Downsizing through technology management and outsourcing: a case study of a captive coal-mining organisation in India under globalisation

The organisation under discussion is a part of a Steel Company and consists of a group of captive underground coal mines required to produce coking coal, wash it in the coal washeries (benefitiation plants) and send the good quality clean coal to the steel plant for steel-making. The emergence of liberalisation in India has affected Indian industries and compelled them to think of ways to become more competitive. The very existence of this coking coal-mining division is at stake due to the availability of better quality imported coal at a cheaper price. Also, the demand for metallurgical-grade coking coal has reduced due to an improvement in coke-making technology, which does not require very high quality metallurgical-grade coking coal. In order to become competitive, the organisation has adopted the strategy of downsizing by technological upgradation and outsourcing the non-core activities. This paper uses System Dynamics Simulation methodology as a tool for structuring as well as evaluating the different alternative policies and scenarios for the future.