Structural Transformation at ONGC
Since its inception, ONGC has been instrumental in transforming the country's limited upstream sector into a large viable playing field, with its activities spread throughout India and significantly in overseas territories.
The 1990s had begun on a grim note for ONGC. It took almost a decade for the Corporation to sort things out in most uncertain of times.
Among many problems, the Corporation was also suffering from the organisational atrophy. In order to survive ONGC sought help from Mc Kinsey.
Mc Kinsey's mandate was to evolve an organisational structure that was far more responsive to its business needs than that based on business groups. The ONGC system run by functional heads often meant delays exceeding a year in matters requiring urgent decisions on fields. Also, since responsibilities were shared at production platforms between different business groups, the system degenerated into wrangling over responsibilities. Similarly, group loyalties often took precedence over the requirements of tasks. But, most importantly, it was found that the performance evaluation criteria based on business group yardstick were completely at loggerheads with requirements on fields. Mc Kinsey recommended an asset based approach with clearly-defined responsibilities in its presentation titled ‘Organisation Transformation Project’
Though Mc Kinsey recommendations were broadly accepted, coordination issues concerning commonly-shared services needed to be sorted out.
Finally, the first control over all service personnel working with asset teams was vested in asset managers, on grounds that being responsible for the performance of their strategic business units they must rightfully exercise control over all personnel working with them. Even procurement powers were devolved. Finally, a new structure made up of 14 assets and 11 centralised services was rolled out.
Even though Mckinsey's recommendations were broadly accepted, what kind of issues concerning commonly shared services needed to be sorted out?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Coordination issues
Option (1) Controlling issues — Incorrect. The passage does mention control over service personnel, but that was part of the final solution, not the issue left to be sorted out.
Option (2) Planning issues — Incorrect. The passage does not speak of planning issues.
Option (3) Coordination issues — Correct. The passage says that “coordination issues concerning commonly-shared services needed to be sorted out”. Coordination is the process of linking the activities of different departments towards a common goal. Services shared by many asset teams need it most, so that each team gets them on time without clashes.
Option (4) Directing related issues — Incorrect. The passage does not speak of directing.
Note: The passage is the NCERT case study ‘Structural Transformation at ONGC’, which has been reproduced by NTA in the exam.
NCERT (2026-27 Edition): “Structural Transformation at ONGC … Mc Kinsey recommended an asset-based approach with clearly-defined responsibilities in its presentation titled ‘Organisation Transformation Project’” “Though Mc Kinsey recommendations were broadly accepted, coordination issues concerning commonly-shared services needed to be sorted out.” “Finally, the first control over all service personnel working with asset teams was vested in asset managers, on grounds that being responsible for the performance of their strategic business units they must rightfully exercise control over all personnel working with them. Even procurement powers were devolved. Finally, a new structure made up of 14 assets and 11 centralised services was rolled out .” |