Mindset Challenges at Aluminum India Limited: Privatization of a State-Owned Enterprise

1. Mindset Challenges at Aluminum
India Limited: Privatization of a
State-Owned Enterprise
Presented by -
Palash Goyal
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2. INTRODUCTION
• This case study is about Anita Noorani, the
chairperson of a private industry Albright
Industries.
• The Central Government of India sold 49%
equity and gave management control of
Aluminum India Limited (AIL), an aluminum
manufacturing state-owned enterprise (SOE), to
the Albright Group in 2002, as a move to
attract CAPITAL INVESTMENTS.
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3. Cont..
• Anita Noorani chairperson of Albright took
over AIL she had to deal with:
- a 30-year old manufacturing plant,
- an aged workforce,
- decreasing market share,
- and a 57-day employee strike(against sales
of AIL shares to private companies).
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4. Challenges….
• Noorani had to transform State –owned
enterprise into Market-driven Organization.
• Rationalize the workforce without alienating
them.
• Set a marketing strategy to influence on
growing market.
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5. Before Privatization….
• AIL headed by retired Lieutenant General
from Indian Army.
• A project management system was there.
• Employees were encouraged to be more
productive by giving them free water,25%
rebate for electricity and provision of 15 day
sick leave with full pay.
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6. Cont..
• Four shop councils were constituted resulting which
immediately the outputs were exceptionally more productive.
• The welfare-oriented industrial, labour and legal policies
entrenched the beliefs among employees that - they had a right
to work and employment and organizational survival is duty of
government..
this reduced employees’ sense of Responsibility &
Accountability.
• Dependence on govt. created political culture.
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7. After Privatization….
• 5 workers unions & 2 employee association
formed a coalition and they go on strike
against privatization.
• Due to failure of tripartite talks and 52 days
into strike , state govt. withdrew their support
of the strike & announced that employees must
talk to Albright management to resolve
conflicts.
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8. Cont….
• Albright filled an Affidavit in court offering to
pay 2 months wages as advance payment if
the employees resumed work.
• Strike was called off on 57th day.
• Albright agree to pay-
- 30,000 advance (for strike period).
- 3,000 Severance allowance (for hired
during strike period).
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9. Change Initiative….
• Revive the Smelter.
• She hired an outside professional for fear of sabotage.
• A new information system was installed for better
financial management and linked to various
production divisions.
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10. Cont…
• Hired a new HR (Human Resource) – for
successful change in management initiatives.
• Training Programme for middle & top
management to develop market orientation,
new operations and management skills.
• A monitoring system installed – track sales
trends, sales target & rates of achievement.
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11. Recommendations….
• Non-monetary incentives: (promotion ,
appreciation, leaves etc)to boost the morale of
employees.
• Decision making: worker participation in
decision- making of an Organization , so they
think they are part of organization.
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12. Cont…
• Job feature: Making job of workers
interesting, so they will get motivated and
work according to organizational goal.
• Positive reinforcement: This implies giving a
positive response when an individual shows
positive and required behavior. For example -
Immediately praising an employee for coming
early for job.
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13. Conclusion…
As we all know Human Resource are most
important resource of an Organization ,
without their support Organization’s goals can
not be achieved , so we conclude that workers
should be motivated towards their job and their
personal interest and goals should be achieved.
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14. Question by Review group
• Why was Noorani In dilemma over purchasing
49% share?
• Why AIL was put on sale?
• What was the problem in stream lining
production?
• What were the initiative Noorani took. Do you
think these would work?
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