Asian Journal of Management Cases, Ahead of Print.
The case describes the journey of one of the most ambitious public sector undertakings, Heavy Engineering Corporation Limited (HECL), in the earlier unified state of Bihar, India. Despite being a leading manufacturer and supplier of capital equipment and experiencing growth in the initial years, the company incurred losses for over 17 consecutive years. In the year 2006–2007, the company briefly bounced back to profits, but those revival hopes faded within five years, leaving the company in dire need of an immediate strategic rethink and a complete overhaul. This case specifically focuses on the problems and challenges faced by the cash-strapped public sector enterprise, HECL. It addresses issues such as its negative net worth, the rising wage and incentive bills of its employees, declining product competitiveness at the global level and other persistent financial difficulties and bureaucratic hurdles that created inflexibilities in decision-making. The need for agile and lean management approaches that could increase overall organizational performance, efficiency and value deliverables was also explored.