joint ventures & leadership by mr s mohan at hrrt organised by ispe & upes dehradun
TRANSCRIPT
Joint Ventures & Syndicate Leadership& Syndicate Leadership
8th Oil & Gas HR Round Table
27th August 2009
BPCL’s JVs :� Refineries : Numaligarh Refinery Ltd
Bharat Oman Refineries Ltd
� Pipelines : Petronet CCK Ltd
Petronet India Ltd
� Gas : Petronet LNG Ltd
Central UP Gas Ltd
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Maharashtra Natural Gas Ltd
Sabarmati Gas Ltd
Indraprastha Gas Ltd
� Airports : Bharat Stars Services Pvt Ltd
� Bunker fuel :Matrix Bharat Marine Services
� Biofuels : Bharat Renewable Energy Ltd
Ways for a Company to grow
�A company can grow and/or increase in scale, scope or capacity, through:
� Organic Growth (growth from within)
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� Organic Growth (growth from within)
� Strategic Alliance
� Joint Venture
� Merger/Acquisition
Strategic Alliances and Joint Ventures
�Strategic alliances and/or joint ventures
� Help increase a company’s scale, scope, and
capabilities,
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� Less risky than a merger/acquisition
� Enable industry consolidations
� Enable global partnerships of complementary skills
What is a Joint Venture?
�An “association” of two or more parties who:
� Contractually agree to contribute to a specific venture
� Usually limited to a specific task for a specific period of
time.
�A joint venture is a separate entity (incorporated or unincorporated) generally governed under partnership
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unincorporated) generally governed under partnership
�The JV parties can be individuals, partnerships or corporations that continue to operate independently from the other except for activities related to the Joint Venture.
Problems Inherent in a JV
�Each party is responsible for the actions of the JV and one another
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�The best JV agreement cannot insulate the JV and parties from all risks
Reasons for Conflict in Joint Ventures
�Lack of trust between partners
�Incompatible or hidden partner objectives
�Incompatible Personalities
�Divergent evolution of partner objectives
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�Cross-cultural clashes
�Clashing partner organizational cultures
�Lack of knowledge reciprocity between partners
Trustworthness exists when one partner will not exploit the
exchange vulnerabilities of another partner
Barney (1996)
Trust emerges because of the
TYPE DEFINITION ENFORCEMENT
Trust and the Joint Venture Relationship
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Weak Form Trust
Semi-Strong Form Trust
Strong Form Trust
Trust through governance
Trust emerges because of the
limited opportunities for
exploitation Penalties
Internal Incentives
Reputation
Contingent Claims Contracts
Equity JVs
Moral Commitment
Socialisation
Corporate Culture
None
Trust through values, norms
and standards of behaviour
Role of the Leadership
�Understanding partner objectives
�Working approaches towards alignment of objectives
�Effective Conflict resolution
�Transparent Governance and accountability mechanisms
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mechanisms
�Examining role of parent company’s corporate identity in the JV
�Identifying, developing and assigning staff with required skill bases to the JV
�Designing career paths/compensation packages for staff deputed to JVs
Syndicate Leadership :
�By definition : Syndicate Leadership means “Borrowing talent from different sources”
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�Identification of right talent for the right job
Key Competencies
1. Empathy
2. Entrepreneurial drive
3. Stake holder influencing
4. Net working
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5. Passion for action
6. Adaptive thinking
7. Team leadership
And finally…
“Some people see things the way they are and ask, “Why?”.
I see things that never were, and ask, “Why not?”
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- George Bernard Shaw
Willingness to consider perspectives & approaches other than one’s own = critical to JV success
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