Principles of Management

Report by:
1. Aiman Khan
2. Maryam Hashmi
3. Syed M. Bilal Ali
4. Syed Waqas Tariq
5. Syeda Fozia
Mobeen
 Mission Statement
We are committed to leadership in energy market through competitive
advantage in providing the highest quality petroleum products and
services to our customers,
• 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.
 VISION
To excel in delivering value to customers
as an innovative and dynamic energy
company that gets to the future first.
Policies/Rules and Regulations
• The health of its employees, contractors, customers and
public is protected.
• All activities are carried out safely.
• Environment is protected.
• Comply with Pakistan’s relevant laws and regulations.
• Ensure that all its activities are carried out in accordance
with the Company’s Health, Safety and Environmental
Standards and Procedures.
• Ensure that environmental performance meets legislative
requirements.
• Require every employee to exercise personal responsibility
in preventing harm to self or others and to the environment.
Policies/Rules and Regulations
• Maintain public confidence in the integrity of its operations by
openly reporting its performance to all stakeholders who work with
the Company.
• Provide appropriate Health, Safety and Environment
training/information to employees, contractors and other
stakeholders who work with the Company.
• Promote prevention of pollution and proper handling and disposal
of solid, liquid wastes and gaseous emissions.
• Continuously improve our performance by improving the
leadership, capability and capacity of our organization.
 Goals and Plans
• Empowering Employees – Offering greater career
development opportunities
• Hiring, training and developing staff skills to find the right
person for the right job
• Reorganizing organizational objectives in line with latest
business practices
• Quicker organizational response time
due to a lean and efficient structure
• Systematic and transparent handling
of all HR issues
 Core Competency
• Pioneer in product and service innovation
• Most new vision outlets
Sustainable Competitive Advantage

• Largest no. of outlets throughout the country.

• Very stable road system and transportation.
• Government Support
 SWOT ANALYSIS
Strengths
Weaknesses
1. Leading Public Sector Company of
Pakistan, PSO has been driving the wheels 1. Lost & Dissatisfied customers are
of the national economy and is the first major weakness of PSO as they are
public company to pass the 1 Trillion rupee causing the perception of inefficient
revenue mark.
PSO
2. The Company possesses the country’s
largest storage capacity representing 2. Old retail outlets are major
majority of the nation's total storage weakness for PSO as they are not
capacity. enough capable to compete the
3. PSO possesses the largest distribution Shell outlets
network in the country comprising of 3500+
outlets 3. Quality assurance is not so effective
4. Financial Stability with strong reserves, to build image of “Quality and
paid up capital adds to the trust of Quantity”
shareholders
5. Relations with government is one of the
greatest strengths of PSO in order to get
legal protection
6. Product line widths adds long range of
products for more revenue opportunities
 SWOT ANALYSIS
Opportunities Threats
1. Exploring new product markets, expanding 1. Risk of forward integration of
the lubricants product range, further Supplier is the key threat for PSO
expansion of the company retail network,
and reducing product movement costs.
and other OMCs in Pakistan
2. Afghanistan’s Market is the biggest 2. Risk of diversification in new
opportunity for OMCs in Pakistan. technology is also a key threat to
3. Deregularities of Oil industry in Pakistan PSO as new technology is leading to
add the opportunity to fill the deficiency in decline in its products
few sectors of petrochemicals markets
4. Export Opportunities of Black Oil Products
is also adding the opportunities by exporting
Black Oil products, which is facing
downfall due to the introduction Gas Oil.
5. 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.
BCG Matrix
 Customer Analysis/Target
Market
Oil industry’s market can be mainly segmented into
two according to the nature of their products and its
usage.
INDUSTRIAL CUSTOMERS
 Pakistan Railways
 Defense
 Pakistan Steel Mills
 Engro Chemicals
 WAPDA
 Agriculture Sector (tractors, harvesters & cultivating machines)
 OGDC
 NLC
 POF
 Customer Analysis/Target
Market
INDIVIDUAL CUSTOMERS
• Company owned service stations
• Retailers
• Personal use
USERS:
• The users of our product line are:
• Vehicle Owners
• Industrial machine operators
(usually maintenance departments)
Organogram
 No. Of Employees
In PSO, there are employees of different categories in
which 1100 are the management employees,700 are
non management employees and 1100 -1200 people
are outsourced i.e. Third party contract.
 Departments
1. Financial Department
2. Marketing Department
3. Sales Department
4. Research and Development Department

Support Departments
1. Brand Management and Communication
2. Customer Services
3. Public Relations and
Public Affairs
 Culture
• Sales oriented and customer responsive company
• Strong culture
• A strict adherence to the unity of command principle
• Boost corporate performance; innovative culture
 Environmental
Uncertainty Matrix
• Government owned
• Geographical factors
• Law and order
• Economical condition
• Government Pressure
• Complex and Dynamic
Environment
 Type of Environment
• Contemporary Environment
• Facing new challenges and new hindrances
• Organic and Dynamic environment
Hiring, Selection, Training and
Compensation
• HIRING:
 The vacancies available are qualification based and
anyone being a fresh graduate or having less than 5
years of experience can apply, however vacancies
would be announced as & when required.
Hiring, Selection, Training and
Compensation
• SELECTION:
 Current employees are already adjusted with the
culture of organization. It reduces the cost
involved in recruitment, selection, orientation and
training programs. Nonetheless, applicants are
selected according to their experience, abilities,
competitiveness and educational background. The
selection process includes the steps of preliminary
reception, written test, interview, references and
background check and medical evaluation.
Hiring, Selection, Training and
Compensation
• TRAINING:
 The training that is provided in PSO is for every
employee but which training is provided to whom
that is selected. Training is done by the organizational
development department.
Hiring, Selection, Training and
Compensation
• COMPENSATION:
 Golden handshakes are allotted to employees at the
time of leaving if they have been working in the
company since 15 to 20 years. Increments are also
given at the end of the year, increments are percentage
of salaries. Promotions are given on good performance
after completing two years in the current grade.
Bonuses are given on worthy performances as a way of
appraising. Bonuses are also given to the permanent
employees on both of the Eids and on other times too if
the management decides to do so.
 Types of Structure Design
Traditional structure
Pyramid style
Strict chain of commands
Tall Structure
 Structure Elements
• Work specialization:
 Done in some departments like the tax department,
broadness of the knowledge is not as much important
as the depth of the knowledge, lubricants and
chemical department. The engineers and workers of
chemicals and manufacturing plants. That is why they
plan rotations in jobs too, to increase employee
knowledge breadth.
• Departmentalization:
 It is departmentalized according to the product.
 Structure Elements
• Chain of command:
 There is a very strict chain of command everybody knows
till where their authority is, so all the rules and regulations
in the manuals are strictly followed.

• Span of control:
 Span of control varies with the level of management. In
certain departments the General Manager control 5 to 6
people and in some departments, like the retail department
the General Manager controls a very vast team. Span of
control varies from manager to manager and the nature of
the job. It is centralized to some extent.
 Structure Elements
• Centralization:
It is a highly centralized organization as it is
under the hold of the government so they are
bound to follow the manuals as well as the
rules and regulations.
• Formalization:
It’s highly formalized since the jobs offer little
discretion over what employees are supposed
to do.
 Forms of
Departmentalization
They have all sorts of departments, but the status
of the company is that it is a marketing
company i.e. OMC (Oil Marketing Company).
They have their retail side as well as the
logistics side, so the support system is always
there. Therefore basically it is a marketing
based company.
 Motivation
 Market competitive salary structure
 Salary structure is revised every 2 to 3 years
 The 55th or 60th percentile
 Allowances, Bonuses, LFA and Retirement
Pension
 Work environment that the employees get to work
in
 Terminal benefits
 Medical facilities
 Every day meals
 Diversity
5% female workforce.
Some employees belong to different religions
and they are from different areas of Pakistan.
The ethnic diversity is to a very limited extend.
 Leadership Style
They follow a very autocratic style because they
follow a very strict chain of command and they
have little power to make decisions. All the
decisions are made by top level management.
 Standard Operating
Procedures (SOPs)
• SOP for everything from filling a tank lorry to an
employee filing a complaint.
• Authority manuals
• Procedures manual
• Not rules, but laws which PSO
has to abide by
• Under the hold of the government
 Performance Measures
For the management employees, appraisals are
done every year, all the employees are placed
on a bell curved. The high performance on one
side, the low performance on the other side
and the average performance in the middle.
 Standard and Quality Checks
(ISO)
• Zero tolerance policy for testing of products.
• Laboratories ensures that each consignment of
petroleum product meets the testing requirements.
• every consignment is tested up-to-the-minute by
advance methodical procedure and equipment.
• PSO holds five laboratories across Pakistan.
Thankyou!