From the Start of KESC, or K-Electric, Till Present, Why It Declined And How It Overcame The Hurdles To Become A Strong Market Player Again

1. Decline and
Revival
By: Abu Huzaifa (18570),

2. Content
1. Mission and Vision Statements
2. Introduction
3. Why Privatization?
4. Organization Structure and Design
5. Adding Positions and Departments
6. Interdependence
7. Political Environment and Effects of
Culture on Organization
Effectiveness
8. Corporate Culture At K-Electric
9. The Decline of K-Electric
10.Revival from Decline
11.Conclusion

3. Mission Statement
“Brightening lives by building the capacity to deliver
uninterrupted, safe and affordable power to Karachiites.”
Vision Statement
To restore and maintain pride in KE,
Karachi and Pakistan.

4. Introduction
1913
1947 2005
1970 2009
Starting Increasing
Demand
Industrialization Privatization
On 13th September 1913,
the Karachi Electric Supply
Corporation was formed to
meet the power needs of a
small port town called
Karachi.
As Pakistan became
a reality, Karachi
saw a sudden surge
in population and
power demand also
increased rapidly.
To meet the growing
industrial, commercial
and residential
demand, eight new
generating plants were
added, with a total
capacity of 513 MW
KESC was privatized,
with the government
retaining a stake of
approximately 26%,
while 71% was
transferred to a foreign
consortium.
USD 2.4 billion were
invested in KESC, adding
1,057 MW of generation
capacity.
KESC posted a profit for
the first time in 17 years in
2011-12
Turnaround
and Growth

5. Why Privatization?
Before After

6. Organization Structure and Design
● KESC structure used to be a too complex lot of
decentralization approaches were used.
● Too much formalization when one department
wanted to communicate with other department.
● After Privatization management style changed to
centralized and better hierarchy was created as
shown in picture.
● Many employees were layoff to further smooth the
operations which were taking too much time
because of inexperienced labour.

7. Adding Positions and Departments
If we talk about K-ELECTRIC, it also added several departments in their organization to tackle
both internal and external problems, and grievances of customers.
A disciplinary committee in 2010, for the first time because they found out the frauds and cons
done by the employees of the company and some of the executives about 1350 employees were
fired.
More positions and departments are introduced as the time changes and technology and external
environment evolves like they hired more accountants when the banking sector evolved and
people started using internet banking.
Technical core was also hired to establish better presence on digital platforms.

8. Adding Positions and Departments
If we talk about K-ELECTRIC, it also added several departments in their organization to tackle
both internal and external problems, and grievances of customers.
A disciplinary committee in 2010, for the first time because they found out the frauds and cons
done by the employees of the company and some of the executives about 1350 employees were
fired.
More positions and departments are introduced as the time changes and technology and external
environment evolves like they hired more accountants when the banking sector evolved and
people started using internet banking.
Technical core was also hired to establish better presence on digital platforms.

9. Adding Positions and Departments
If we talk about K-ELECTRIC, it also added several departments in their organization to tackle
both internal and external problems, and grievances of customers.
A disciplinary committee in 2010, for the first time because they found out the frauds and cons
done by the employees of the company and some of the executives about 1350 employees were
fired.
More positions and departments are introduced as the time changes and technology and external
environment evolves like they hired more accountants when the banking sector evolved and
people started using internet banking.
Technical core was also hired to establish better presence on digital platforms.

10. Different Goals and Orientations among Departments

11. Interdependence
Interdependence refers to how departments rely on each other for resources or materials to perform
their functions.
High dependence means that departments must exchange services regularly.
Pooled interdependence:
Pooled interdependence is the lowest form of interdependence between departments. K-Electric is
using the pooled interdependence as they are working independently within the departments and
reporting to one main department. This type of approach is also known as Centralized.

12. Political Environment and Effects of
Culture on Organization Effectiveness
Office Politics was nothing new in KESC as it was an
government owned company.
People were hired on the bases of their ideology, race, and
influence.
People were promoted and sacked because of this.
Resulted in protests by employees, corruption, and hiring of
unprofessional employees.

13. Corporate Culture At K-Electric
It refers to the values ​​and ethics of employees and managers and how they handle
external/internal business transactions.
In KE, information flow from upper management to lower level was very low and there was no
direct connection between departments, so it was hard to know what is going on in the other
departments. Formalization is high and red tape is also found at KE.
This resulted in:
● Unfair policies for resource allocation,
● no chances for growth,
● long hours were given by the employees because of no coordination.

14. The Decline of K-Electric
There were several reasons behind that which are as follows.
1. Too much formalization results in red tape.
2. Decentralized decision making at lower levels results in a
power struggle between lower-level managers.
3. Too much paperwork for customers who wants a new
connection or file a complaint.
4. Little to no digital presence.
5. Outdated technology.
6. Ill infrastructure.
7. Low capital and investments that could have been used
for R&D and the improvement of technology.
8. Unstable government.
9. Inexperienced internal core.
10. Electricity theft.

15. Revival from Decline
For revival KE followed 3 Steps:
● Planning
Analyzed the core problems, by checking previous progresses and records of profit losses and complaints
they got from customers.
● Forecasting
After analyzing the company’s current position at that time and problems, they forecasted the future of the
company, and the plan which they came up with was implemented as response.
● Responsiveness
1. They downsized the company
2. Hired people on the basis of expertise
3. Changed the management style (decentralized to centralized)
4. Made a Strategic Partners (Government and other related organizations.)

16. Conclusion
● A company initially made for one city and some areas surrounding it eventually became
much bigger by the time (Karachi, Dhabeji and Gharo in Sindh, and Uthal, Vinder and Bela
in Balochistan).
● Faced many ups and downs while being government owned organization, but later got
privatized which resulted in much needed growth and development.
● Spended huge amount of money for betterment of equipments, and infrastructure to convert
some or all the sectors into profit making sectors or at least no profit no loss sectors.
● Changed management style.
● All of the efforts, changes, downsizing and hard work paid of after 17 years and company
started making profits.

17. THANK YOU