North Electricity Board: A Case of Restructuring in the Indian Power Industry
Abstract
The State Government of one of the largest states of India restructured its financially unviable electric utility - North Electricity Board (NEB) - into three independent corporations and announced its plans for subsequent privatization of NEB. The State Government argued for initiation of restructuring and privatization as a move to attract capital investments for meeting the growing demand and make the entire operations financially viable. An 11-day strike by the employees, which occurred as a response to the initiation of this radical organizational change, was the largest ever in the last 25 years of Indian labor history. The employees united under one umbrella employees association and negotiated with the government. Despite nation-wide support for the employees and the wholehearted unification of the employees, the strike ended with the acceptance of trifurcation by their union leaders. The dynamics involved in the process of restructuring and the employees' strike highlight the political and economic motivations of the various stakeholders in this organizational change process. In view of this, the issue facing the organization, post-strike, is how to get out of this current unpleasant situation and move forward.
This case was prepared by Assistant Professor Anjula Gurtoo of the Indian Institute of Management-Lucknow as a basis for classroom discussion rather than to illustrate either effective or ineffective handling of an administrative or business situation.
