Organizational ethos and culture at ONGC: an empirical study.

Farooq, Ayesha ; Sethi, Seep

Public sector enterprises play a significant role in the all-round development of the country. They need to operate at the maximum level of efficiency and productivity. Productivity improvement in their working gives a fillip to national economy and prosperity for the entire nation. In order to introduce the spirit of productivity and efficiency of the workforce, there is a need to develop a new work ethic as well as corporate culture. Culture of any company heavily relies on the ethos of the organization; values which are practiced and shared by the organizational members.

The Public Sector enterprises have twin objectives- commercial and noncommercial. In a private enterprise, the process of goal setting is comparatively simpler and is primarily influenced by economic considerations. In a public enterprise, goal setting is a complex socio-techno-economic process, which is influenced by the perceptions of different stakeholders, namely, employees, government, politicians and society.

Organizational Culture

The organizational culture plays a very significant role in making organizations get the best out of themselves. Culture provides the energy needed to function well by ensuring as it were a proper circulation of blood through all the organs.

The Corporate culture is one that results from the belief of the top management initially and subsequently from the HRD systems and practices.

Organizational culture shapes the values and beliefs of the members. Organization culture is defined as shared managerial beliefs and assumptions about employee nature and behavior (Ayean et al., 2002). Geert Hofstede (1980) has clearly brought out a strong influence of culture in organizational working. Linda Smircich (1985) brought out the direct link between the concepts of culture and organizational behavior. Pettigrew (1979) referred culture as a system publicly and collectively accepted meanings operating for a given group. Louis (1983) also came up with the idea of common understanding. Thus it is rational and logical to say that culture with its different dimensions has a significant influence on the organizations performance. Organizational culture is concerned with how employees perceive the characteristics of an organization's culture, not with whether or not they like them. That is, it is a descriptive term. It also represents a common perception held by the organization's member. Culture plays an important role in shaping any organization. It evolves with the business perspective, internally and externally.

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Schein (1985) proposed culture as a cumulative preference for some states of life over others (values), the predispositions concerning responses towards several significant issues and phenomenon (attitudes), organized way of filling time in relation to certain affairs (rituals), and ways of promoting desired behaviors and preventing undesirable ones (sanctions).

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The conception of organizational culture advanced by Schein (1985) also holds the notion of collective understandings culture has been defined as 'the pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to these problems'.

Schein further argues that to understand the content and dynamics of culture, one should know those aspects, which provide information about how basic assumptions arise and why they persist. He categorizes these aspects into two groups. These two aspects are:

1. External adaptation, and

2. Internal integration.

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Organizational culture is considered as an internal variable meaning that it is something that organization has. This perspective of culture has been taken by a number of researchers. It has been described as a set of assumptions (Schein, 1985), rituals and ceremonies (Deal and Kennedy, 1982), shared management practices (Hofstede, 1998) and shared values (O Reilly, 1991). Peters and Waterman (1982) argued that a strong culture distinguishes successful organizations from other organizations. They emphasized that any organization, in order to survive and achieve successes, must have a sound set of beliefs. If an organization is to meet the challenge of a challenging world, it must be prepared to change everything about itself except those beliefs as it moves through corporate life. They argued that the "Soft" is hard. Ouchi (1980) viewed that strong culture facilitates coordination and communication and these give strong-culture companies a competitive advantage over their competitors.

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Among these the theory propounded by Edgar Schein has been most influential in understanding organizational culture. Culture exists at three levels ranging from latent to manifest. At the latent level lies a core of beliefs and assumption, in middle the values and at the manifest levels are artifacts. Schein believes that the core of basic assumptions and belief is the essence of culture. This core guides the values and behavior norms, which the members recognize, respond to and maintain.

Pareek (1988) relied on the functionalist approach to study culture. Culture related concepts can be seen as multi level concepts. Values, beliefs attitudes and norms are inter-related. Pareek (1997) discussed the concept of ethos, as the underlying spirit of character or group and is made of its beliefs, customs or practices. At the base of ethos are core values i.e., "People need to give and get something from the occupation that goes beyond simply earning a salary".

A healthy organizational culture rests on eight strong pillars of "OCTAPACE" referring to Openness, Confrontation, Trust, Authenticity, Proactive, Autonomy, Collaboration and Empowerment and Experimentation. T. V. Rao introduced the concept of OCTAPAC culture as a good progressive way of building organizations. Udai Pareek and T.V. Rao pioneered the concept of HR Culture and propounded the OCTAPAC culture. An E for Empowerment and Experimentation was later added and it became OCTAPACE. In addition to being an acronym for these values, OCTAPACE is a meaningful term, indicating eight (octa) steps (pace) to create functional ETHOS. These values are discussed below.

Openness: The spontaneous expression of feelings and thoughts, giving the receiving feedback are the outcomes of openness.

Confrontation: It is defined as facing rather than shying away from problems. Deeper analysis of interpersonal problem is also confrontation.

Trust: It is defined as maintaining the confidentiality of information provided by others and not misusing it.

Authenticity: Congruence should be there in what one feels, says and does.

Proaction: It means taking the initiative, preplanning and taking preventive actions.

Autonomy: It means using and giving freedom to plan and act in one's own sphere.

Collaboration: Collaboration is giving help to others and asking for help, and working together.

Experimenting: This means using and encouraging innovative approaches to solve problems, encouraging creativity, and taking a fresh look at things.

Cultural Change-Ways and Means

Cultural change in an organization can be achieved through one or more of the following ways:

1. Changing people: Recruiting people of different profiles.

2. Changing people's position: Right people on right jobs.

3. Changing beliefs and attitudes: Encouraging mutual trust and co-operation.

4. Changing systems: Using information as a tool rather than power.

5. Changing structure: Empowering frontline managers to take decisions.

6. Changing the corporate image: To get internal and external positive attitude with focus on stake holder's interest.

Oil and Natural Gas Corporation Ltd.

ONGC is a blue chip and leading public sector Company in India and is engaged in E&P (Exploration and Production) activities in India and overseas. ONGC is the only fully-integrated petroleum company in India, operating along the entire hydrocarbon value chain. It is not only the largest E&P Company in India but also one of the most valuable companies. Moody's has assigned ONGC Baal-highest ever credit rating to any Indian corporate. It is highest ever profit company in India since last many years, it produces value added products like Naphtha from its own plants, which are available for export.

ONGC's success rate is at par with the global norm and is elevating its operations to the best-in-class level, with the modernization of its fleet of drilling rigs and related equipment. ONGC has adopted Best-in-class business practices for modernization, expansion and integration of all Info-com. Today, ONGC is the flagship company of India; and making this possible is a dedicated team of nearly 40,000 professionals who toil round the clock. It has a unique distinction of being a company with in-house service capabilities in all the activity areas of exploration and production of oil and gas and related oil field services. It is the only fully-integrated petroleum company in India, operating along the entire hydrocarbon value chain:

* Holds largest share (57.2 per cent) of hydrocarbon acreages in India.

* Contributes over eighty four percent of Indian's oil and gas production.

* Every sixth LPG cylinder comes from ONGC.

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Nature of Business: ONGC is engaged into the following businesses:

* E & P (Exploration and Production):--in India, Vietnam, Sudan, Sakhalin and Syria.

* LNG:-(Re-gasification).

* Refining.

* Retail Marketing.

Need of the Study

To comprehend the scenario of change, it is to be realized in the first place that the environmental contexts in which organizations exist are never static. Today, liberalization of the economy and the opening up of the Petroleum Sector has induced an unprecedented scale of dynamism in the economic environment of the country. In this fast changing environment, organizations as well as individuals are pro-actively to join in the game and then strive to extend their own spheres of influence for survival and sustained growth. This issue is of great significance for India's Oil Sector, which has to provide oil security, and thereby economic strength and resilience, to the country. On the other hand, in the new environment, this sector has to be globally competitive for achieving its rightful place amidst the global oil industry.

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To meet the challenges of the environment and extend the sphere of influence, for an organization it is not merely a question of its commercial orientation, though it is important. From a monopolistic position under a protected business regime, transition to a competitive market environment calls for a radical change in the management culture and processes and the whole architecture of the organization encompassing delegation of powers, planning and decision making processes, executive accountability, and business paradigm. For an enterprise it has to be a quantum leap in transformation from what it is today to a more responsive and innovative organization of tomorrow. And that ensures the extension of its sphere of influence with a competitive strength in the market place.

To be specific, when the Navaratna declaration had taken place, ONGC got the global recognition. Under the Navaratna guideline, organizational structural cum cultural change was required. To undertake such a change many steps have been undertaken which includes the coming up of OTP (Organizational Transformation Program) followed by the CRC (Corporate Rejuvenation Campaign). Therefore, to check how much cultural change has occurred so far in the company and how far it has to go OCTAPACE cultural study has been conducted.

Objectives of the Study

The study is carried out-

1. To assess the organizational ethos/ culture of ONGC on eight dimensions namely, OCTAPACE, and

2. To find out the reasons behind the deterioration of culture (if any).

Research Methodology

Research design used was Descriptive in nature. The OCTAPACE profile, a 40-item instrument giving the profile of organization's ethos on eight values was used for the study. Population of interest was the employees of ONGC (Delhi), which include both management and working staff. A total of four hundred employees was the population. Out of which a sample of one hundred employees was taken using Systematic sampling method. Every fourth element in the list was selected, which formed the part of sample. Sampling frame was the employee list provided by the company. Data has been collected from the employees and management using a standard questionnaire. The staff was divided into the three broad groups, i.e,

EI-E3--Jr. Management.

E4-E5--Middle management.

E6 & Above--Sr. Management.

Where EI, E2, E3 ... are the various executive levels. All the employees and management staff was included in these levels. Finally selection of respondents was done using Systematic Sampling method from these three different executives group.

The important statistical measures that we used to summarize the survey/ research data are: measures of central tendency or statistical average and measure of dispersion. In "OCTAPACE profile data" the mean value of scores of each variable out of eight variables has been calculated. Similarly the mean value of total scores of all eight variables, have been calculated. This provides overall OCTAPACE profile score of the organization.

Analysis and Interpretation

In case of OCTAPACE profile data, the answer sheet is suitably designed to tabulate the scores of eight OCTAPACE variables. The classification of scores in each OCTAPACE variable has been made with the available pattern of score. Lowest and highest score for each of the eight dimensions have been obtained from the responses. The classification of each variable is shown in table I below.

Table I: Classification of Octapace-Profile

OCTAPACE Dimension Lowest Score Highest Score

Openness 6 19
Confrontation 5 19
Trust 7 20
Authenticity 6 17
Proaction 5 20
Autonomy 7 16
Collaboration 5 18
experimentation 6 18

The mean value of score obtained from one hundred respondents on eight dimensions using the instrument have been compiled and presented in table II and chart I below.

Table II: OCTAPACE Profile Score

OCTAPACE - Dimensions Mean SD
 (N=100)

Openness 13.91 2.74
Confrontation 13.72 2.68
Trust 14.16 2.45
Authenticity 11.92 2.37
Proaction 14.10 2.81
Autonomy 12.43 2.08
Collaboration 13.71 2.44
Experimentation 13.15 2.27
Total =107.1

Chart 1: Mean Scores of OCTAPACE

openness 13.91
confrontation 13.72
trust 14.16
authenticity 11.92
proaction 14.1
autonomy 12.43
collaboration 13.71
experimentation 13.15

Note: Table made from bar graph.

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Pareek while conducting the cultural survey (1997) came up with the tentative norms, based on the values of mean and standard deviation obtained from their survey. The table III summarizes those norms. These norms indicate the lowest and highest mean value each dimension can take, i.e., range of each dimension.

Table III: Tentative Norms for the OCTAPACE-Profile

 Low High

1. Openness 13 17
2. Confrontation 10 16
3. Trust 10 16
4. Authenticity 10 14
5. Proaction 12 18
6. Autonomy 11 16
7. Collaboration 13 17
8. Experimentation 11 16
 Total = 90 =130

On comparing table II, which shows the mean value of eight dimensions obtained from the research, with the tentative norms given in table III above, we find that--

The scores of Confrontation, Trust, and Experimentation are much satisfactory as compare to the scores of other dimensions, as they lie in the medium to high range. The major problem areas that emerge out in this study are Openness and Collaboration, scores of these 2 dimensions are tending towards the lowest side. While the scores of rest of the dimensions namely Authenticity, Proaction and Autonomy was satisfactory/ average.

Level Wise OCT APACE-Score: Besides tabulating the overall OCTAPACE culture score for the company, a level-wise analysis has also been done to find out whether the picture/ pattern that exists at overall organization level is same as that exists at individual levels. For this all the employees and management staff was grouped in three broad levels:

EI-E3--Jr. Management. From this cadre a sample of 42 respondents was selected out of 168, using the same technique, i.e., Systematic Sampling.

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E4-E5- Middle Management. From this cadre also forty two respondents were selected out of one hundred sixty eight, using systematic sampling.

E6 & above- Sr. Management. Here a sample of sixteen respondents was taken out of sixty four.

The mean value of OCTAPACE profile in these three executive levels is summarized in the table IV. Although the analysis of overall OCTAPACE profile scores in three executive levels do not show much significant difference in the organizational ethos, as the total cultural scores at all the three levels is almost the same. However there are slight variations in the scores when analyzed at individual levels, which is summarized in chart II. As for example, variations are observed in the scores of Openness, Authenticity and experimentation. Openness is high in E6 and above level, Authenticity is low in the first two levels (EI-E3 & E4-E5) and Experimentation has come up to be highest in the first level (E1-E3).

Table IV: Comparative OCTAPACE Profile
of three Executive levels

 OCTAPCE- Overall E1-E3
 Dimension Mean Executive level

Openness 13.91 13.86
Confrontation 13.72 13.21
Trust 14.16 13.83
Authenticity 11.92 11.88
Proaction 14.10 13.81
Autonomy 12.43 12.38
Collaboration 13.71 13.48
Experimentation 13.15 13.17
 TOTAL =107.1 =105.62

 OCTAPCE- E4-E5 E6 & above
 Dimension Executive level Executive level

Openness 13.38 14.13
Confrontation 13.14 13.31
Trust 13.88 13.75
Authenticity 11.83 12.38
Proaction 13.93 13.5
Autonomy 12.21 12.56
Collaboration 13.50 13.56
Experimentation 12.93 12.88
 TOTAL =104.80 =106.07

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Overall Culture Score (A Comparative View): As per the tentative norms given by Pareek (1997), the overall culture score of an organization can range from a minimum of ninety to a maximum of one hundred thirty. In the present study, the overall OCTAPACE culture score for ONGC has come up to be 105.35. If we compare this score with the overall culture score that we have found for three different levels, not much difference is observed (table V & chart III).

Table V: Total OCTAPACE-Score

Levels Total Octapac
 Score

El -E3 105.62
E4 -E5 104.81
E6 & Above 106.06
All Levels 105.35

Chart III: Total OCTAPACE-Score

Total 105.35
E6 & above 106.06
E4-E5 104.81
E1-E3 105.62

Note: Table made from pie chart.

Findings

The present study provides the information on the prevailing organization culture. The comparison of results of this study with the standards given by Pareek provided useful insights. The study has provided useful inputs which management can use to restructure its corporate functions and build a strong culture. Following are the findings of the study--

1. The study of OCTAPACE culture, that constitutes the core values of organizational ethos have been found to be at the average level. As per the tentative standards given by Pareek, the overall organization's culture score can range from 90-130. In the present study, the overall culture score for ONGC has come out to be 105.35.

2. OCTAPACE study has revealed that, the scores of Confrontation, Trust and Experimentation are fairly good whereas there is lack of Openness and Collaboration among employees. Scores of other dimensions namely, Authenticity, Proaction & Autonomy have come up to be at satisfactory/ average level.

3. On analyzing the overall OCTAPACE culture score in the three executive level, not much difference have been observed, but slight variations have been observed while analyzing scores of individual dimensions--

* Openness is higher in E6 and above level as compared to the other levels.

* Authenticity is low at the first two levels, i.e., E1-E3 & E4-E5.

* Experimentation has come up to be highest in E1-E3 level.

4. Overall culture score has come up to be highest at E6 and above level, i.e., 106.7.

Implications of Findings

The high scores on the three dimensions, namely, Confrontation, Trust and Experimentation indicate that:

* Employees are facing the problems and challenges they confront in the work situation and not run away from it. They go deeper into the problems, analyze them and try to find the solution. They believe in finding a solution out and not just identifying the problem areas.

* Employees believe in helping and supporting each other. They like to help and provide moral support. They trust their seniors, subordinates and peers and rely on each other without any fear in time of crisis.

* Organization is taking active steps in encouraging their employees to take a fresh look at how things are done. They encourage employees to find out new and better means to do work. Employees believe in experimenting with their work and not just follow tried and tested ways. Organization is also taking initiative to change behavior of their employees by providing them constructive feedback, so that they can better gel with their work and organization.

The major problem areas that emerge out in this study are Openness and Collaboration, scores of these 2 dimensions are tending towards the lowest side. It indicates that:

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* Although from the above results we inferred that employees trust each other and do provide help when needed. But at the same time there is lack of openness among them. They do not freely discuss and communicate their problems and ask for help. During meetings or discussions, they do not come up with genuine information, feeling and thoughts, due which there exist a gap between actual feelings and perceived feeling/ behavior. Thus a culture of seeking help and support when the need arises may be developed.

* Employees do not like to work often in teams, as they feel working in a team dilutes individual accountability. They like to help, but do not accept and appreciate the help provided by others. Employees are more concerned with finishing the immediate task rather than focusing on large organizational goals. They also do not actively participate in formation of long run goals and missions; just restrict themselves to finish the work assigned to them. Thus more emphasis may be given on building teams in the organization and the top management may appreciate collaborative efforts.

While comparing level wise score for each dimension, variations have been observed in the scores of Openness, Authenticity and Experimentation.

* Openness has come up to be higher in E6 and above level as compared to other levels. This implies that employees at senior post are communicating and interacting freely while employees at lower level are unable to share their problems with each other.

* Authenticity is low in the first two levels, i.e., E1-E3 and E4-E5; this implies that employees at these levels do manipulations to get things done. They are not what they appear to be. They think that instead of telling truth it is good to tell a polite lie.

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* Experimentation has come up to be highest in E1-E3 level, which means that employees are trying new and innovative means to solve problems. They believe in taking fresh look at how things are done but these new ideas and ways are not valued much at superior level. This is due to the fact that promotions at junior level are time bound, while at upper level it is merit based. So employees at these levels hesitate to try out new ways, due to the risk attached.

Conclusion

Organization where the focus is on trust, collaboration and authenticity--the positive attributes-perform better and become more productive. Fighting and adjusting to the negative attributes require patience and a lot of energy is wasted to cope with negativity shown by employees. Culture, which is based on negativity breeds, negative energy and degenerates the organizational process. In the course of time it is reflected in the poor performance of the organizational members and ultimately of the organizations. Ethos that fosters honesty and trust, replenish member's energy, build collective strength and develop emotionally intelligent culture. Thus a positive workplace atmosphere deriving out of the unique culture is worth developing, as it becomes the foundation of true organizational success.

The unique high performing culture of any organization helps it to gain competitive advantage. Organizational Culture and strong ethos help a company achieving competitive advantage because the manner in which it contributes value to the organization's products or services is rare, hard to substitute for and difficult to imitate. A competitor cannot reverse the culture of the company at the same time it cannot imitate it. Organizational culture leads to organization capabilities. In a dynamic and changing environment culture's flexibility, adaptive ness and responsiveness create organizational capabilities. Organizational culture can play a vital role in the successful formulation of strategy.

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Ayesha Farooq

Lecturer, Department of Business

Administration, Aligarh Muslim

University.

Seep Sethi

Student, MBA (F), Department of

Business Administration, Aligarh,

Muslim University.