Setting the Stage for OFB to Transform


Sanjeev Bhola awt, ndc

Organizational design and development is a concept which was conceived in 1950s by psychologist Kurt Lewin.  Government have taken initiatives to develop Indian Defence Industrial base and creating 7 new Defence Public Sectors (DPSUs). The design and development of the new DPSUs through OFB restructuring need to be delicately handled to overcome the weaknesses noticed in erstwhile setup.

The setting up of seven DPSUs out of the 41 production units of OFB is a historic move to bring efficiency in these defence manufacturing units having 100% equity owned by government. The move can not only improve the efficiency within these DPSUs but can act as catalysts to boost Indian Defence Industrial Base (DIB) in private and public sector.

MoD have presently selected temporary Board of Directors within OFB officers and set the ball rolling for corporatization. The foremost task for DDP will be to process for appointment of permanent Board of Directors at the earliest to implement strategies for financial turnaround and change in working culture at these newly created DPSUs. The foremost responsibility of DDP will be enablement for “Financial Viability” & to initiate “The Change Management” process by the Board of Directors of these DPSUs.

The financial operations and prudent decision making in money matters in these DPSUs will require in-depth professional knowledge and requisite experience in financial handling which if found deficit in the leaders selected for these DPSUs may derail the objectives of creating an efficiently run DPSUs and will sweep away the assets created over the period of time in the Ordnance Factories.

The existing Finance and Commercial Accounts of the OFB are managed by Financial Professionals in MOD i.e. IDAS officers in the establishment of PC of A (Fys) under CGDA. As rightly conceived, MoD have requested the IDAS officers posted at OFB to send the willingness on deputation basis for the Posts of Direct(Finance) to these DPSUs. However, only two out of seven posts for Director(Finance) in these DPSUs are filled by these financial professionals. This may be the indicator of the lack of confidence on the financial viabilities of these created identities by the financial professionals who are presently managing the accounts of OFB.


To avoid compounding the challenges in these organizations of financial viability in addition to the quality, timely delivery and the pricing, the implementation of the Cabinet Note has to be cautiously processed by DDP.  The task of selecting a professionally qualified Director Finance who can guide and make the organisation financially viable through implementation of financial tools is still not achieved in 5 out of 7 DPSUs created.  It will be prudent to fill the post of Dir(Finance) with financially qualified and experienced professionals at the earliest before the operations of these DPSUs are commenced and financial decisions taken.

Secondly, the team selected have to act as the Change Managers for the newly created DPSUs. The leaders for undertaking a Change Management should have a well-defined governance framework without which the change management efforts may fizzle away. Further for a successful change to happen, the top management have to be committed and the persons planning and implementing the processes need to be from within the organization to take responsibility and have increased accountability. Even when consultants can be hired for planning the change, the responsibility and accountability of the implementation cannot be left to persons not permanently absorbed within these DPSUs.

For the government to be assured of the requisite seriousness of the Board of Directors to operate and bring changes in working culture in these DPSUs, MoD may insist the selected CMD and Board of Directors to get absorbed in respective DPSUs or the new set of permanent Board of Directors can be selected before the board takes operational decisions having financial bearings.

Unfortunately, during the selection process neither the willingness of the applicants to get absorbed nor the preference of any DPSUs have been asked. Mere selection and posting of Board of Directors in DPSUs without the domain knowledge of respective cluster of factories and without the professional knowledge of Finance and HR functions in a corporate world may nullify the expectation of government and Indian Defence forces. Thus, to bring change in the newly carved DPSUs from erstwhile OFB in terms of delivery and cost of products the permanent set of Board members may be selected under well-defined service conditions before the date of operations of these DPSUs.

To see that new DPSUs grow and meet the users’ expectation, the management at the Board level and the production unit should be highly motivated and a smooth transition of management have to take place for these units to survive and lead the Defence Industrial Base in future. The present selection of Director (HR) within the government employees of OFB who have an experience of administration will lack the required experience and knowledge on personals matters of Public Sector to formulate the HR policies ab initio and find ways to motivate the government employees which may otherwise demotivate the employees en masse.

The growing unrest among the officers due to lack of clarity on future engagement may hamper the initiatives taken by the government towards organizational restructuring to meet the challenges of quality, cost and delivery to users. It will be for MoD to set a stage for harmonious and smooth transition of OFB production Units into 100% owned Government industrial setup and keep these financially viable and bring Change of working culture in these newly created DPSUs.

The author Mr. Sanjeev Bhola  is Master in weapon technology and an alumni of NDC. Have 30 years of experience in defence manufacturing and have global exposure of Defence Industries. The views expressed in this article are personal and researched based on the information available in open source

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