the original singareni case
TRANSCRIPT
H
9B11C043 SINGARENI COLLIERIES: FROM GLOOM TO GLORY
Professor S. Ramnarayan and Neha Gupta wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail [email protected]. Copyright © 2011, Richard Ivey School of Business Foundation Version: 2013-02-13
In April 2001, news reporters paced outside the headquarters of Singareni Collieries Company Limited (SCCL). As A.P.V.N. Sarma, the chairman and managing director (CMD) of SCCL, disembarked from his car, he was surrounded by reporters thrusting their mikes and notebooks at him. It was not the first time SCCL made headlines, albeit this time it was for the right reasons. SCCL had achieved a net profit of `894.1 million1 for the fourth consecutive year in 2000-01 under Sarma’s leadership. It was the same company that was declared “sick” (bankrupt) by the Board for Industrial and Financial Reconstruction (BIFR) twice — once in 1992 and again in 1996 — with accumulated losses of `12.19 billion. A reporter asked, “What is the most important factor in this turnaround?” “Building trust through communication,” replied Sarma, instinctively. Was that a fair assessment? ABOUT SINGARENI COLLIERIES SCCL traced its origin to a quaint event in 1870. A group of pilgrims camping near Singareni accidently set fire to the “stones” on which a cooking pot was placed. This strange occurrence of stones catching fire was reported to local authorities. In 1871, Dr. William King, an eminent geologist, investigated2 this event, discovering coal deposits in the Godavari Valley of Andhra Pradesh (AP).3. More than 100 years old, SCCL was owned by the government of Andhra Pradesh and the government of India with shares in the ratio of 51:49. With 10,435 million tonnes of coal reserves including 12 open cast and 55 underground mines in 1997, it had an enormous workforce of 114,486 employees with many employees characterized by low productivity.
1 `is the Indian rupee (INR) symbol. 2 Moid Siddiqui and RH Khwaja, The Acrobatics of Change: Concepts, Techniques, Strategies and Execution, Response Books, New Delhi, 2008, pp 199-204. 3 Andhra Pradesh is a fourth largest state (in area) in the south-eastern coast of India. In 2011, population = 84,655,533 and area = 275, 045 km2.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 2 9B11C043
Pandora’s Box SCCL primarily supplied coal to the power and energy sectors. In 1991, the opening of markets in India post-liberalization put pressure on the power and energy sectors as the rates that they could charge earlier were no longer economical. Indian companies began sourcing coal from countries such as Australia, Indonesia and China. With increasing competition and escalating costs in the face of administered pricing, coal prices became unprofitable for SCCL; it was referred to BIFR as a sick (bankrupt) company in 1992. To salvage the collieries that provided direct and indirect employment to people residing in and around SCCL facilities, the state and union government were compelled to work out a bailout package. With a bailout package from the government, SCCL paid off its debts and came out of the BIFR purview by March 1994. In the early 1990s, SCCL’s name was synonymous with strikes. On average, there were about two strikes every working day. Due to the onslaught of strikes for frivolous reasons, the number of working days declined drastically with enormous production losses (see Exhibits 1 and 2). Moreover, the labour-intensive underground mining was rendered unproductive by high absenteeism. It was also difficult to deal with the mine workers who were usually illiterate, poor, and prone to social evils like alcoholism and gambling. These problems were compounded by rampant lawlessness due to the pervasive influence of Naxalites4 (communism-inspired extremists) and the multiplicity of unions. The Trade Unions Act allowed a small group of employees to form a union easily. With the name printed on a pad, there were numerous self-designated unions. At SCCL, the number of trade unions and associations rose as high as 103 by 1998. Unions, with inter-union rivalry for supremacy, raised false aspirations among workmen and made unreasonable demands. If the management cut wages of the workers on strike, it inevitably led to industrial unrest. This forced management to focus on tackling strikes at the expense of production planning. Poor industrial relations, numerous wildcat strikes, militant trade unions, rampant lawlessness, high absenteeism, low productivity, administered coal pricing, and other adverse factors like a skewed debt-equity ratio, huge inventory and high interest burden had already set a downward slide in motion. Despite increases in labour and other costs, coal prices were not revised and continued to be unprofitable. SCCL was again declared ‘sick’ by BIFR in 1996. By 1996-97, the accumulated losses had risen to `12.19 billion. Performance had hit rock bottom — the worst ever in SCCL’s history of more than 100 years. DAWN OF A NEW ERA In January 1997, the corridors of Singareni were abuzz with speculation about the new CMD’s ability to save the sinking ship. APVN Sarma, who joined the Indian Administrative Service5 in 1974, had held a series of top positions in districts and departments in Andhra Pradesh (AP). He was district magistrate in Nalgonda, Guntur and Warangal districts. He was secretary of the AP state electricity board (1989-1992) and secretary to government of AP in general administration department (1992-95)6. He served as secretary to government of AP in the medical, health and family welfare department when he was deputed to SCCL. There was a palpable anxiety when Sarma reacted to the news of transfer to Singareni. He recollected
4 Naxalites patronized the unions and engineered a large number of strikes at the coal fields, paralyzing operations at SCCL. They were also involved in violent activities and created an environment of terror and fear for officers at SCCL. 5 Indian Administrative Service (IAS) is the administrative civil service of the executive branch of the Indian Government. It plays an elite, highly prestigious and strategic role in the country. 6 www.indiainfoline.com/Markets/News/Gati-appoints-APVN-Sarma-as-Independent-Director/5074484723; accessed May 4, 2011.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 3 9B11C043
calling up N. Chandrababu Naidu, the chief minister7 (CM) of AP to tell, “I am in the middle of healthcare reforms in the state. Why are you taking me away from the Health Department for a place like SCCL?” But, Naidu had made up his mind and had selected Sarma to transform SCCL into a vibrant company. Naidu assured Sarma there was an unwavering political will to implement bold and innovative measures to revamp the organization. He pointed out that the state government could not afford to shut down the only coal-producing company in Andhra Pradesh. A Reality Check The process of turnaround began in January 1997, when Sarma took over the reins of the company. During visits and interactions at the coal mines, Sarma was shocked to discover workers were unaware of the company’s bleak future. His initial diagnostic pointed to a huge disconnect between management and employees. He decided to establish immediate communication with the workers to inform them about the grim state of SCCL. In January 1997, with the help of a local language teacher he sent a letter to all employees in Telugu.8 He used very simple language to connect with barely literate workers who spoke Telugu. He made no attempts to disguise the poor performance of the company. While already anticipating results, K.V. Rao, staff officer to the CMD pointed out to Sarma9, “Sir, many workers are illiterate and cannot read. These letters might be a waste of time, effort and money.” As warned by Rao, the management team found that the majority of workers had no clue about the letter or its content. An undeterred Sarma sent a second letter on Ugadi10. He instructed his staff officer to use courier services to ensure that it reached everyone. They mailed it to the residence of workers to apprise their families about the company’s situation. The management team was skeptical about the impact, while Sarma was confident the letter in the hands of families would yield results. He was right, but management’s joy was diluted by unions’ protests against management communicating directly with workers. While recalling unions’ reaction to the first letter, Sarma mentioned, “The unions contended if the management claimed to have no money, how could it spend `500,000 in mailing letters?” Despite these protests, Sarma strove to promote direct lines of communication between management and workers. Strengthening the Top Management Team Sarma studied the organization and realized SCCL lacked a personnel head. During the manhunt for a good personnel head, he requested Naidu assign Heeralal Samariya to SCCL. Samariya was transferred to Singareni in February, 1997. Sarma mobilized support by involving the top management team in a systematic manner. The CMD met with the operating directors every fortnight to discuss strategies for organization development. Samariya, director personnel said, “The decisions were made collaboratively. Technical directors sometimes did not welcome certain ideas enthusiastically, but for the organization’s survival, they accepted and implemented the changes.” A year later, the tenure of K. Lakshminarayana, the director of finance, came to an end, placing Sarma on the lookout for another director. He identified and lobbied for A. Venkateswar, from Indian Railways, to
7 The chief minister (CM) is the elected head of government of a state of India. The CM enjoys almost exclusive executive powers. 8 Telugu is the primary language spoken in the Andhra Pradesh state. 9 Interview with APVN Sarma, May 20, 2011. 10 Ugadi, the New Year’s Day according to the Hindu calendar, is a very popular festival in the Andhra Pradesh state.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 4 9B11C043
join SCCL. Venkateswar reminisced, “SCCL’s offer came when I was looking for a transfer to AP. I joined at the right time and viewed the problems from the financial management angle.” Sarma also inducted the technical directors and chief industrial engineer into the change management team to gain a technical perspective. To develop a holistic view, Gopalrao T (ex-director and advisor to SCCL), KV Rao (staff officer to CMD), VV Subrahmanyam (head, communications cell), MS Venkataramaiah (secretary, Singareni Officers Association) and Pitchaiah and Satyanarayana Reddy (in-charge of Singareni Seva Samiti, i.e., welfare association) were involved as key change agents. BRIDGING THE TRUST DEFICIT After a host of informal and formal discussions with employees, Sarma concluded “bridging the trust deficit” was an imperative. The workers had been misinformed by the union leaders about the management’s intent and actions. As this realization dawned upon him, Sarma invited the entire management team to devise strategies to reconnect with workers. Improving Organizational Communication SCCL’s foremost strategy was “communicate, communicate and communicate.” SCCL announced a communication policy with a vision to “promote the spirit of Singarenism among Singarenians11.” The policy — a unique experiment in the public sector — aimed at reaching about 100,000 workforce members spread over 67 mines to develop a bond amongst workmen and executives. For the first time, this policy highlighted better communications with workmen as central to corporate functions. The aim of the communication strategy (see Exhibit 3) was to introduce transparency and plug the information gaps. The top management knew mere transference of instructions to lower levels and listening to employee grievances was not sufficient. They had to be proactive to undo the damage done by the unions propagating the “us versus them” rhetoric. Two letters sent in quick succession by Sarma marked the first step in reaching out to workers. The CMD wrote to the workers’ homes periodically on special occasions, to keep their families abreast of the organization’s status. Samariya viewed communication as a tool for discipline, especially to curb absenteeism. Samariya, director of personnel shared, “The letters explained financial performance, impact of productivity, how a worker could help, future of coal industry etc. Family members began to develop a sense of ownership and, as a result, motivated their bread earner to work hard.” Apart from letters, other innovative means of communication were also used. TVS Rao, the general manager (GM) of planning who became staff officer to CMD in 1998, stated: “The general manager for every area visited the worker colonies to understand the problems faced in the colonies. After 15 days, another officer would go to that colony to check if the problem had been resolved.” This spoke volumes about the management’s concern for workers. SCCL received complaints from customers about presence of iron filings in the coal. These filings led to wear and tear of the conveyor belt at a fast pace. Instead of reprimanding the workers for poor quality work, Sarma felt “seeing is akin to believing.” He sent two workmen to visit the client site at Raichur and they came back with the message: “If we don’t remove iron filings from coal, it will cut the conveyor belt.” The message was delivered to the workers without management speaking a word. 11 “Singareni Collieries Company Limited — A Turnaround,” SCCL Internal Report, prepared by Mouli.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 5 9B11C043
The management organized several open house meetings with middle level managers to discuss issues without inhibitions. There was no specific agenda. At these meetings, Sarma would ask: “If you were in my position, what would you do? Which areas would you like to improve?” Based on ideas shared by the employees, the management brought about a lot of improvements. Sarma recalled one such idea.
All the underground miners carried cap-lamps. Random checks showed that the number of cap-lamps issued and the number of people entering the mines didn’t tally. An employee suggested that 7:30 a.m. should be the deadline for issuing cap-lamps and entering the mines for the first shift. There was a hue and cry among the workers and hence it was extended to 8:00 a.m. Now, the lamp room would open only at 2:30 p.m. for returning the cap lamps. This change in issue timings helped us in ensuring that the employees were present throughout the shift.
The GMs were instructed by CMD to issue press releases periodically regarding progress at SCCL, such as employee achievements. SCCL also broadcasted talk shows and news features on company and its township activities on local television channels. These shows were an instant hit with the workers and their families as they personally knew the people on screen. Sarma shared, “Every communication channel reinforced the same message: If SCCL shuts down, you will be on the streets. If you work hard, the company will do well. You will earn more money, and your children will have better education.” Formation of Multi-departmental Teams In March 1997, management began the formation of multi-departmental teams (MDTs). The objective of MDTs was to bring together different functions, encourage lateral communications and develop organizational perspective. The team members — with about 15 years of experience — were assigned to a threefold mission: a) convey the top management’s messages down the line; b) inform employees about the organization’s health; c) carry suggestions from workers to the top management. The performance of the company, in terms of production, productivity and profitability, was shared by the chief industrial engineer (CIE) with MDTs. These teams prepared presentations depicting the performance of mines in every area. They then gave presentations to workers in mines and other employees in offices. They even visited worker colonies in the evenings to widen their reach to families. Local media were also invited to participate in the teams’ presentations. In April 1997, MDTs collated suggestions from employees. Sarma deliberated with MDTs on the feedback received from workers and implemented some of the ideas. In the second round, during August 1997, the agenda was expanded to include improvements in production, productivity, profitability, safety and health of workmen. A third round was held in December 1997 for executives and union leaders. The focus was on SCCL—past, present and future of coal industry. During the fourth round in April 1998, the status of coal industry vis-à-vis SCCL was presented to workmen and the remedial steps to sustain the company were thrown open for discussion. These discussions created a sense of urgency among the workers. Sarma recalled:
Unions had propagated that the management didn’t have the employee’s welfare at its heart. SCCL is located in areas prone to extremism where many extremist leaders had emerged from SCCL. Initially, our officers were apprehensive about being abused while approaching the workers, but with increased involvement of workers, officers were seen as
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 6 9B11C043
conduits of information. With honest and persistent efforts, workers started believing in us.
Demonstrating Care and Concern The management decided to improve the personal and professional lives of workers, who generally had low literacy and income levels and were prone to social evils such as alcoholism and gambling. SCCL started a literacy drive, focussed on sports and recreation, while establishing better housing and medical facilities. It launched a scholarship program for workers’ children. It campaigned for issues like importance of nutrition and sanitation, diabetes control, prevention of malaria, heart disease, HIV/AIDS and other health problems. Sarma recalled, “We recognized the hardships faced by workers who were referred to hospitals in Hyderabad. They did not have any accommodation and could not afford to pay for locally available facilities.” SCCL acquired a choultry (guest house) near Nizam hospital in Hyderabad for the patients’ families to stay. A clerk from Hyderabad office accompanied the workers to help them with routes and paperwork to get admitted in the hospital. Sarma followed an open-door policy, patiently listening to any worker’s or union’s problems. It was a custom to offer tea to anyone who dropped in at his office. He treated even a coal cutter at par with senior officials. Sarma even gave precedence to workers over officers waiting outside his office. Rao mentioned, “Sarma was a great humanitarian. Once, I recommended a worker suffering from AIDS to be treated on company’s expense. He immediately sanctioned it.” Sarma also mandated it for his staff officer Rao to pay a visit to workers in hospitals who met with accidents. Rao recollected, “If it was a fatal accident, I not only visited the accident site personally and consoled the family, but also attended the funeral of the worker. My role included notifying the family, explaining to them about the compensation, and most importantly, pacifying the workers.” The empathetic behaviour of the management made the workers feel cared for by the company. The management viewed literacy as the solution to multiple problems. They discovered a professor from California had developed a module to teach Telugu in seven days. Employees were put through a training program based on that module to enable them to read and write letters, notices and newspapers. Venkateswar, director of finance shared:
During Independence Day celebrations at SCCL, we invited three miners to the podium to read the newspaper. This generated a lot of excitement, but some trade union leaders were unhappy as they feared losing control over the workers, if they became literate. Similarly, some language teachers felt that they might lose importance and even their jobs with increase in literacy rates.
Previously, workers had received payment in cash at the mines. They were often exploited by bogus financial institutions offering lucrative interest rates or attractive gifts for investments in their firms, which often later ran away with the deposits of workers. Some union leaders were also moneylenders and wine-dealers who collected huge interest rates on debts from workers on the pay day. Management decided to disburse the salary through banks instead. Sarma stated, “Alcoholism among workers subsided as wine-dealers couldn’t access their money. The workers also became entitled to loans from banks which provided them with a safety net.”
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 7 9B11C043
SCCL set up area terminal benefit (ATB) cells to expedite the settlement of benefits on superannuation and death. These cells, serving as a one-stop solution for any settlement, reduced the settlement period from a few months to a few days. SCCL also launched a group gratuity scheme in October 2000. TVS Rao shared:
Mr Sarma launched the Singareni Seva Samiti (welfare association) to train the wives of workers vocationally and augment the family income. With the help of the army commandant in Hyderabad, we created awareness among children of workers about jobs in the Indian army. SCCL provided training for theoretical and endurance tests conducted by the army. These initiatives went a long way toward winning people over.
Enhancing Employee Motivation SCCL introduced an incentive scheme to measure and reward individual performance. For every year, in addition to the annual bonus depending on achievement of production targets by the department, employees received an incentive based on individual performance. On January 26, 1997, SCCL introduced an employee recognition program, including awards for Best Mining Worker and Best Non-Mining Worker in each area. Sarma recollected:
In the first year, the employees came alone. The next year, they came with their families. We garlanded the awardees, gave a certificate and a shawl. They also received a letter stating, “We recognize your efforts. It will not be necessary to recognize your best efforts a second time. In my eyes, you are always a Best Worker.” The wives often nagged their husbands, “When our neighbour can receive the Best Worker Award, why can’t you?”
In the 1990s, when SCCL was strapped for funds, learning and development activities were frozen. Sarma resumed these practices. He sent middle-level executives for advanced management programs (AMP) which included training in foreign countries and industrial visits. Venkateswar mentioned, “AMP programme was more like a reward. Transparent guidelines were created to select employees for AMP.” To build in-house learning and development capabilities, SCCL established the Nargundkar Institute of Management in November 2000 for management development programs. PROMOTING INDUSTRIAL PEACE Poor industrial relations and law and order problems had plagued SCCL for a long time. Until the late 1990s, Singareni Karmika Samakhya (SIKASA) — a militant organization — was a force to reckon with in the coal belt. Their activities were cause of concern for both the police and SCCL.12 Rao recalled:
SIKASA controlled the unions and threatened the management with dire consequences if their demands were not met. They killed two SCCL officers and kidnapped a few more officers. We were given two bodyguards to escort us from home to mines. Thankfully, with severe police crackdown backed by a strong political will, SIKASA suffered a drastic downfall.
At the same time, the multiplicity of politically motivated trade unions created multiple communication channels, each with a vested interest. SCCL was characterized by lack of discipline with high absenteeism, non-adherence to shift timings and delayed shift changeover. In 1998, SCCL decided to regulate unions by 12 www.hindu.com/thehindu/2002/01/14/stories/2002011403021300.html, accessed June 13, 2011.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 8 9B11C043
holding trade union elections. They approached the central government, the state government, and the labour commissioner. The state government supported the move, but the central government feared that it would aggravate the problems. With the help of the chief minister of state and labour commissioner, eventually the central government also agreed. Sarma shared:
While there was little resistance from employees, the unions vehemently opposed the elections, threatening violence. We believed that if general elections could be held in Naxal-infested (politically unstable and violent) areas, we could definitely hold elections at SCCL. We decided to use police force to thwart any untoward event.
For the first time in the Indian coal industry, trade union elections were held through secret ballot at SCCL in September 1998. 13 unions contested and S.C. Workers’ Union — AITUC13 — emerged as the company’s recognized union with the highest number of votes — 33.24 per cent. It was clearly established that outside of the recognized union and the representative union of the area, the management would not deal with any other union. Post elections, five out of 77 unions were recognized and discussions were held only with the elected unions. Previously, unions had approached mine managers every day with requests for exemptions. Now, only the recognized union could discuss issues with the management on a designated weekday. It also solved the problem of inter-union rivalry. Samariya recalled:
Initially, SCCL treated strikes as a can of worms. I advised CMD to convert strikes to our advantage. We declared that during strike, workers would lose the right to ask management for anything, including salary. We began to negotiate with unions for hard decisions favouring SCCL. If they didn’t agree, they were free to continue the strike with loss of pay.
Post elections, explicit disciplinary policies were laid down to monitor employee’s performance and attendance. With complete support from the state CM, Naidu, extremely tough policies and management decisions were implemented for reforms. Since these policies were shared with everyone, there was an element of transparency. Rao mentioned:
Earlier SCCL could not take strict disciplinary action against irregular employees because of pressures from unions. We issued a circular notifying the workers being absent for more than 100 working days will result in dismissal. Later, over 1500 employees were dismissed on account of poor attendance. It sent out the message loud and clear.
After 18 years, August 2000 finally became a strike free calendar month at SCCL. MANPOWER RATIONALIZATION In the 1990s, SCCL was characterized by huge manpower and low productivity. At SCCL, dependants of an employee were entitled to a job (even without a vacancy) if the employee died in service or became medically unfit or retired voluntarily. Samariya explained:
A worker, before three to five years of his retirement, would get a medically unfit certificate to enable his son to join SCCL. In some cases, the workers adopted daughters so that their sons-in-law could enter SCCL.
13 The All India Trade Union Congress (AITUC) is the oldest trade union federation in India and one of the five largest unions.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 9 9B11C043
After establishing rapport with workers, the policy was altered to give employment to dependents strictly against a vacancy. The wives of deceased employees were offered the alternative of ` 3500 as a monthly pension. SCCL also introduced the voluntary retirement scheme (VRS). It decided to centralize recruitment and transfers to ensure transparency in deployment of resources. The centralization checked arbitrary decision-making with regard to transfers from underground mines to surface, coal fillers being engaged in peripheral activities, inter-area transfers, etc. The rationalization of manpower from 114,486 in 1996-97 to 105,627 by 2000-01 also led to increase in productivity (see Exhibit 4). THE NEWFOUND GLORY With Sarma at the helm and unstinting support from the state government led by Naidu, SCCL posted profits for four consecutive years. The net profit rose to `894 million in 2001. The accumulated loss had dramatically declined by 53.6 per cent from `12.19 billion in 1996-97 in a span of four years (see Exhibit 5). The accumulated losses stood at `5.65 billion in 2001. Sarma walked down the hallway beaming in the newfound glory of SCCL. On his way to the office, he responded to all the pleasantries and congratulatory messages from colleagues while his mind jostled with his reply to the reporter. He wondered if he had actually succeeded in establishing trust and direct lines of communication with workers. As he approached his office, he saw two mine workers waiting outside his office to have a word. The sight of the workers sitting in front of a plaque on the wall that read, “Trust men and they will be true to you; treat them greatly and they will show themselves great — Ralph Emerson” brought a bemused smile to his face, laying his doubts to rest.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 10 9B11C043
Exhibit 1
NUMBER OF STRIKES AT SCCL
Year No. of strikes Man-days lost (in ‘000)
Production lost (in ‘000 Tonnes)
88-89 378 763 944
89-90 435 3223 2455
90-91 445 3419 2784
91-92 475 1422 1353
92-93 430 888 841
93-94 214 417 410
94-95 268 552 527
95-96 191 368 3203
96-97 310 1004 965
97-98 355 908 777
98-99 124 1854 1579
99-00 98 1318 1580
00-01 47 295 356
Source: SCCL’s internal documents.
Exhibit 2
ANALYSIS OF STRIKES
Cause / Reason 96-97 97-98 98-99 99-00 00-01
Unsatisfactory working conditions
50 97 61 29 10
Wage related issues 64 58 21 23 07Protest against disciplinary action
29 20 05 03 01
Sympathy for accidental deaths 14 15 11 10 06Dependent employment 02 0 0 0 0Bandh (no work) call by other organisation
07 03 02 04 01
Miscellaneous 144 162 24 29 22Total 310 355 124 98 47
Source: SCCL’s internal documents.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 11 9B11C043
Exhibit 3
COMMUNICATION STRATEGIES
Vision: Promoting the spirit of ‘Singarenism’ among ‘Singarenians’
1. Individual letters to workers from CMD and general managers (GMs).
2. Talk shows and news features on SCCL/township activities in local TV channels.
3. Proactive press meets/releases to create public awareness.
4. Organizing short plays/programs on safety and social issues like alcoholism etc.
5. Posters at mines to educate workers about health, safety, education etc.
6. ‘Dial your GM’ program in all areas on local TV channels.
7. In-house magazine for dissemination of information and highlighting exceptional
achievements by mines/departments and workers.
8. Discussions with workmen and their families in colonies by MDTs.
9. Visits by coordination committee headed by area GM to mines and colonies.
10. Resident welfare committees to supervise various welfare measures.
11. Industrial visits by workmen/union leaders to other coal fields.
12. Periodic structured and joint consultative meetings with recognized unions.
13. Periodic safety committee meetings with workmen and union leaders.
14. Counseling teams emphasized the need for industrial peace, work culture and good habits to
workmen and their families.
15. Organizing sports events and recreation activities.
16. Presentations by MDTs on SCCL’s financial health at mines, offices and colonies.
Source: SCCL’s internal documents.
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.
Page 12 9B11C043
Exhibit 4
TOTAL MANPOWER VERSUS PRODUCTION AT SCCL
Source: SCCL’s internal documents.
Exhibit 5
FINANCIAL PERFORMANCE OF SCCL
Particulars 1999-2000 2000-2001 2001-2002
Sales (in ` billions) 26.50 27.43 29.49 Production (MTs) 29.56 30.27 30.81 Output per manshift (Tonnes) 1.24 1.25 1.34 Net Profit/Loss (+/-) (in ` billions)
(+)3.02 (+) .89 (+) 3.26
Cumulative Profit/Loss (+/-) (in ` billions)
(-) 6.48 (-) 5.66 (-) 2.61
Source: SCCL annual reports.
114.486
112.146
109.419107.817
105.627
26.77
28.73428.941
29.556
30.274
25
26
27
28
29
30
31
90
95
100
105
110
115
120
1996-97 1997-98 1998-99 1999-00 2000-01
in m
illio
n t
on
ne
s
(in
'00
0)
YearsTot_Manpower Production
Aut
horiz
ed fo
r us
e on
ly b
y se
yedb
ahira
farz
adki
sh in
mba
at U
nive
rsity
of T
ehra
n fr
om S
ep 0
2, 2
014
to J
un 0
8, 2
015.
Use
out
side
thes
e pa
ram
eter
s is
a c
opyr
ight
vio
latio
n.