The Grey Chronicles

2009.May.25

Cultural Performance Management Analysis, Part IV



This post, continued from the Cultural Performance Management Analysis, discusses the opposing pairs of cultural characteristics, Long-term vs. Short-term, in terms of GSPI’s corporate scenario. Based on an example as explained by Buytendijk (2008) and featured in Profit Magazine (2009), instead of two companies, the cultural performance management analysis below considers two cultures: Indian expats and Filipino workers.


D. Long-term vs. Short-term

In its Corporate Philosophy, NSC addressed a distinctive paragraph To our Country:

“To be a major instrument in the country’s development, primarily in terms of advancement of steel-making and steel-using technology, utilization of domestic raw materials, training and employment of local labor, supply of steel materials to major industrial users and improvement of the overall trade balance.”

It should also be recalled that to stir investor interest and ensure the growth of the iron and steel industry President Corazon Aquino enacted on 08 August 1991, Republic Act 7103, also known as the Iron and Steel Industry Act. The law has a keen eye on integration “that makes full and efficient use of the country’s human and natural resources taking into consideration its critical impact on employment, indigenous resources utilization, foreign exchange and balance of payments position.”

To boost further the development of the industry, President Fidel V. Ramos created the Presidential Iron and Steel Committee (PISC) challenging private business to take the lead in the integration program. Only three companies responded — the Jacinto Group, NSC and Philsteel Group. Of the three, only the Philsteel project, addressing the concerns of the midstream and downstream sectors of the industry, pushed through. The two others simply fizzled out mainly due to the huge amount of investments required to put up the projects (Jaurigue, 2006).

True to this philosophy, NSC’s outlook had always been in long-term. Starting 1983, it had three phases of five-year expansion programs [FYEP], two of which were successfully completed. The third FYEP envisioned a blast furnace, through backward integration. This dream for the company was still in the works even until the plant closed shop in November 1999, or officially June 2000!

When NSC was officially re-opened by India’s Ispat Group chairman Pramod Mittal on 03 February 2004, he enunciates a vision (The Philippine Star, February 1997):

“Our vision is not restricted just to get NSC operational. The real challenge lies in its growth, debottlenecking trapped capacities and challenging the limits of it’s mills up to two million tons per annum successfully, within the shortest schedule, unbundling the knowledge and latent talent of its employees.”

“In the next phase, Ispat Group has planned making NSC an integrated steel plant. We will execute the dream, that the founding members of this plant had when it was on the drawing board. Facilities like a blast furnace — supported by a sinter plant, coke ovens, power plant and oxygen plant — will take the existing capacity to over three million tons per annum.”

On the first year, big words were released by GSPI as well as big plans were published. The steel exports seemingly increased in percentages over each month. The momentum started to fizzle out on the second year. By the third year, monthly budgets were reviewed almost every week. Given its public nature, GSPI has a relatively short-term focus; new business strategies need to pay off within a fiscal year, or most often during the next month! Nothing is planned for five years ahead. The best example of a future plan was the untimely announcement of a blast furnace by 2009.

Later that blast furnace project was similarly out-of-sight. On 20 July 2008, news reports (see Domingo, 2008) began to surface that it too was uncertain as the Indian owners wanted some prerequisites such as mining rights in the Philippines, or what they called “enabling platform”. Oh, so much for the big words during the inauguration!


Notes:

Buytendijk, Frank (2008). Performance Leadership: The Next Practices to Motivate Your People, Align Stakeholders, and Lead Your Industry. New York: McGraw-Hill, 2008. back to text

Domingo, Ronnel (2008). GSPI&146;s $1.6-B plan still uncertain. Manila: Philippine Daily Inquirer, 20 July 2008. Online, accessed 04 March 2009. back to text

Jaurigue, Rolando A. (2006). Steel industry development: RP’s elusive dream. Manila: The Philippine Star 15 May 2006. back to text

Mehta, Monica (2009). Performance Leadership: A Q&A with Frank Buytendijk, Profit: The Executive’s Guide to Oracle Applications, 14:1. Skokie, IL: Oracle Publishing, February 2009. p. 32-33. back to text

The Philippine Star (1997). Rebirth of National Steel Corp. a landmark event. Online: The Philippine Star, 08 February 2004. back to text

Disclaimer: The posts on this site does not necessarily represent any organization’s positions, strategies or opinions; and unless otherwise expressly stated, are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Philippines License.

Advertisements

1 Comment »

  1. this is very nice & creative post on management and performance leadership

    Comment by Tania Lee — 2010.November.17 @ 06:25 | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: