectrum for BWA services issued

2008 (Aug) Guidelines for Mobile Number Portability Service License issued

External Situational Factors1.Oppourtunity

• Can Improve on public sector image

• Fuller utilization of slack resources

2.Threats• Competition from private operators ,High Efficiency

• Employees are not adaptable with fast technological changes

Strategy Direction officialVision: To become the largest telecom Service Provider in South East Asia.  Mission: 

To provide world class State-of-art technology telecom services on demand at affordable price.  To provide world-class telecom infrastructure to develop country's economy.

Strategy Direction Operative

Skills & knowledge – Skill sets in traditional fixed line provision, maintenance, and administration. Professional & new skills lacking

Communication & Interaction – Is more in the government mode. Marketing & PR attitudes, skill sets lacking

Employee Motivation – At present very low.

Decision Guidelines - centralized decision making. Non flexible(Rigid) policies & Procedural delays

Standard of performance- Legacy of poor service image Limited number of value added services

Management in BSNLBSNL, has about 59,421 officers, of which 25,830 are entry level executives, 31,666 middle level executives and 1925 top level executives.

Top Level : Most of the executives recruitment was done by UPSC Executive through the IES exams as ITS Officers before the year of 2000.

These officers are working on deputation as DOT Employee & most of them are not absorbed by BSNL.

Middle level : 31,666 middle level executives Executive 5% ITS recruited executive(not absorbed in BSNL) +5%Direct

recruited executive by BSNL +90% promoted officers in the time of DOT(absorbed in BSNL)

Entry Level : 25,830 entry level executives.Executive 50% executives are direct graduate engineers recruited by

BSNL + 50 % executives are DOT recruited (absorbed in BSNL)

Role of Executives in BSNL :

They work across entire length and breadth of the country in highly inaccessible and remote areas like North East, Andaman Nicobar islands, J&K, Jharkhand, Assam where insurgency is a challenge always to face.Face most challenging situations like earthquakes, flood, tsunami, etc

ORGANISATIONAL SET UP OF BSNL (Previous)

TerritorialC ircles

Sr.DDG s,DDG s

DirectorHRD

Sr.DDG s,DDG s

Pro ject C ircles& Task Force

DirectorPlann ing

Sr.DDG s,DDGs

M aintenanceRegions

DirectorO perations

Sr.DDG s,DDG s

DirectorCom m l. & NI

Sr.DDG s,DDG s

DirectorF inance

CM D

PRESENT ORGANISATIONAL SET UP OF BSNL IS STILL CENTRALIZED.

Note: Service Functions includes F inance, H R D& M arketingLine Function includes N D C and O &MNIP: N etw ork Infrastructure ProviderND C : N etw ork D esign & C onstruction; O & M :O perations & M aintenanceHR D : H um an R esource D evelopm ent; Q A:Q uality Assurance

Finance

H RD

M arketing

N DC

O & M

Dir(Business I)

NP

Finance

HR D

M arketing

ND C

O & M

Dir(Business II)Basic S erv.

F inance

HR D

M arketing

ND C

O & M

Dir(B usiness III)(V alue Added

Services

D irF inance

D irectorHR D

Legal

Com panySecretary

RegulationM gm t.

C orporateAffairs

D irM arketing

Vig ilance

M gm t.Audit

Q A

Strategy &Technology

P lanning

CM D

P R E S E N T S E T U P O F T E R R I T O R I A L C I R C L E S

JT O s

A D E T s/A E s

D E s

D G M s/D IR s S W T R

P G M /G M (D)

JT O s

A D E T s/A E s

D E s

D G M /DIR (O )D G M /D IR (A D M )

P G M /G M (O )

JA O s

A A O s

A O s

C A O

G M (F)

JA O

A A O s

A O s

C A O s

D IR (F)

JA O s

A A O s

A O s

C A O

JT O s

A D E T s/A E s

D E s

T D M s

JA O s

A A O s

A O s

P H O N E M E C H .

JT O s

S D O s/A D E s/A E s

T D E s

A R E A G M s

C G M

21

STRUCTURE OF BSNL

1. 24 Telecom Circles and 2 Metro Districts at Chennai and Kolkatta.

2. 4 Transmission Maintenance Regions.

3. 4 Telecom Project Circles and IT Circle at Pune.

4. Telecom Quality Assurance, Testing and Development Circles.

5. Data Network Circle and 5 Telecom Factories.

6. Advanced Level Telecom Training Centers one each at Ghaziabad Jabalpur, and NATFM at Hyderabad, 11 Regional Telecom Training Centers (RTTCs) and one circle telecom training center in each telecom circle.

Recommended structure for BSNL

• Emphasis on Marketing is required for tracking new product ideas.Emphasis on Marketing is required for tracking new product ideas.

• New service process is to be emphasizedNew service process is to be emphasized

• Most functions should be decentralizedMost functions should be decentralized

• Formalization is limited to foster change and promote new ideasFormalization is limited to foster change and promote new ideas

• Overall structure should be organic; job roles should be less structuredOverall structure should be organic; job roles should be less structured

PORTER’S GENERIC STRATEGY MATRIX FOR BSNL

OVERALL COST LEADERSHIP- Landline service- Internet service- Cellular service

OVERALL DIFFERENTIATION

COST FOCUS- Leased circuit- Broadband

DIFFERENTIATION FOCUS- Intelligent network services

Cost Advantage Differentiation based

based we seek

Broad

Market we seek

Narrow

Analysis of Porter Strategy for BSNL:

Applying strategic framework BSNL indicates that there are various products

offered by BSNL and there are various segments of customers for each product

and each one would require a different approach. Hence if the company has to

service all the segments then it has to have a premium service for the

differentiation focus group at a premium rate. The bulk of corporate callers

would like the company to strike a right balance between price and

differentiation. The low calling group of residential or rural subscribers

would like to respond to the cost leadership. The above discussion

indicates that the issues faces by the organization during this changing

competitive environment and process of restructuring from government

department to company are complex and need to be tackled strategically

Miles and Snow’s Strategy Typology (cont’d)

Recommended strategy for BSNL is Analyzer

Balances efficiency and learning; tight cost control with flexibility and adaptability

Efficient delivery of service & quality ; emphasis on creativity, research, risk-taking for innovation

But Company most of the time acts as Reactor

-No clear organizational approach; design characteristics may shift abruptly depending on current needs

Four Approaches of Effectiveness Values

Human Relations Emphasis For BSNL is most concern to improve the effectivenessPrimary Goal: HRDSubgoals: cohesion, morale, trainingInternal Process Emphasis

Primary Goal: stability, equilibriumSubgoals: information mgt, communication

Rational Goal Emphasis

Primary Goal: productivity, efficiency, profit Subgoals: planning, goal setting

Open Systems Emphasis(same with HRE) Primary Goal: growth, resource acquisitionSubgoals: flexibility, readiness, external evaluation

Flexibility

Control

Internal

External

STRUCTURE

FOCUS

Integrated Effectiveness Model Strategy for BSNL

• Human Relations Emphasis : It is combination of focus on Internal & flexible structure of the organization.

• BSNL need to overhaul its Human Relations Emphasis and should focus on – Tie up with top business schools in India for training their managers at various levels.

• Redeploying its manpower from bigger cities to smaller ones• Coming out with VRS/CRS for manpower above the age of 50.• Creating value through employee motivation and should develop reward

and punishment system• Effective knowledge management within organization• Preventing manpower churning The VRS/CRS scheme is likely to be opposed by the unions and the

implementation may be difficult in the politicized environment. However, rightsizing the organization is of paramount importance for the long run interests.

Integrated Effectiveness Model Strategy for BSNL(Continue)• Open systems Emphasis : BSNL should have clear technology strategy in

line with its mission of providing services with world class State-of-art technology at affordable prices. Since the Telecom Industry is under going frequent technological revolutions the product cycles are very short. BSNL should go in for

• (1) innovative products based on convergent technology in order to acquire dominant market position. This can be achieved by –

• Replacement of all the outdated technologies immediately, • Redeployment of unutilized capacities should be considered first.• Early deployment of cost effective Wi fi/Wi max Technologies • Migrating to NGN (Soft Switch) on large scales, which will unable seamless

integration of upcoming technologies.• Increasing the capital investment in convergent technologies even if it

renders certain in use technologies redundant. • In spite of cost implications the alternatives of scaling/upgrading of existing

technology should not be considered since it will not yield the desired results. Instead the focus should be on achieving dominant market position through large-scale deployment of new technology.

2.BSNL should initiate Customer Orientation Strategy to retain existing customers as well as to attract new customers by –

Creating a Service-Oriented culture within the organization by linking incentives to customer satisfaction. Introducing flexible Registration Terms so that new customers are attracted. Promoting/Introducing user-friendly service systems such as Electronic Clearing system, internet or E-seva for bill payment Educating the customer about services in detail and respective tariff structure Introducing service at door-step.

Thanks