Case Study Description of Bharat Petroleum: Long-Term Wage Settlement
In May 2012, the director of human resources at Bharat Petroleum Corporation Limited was involved in negotiating a long-term collective agreement between management and the unions at the large public-sector oil corporation in India. The negotiations had begun in 2009 and were stalled largely because of wage issues. Due to time-bound promotions and open-ended pay ranges, workers' salaries had spiralled out of control. When economic conditions changed from an administered price mechanism with government subsidies to one in which the corporation was expected to compete with national and multinational private-sector companies, the issue of high operating costs had to be addressed. After 13 rounds of discussions, there was still no agreement. The management team needed to decide which of the issues originally identified were essential for resolution and which were only desirable. The team also had to decide how to approach the negotiation in order to secure agreement from the unions. Zubin R. Mulla is affiliated with Tata Institute of Social Sciences.
Swot Analysis of "Bharat Petroleum: Long-Term Wage Settlement" written by Zubin R. Mulla, Sushil Patil, Mansi Dubey, Jasleen Kaur includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bharat Wage facing as an external strategic factors. Some of the topics covered in Bharat Petroleum: Long-Term Wage Settlement case study are - Strategic Management Strategies, Labor, Negotiations and Organizational Development.
Some of the macro environment factors that can be used to understand the Bharat Petroleum: Long-Term Wage Settlement casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing commodity prices,
increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Bharat Petroleum: Long-Term Wage Settlement
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bharat Petroleum: Long-Term Wage Settlement case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bharat Wage, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bharat Wage operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Bharat Petroleum: Long-Term Wage Settlement can be done for the following purposes –
1. Strategic planning using facts provided in Bharat Petroleum: Long-Term Wage Settlement case study
2. Improving business portfolio management of Bharat Wage
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bharat Wage
Strengths Bharat Petroleum: Long-Term Wage Settlement | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bharat Wage in Bharat Petroleum: Long-Term Wage Settlement Harvard Business Review case study are -
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Bharat Wage digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bharat Wage has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Bharat Wage in the sector have low bargaining power. Bharat Petroleum: Long-Term Wage Settlement has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bharat Wage to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Bharat Wage has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Bharat Petroleum: Long-Term Wage Settlement - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Bharat Wage is one of the most innovative firm in sector. Manager in Bharat Petroleum: Long-Term Wage Settlement Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Organizational Development field
– Bharat Wage is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bharat Wage in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Bharat Wage has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bharat Petroleum: Long-Term Wage Settlement Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Bharat Wage is present in almost all the verticals within the industry. This has provided firm in Bharat Petroleum: Long-Term Wage Settlement case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Sustainable margins compare to other players in Organizational Development industry
– Bharat Petroleum: Long-Term Wage Settlement firm has clearly differentiated products in the market place. This has enabled Bharat Wage to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Bharat Wage to invest into research and development (R&D) and innovation.
Strong track record of project management
– Bharat Wage is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Bharat Wage is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bharat Wage is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bharat Petroleum: Long-Term Wage Settlement Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Bharat Wage
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bharat Wage does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Bharat Wage has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Bharat Petroleum: Long-Term Wage Settlement HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Bharat Petroleum: Long-Term Wage Settlement | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bharat Petroleum: Long-Term Wage Settlement are -
Slow decision making process
– As mentioned earlier in the report, Bharat Wage has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Bharat Wage even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Bharat Wage has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Bharat Petroleum: Long-Term Wage Settlement should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Bharat Wage has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Bharat Wage has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study Bharat Petroleum: Long-Term Wage Settlement has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bharat Wage 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bharat Wage is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bharat Petroleum: Long-Term Wage Settlement can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Bharat Petroleum: Long-Term Wage Settlement that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Bharat Petroleum: Long-Term Wage Settlement can leverage the sales team experience to cultivate customer relationships as Bharat Wage is planning to shift buying processes online.
Need for greater diversity
– Bharat Wage has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Bharat Wage is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Bharat Wage needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bharat Wage to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bharat Petroleum: Long-Term Wage Settlement, is just above the industry average. Bharat Wage needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Bharat Wage needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Bharat Petroleum: Long-Term Wage Settlement | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Bharat Petroleum: Long-Term Wage Settlement are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bharat Wage is facing challenges because of the dominance of functional experts in the organization. Bharat Petroleum: Long-Term Wage Settlement case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Bharat Wage can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Bharat Wage to increase its market reach. Bharat Wage will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Bharat Wage can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Creating value in data economy
– The success of analytics program of Bharat Wage has opened avenues for new revenue streams for the organization in the industry. This can help Bharat Wage to build a more holistic ecosystem as suggested in the Bharat Petroleum: Long-Term Wage Settlement case study. Bharat Wage can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bharat Wage to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Bharat Wage to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Bharat Wage can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Bharat Wage has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Bharat Petroleum: Long-Term Wage Settlement - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bharat Wage to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bharat Wage can use these opportunities to build new business models that can help the communities that Bharat Wage operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Buying journey improvements
– Bharat Wage can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bharat Petroleum: Long-Term Wage Settlement suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bharat Wage can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bharat Wage can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bharat Wage can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bharat Wage can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Bharat Petroleum: Long-Term Wage Settlement External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bharat Petroleum: Long-Term Wage Settlement are -
Technology acceleration in Forth Industrial Revolution
– Bharat Wage has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Bharat Wage needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bharat Wage can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Bharat Petroleum: Long-Term Wage Settlement .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bharat Wage in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Bharat Wage high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Bharat Wage business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Bharat Wage needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Bharat Wage can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bharat Wage needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bharat Wage can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Bharat Wage needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bharat Wage will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bharat Petroleum: Long-Term Wage Settlement, Bharat Wage may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bharat Wage in the Organizational Development sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Bharat Petroleum: Long-Term Wage Settlement Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Bharat Petroleum: Long-Term Wage Settlement needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Bharat Petroleum: Long-Term Wage Settlement is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Bharat Petroleum: Long-Term Wage Settlement is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Bharat Petroleum: Long-Term Wage Settlement is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bharat Wage needs to make to build a sustainable competitive advantage.