Creating High Performance Work Systems at Pakistan Tobacco Company (PTC)

Abstract

Pakistan Tobacco Company (PTC), the first multinational company to be established in Pakistan, has recently experienced a massive transformation in its fortune. Over a period of just 12 months, PTC has seen a terrific turnaround from a market share of 29.1 % in the first Quarter of 2000 and declining, to a market share of 43.5% for the first quarter of 2001 and increasing. Furthermore, after 7 years of losses, PTC earned Rs.354.7 million profit after tax in 2001 for the first time since 1994. An “amazing” turnaround. The story started when in mid 1990s the revenues of the company suddenly dropped to an alarming level. An independent survey conducted in 1997 by the National Management Consultant (NMC), revealed several problems such as lack of trust, poor communication, false egos, demoralized management, inconsistent policies, tendency to over control and bureaucratic and hierarchical barriers etc. It was time for a change and the PTC team realized that they were now involved in a fight for survival – the writing on the wall was clear - it was a case for now and never. The “losing” scenario called for the transformation of high sense of urgency. It called for innovative, bold and daring decisions. The answer was found in implementing High Performance Work Systems (HPWS) that created a winning corporate culture, reduced the cost base, and re-engineered business processes to world-class standards. The major turnaround in the company’s fortunes is the result of teamwork, dynamic leadership at all levels, open communication, empowerment, egalitarianism, knowledge development and a shared vision of success. One of the key impacts of the High Performance Work Systems at PTC has been a ‘Winning Corporate Culture’, which enables ordinary people to achieve extraordinary by performing willingly to the best of their abilities and make the company / people very focused on the business strategy.