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Change Management in the organization

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Change Management in the organization

  3. 4. Introduction <ul><li>Dynamic World </li></ul><ul><li>Frequent changes </li></ul><ul><li>Human Efforts required </li></ul>
  4. 5. <ul><li>&quot; Change&quot; is: </li></ul><ul><li>to give a different position, course, or direction to </li></ul><ul><li>to make a shift from one to another </li></ul><ul><li>to undergo a modification of </li></ul><ul><li>to undergo transformation, transition or substitution </li></ul>
  5. 6. <ul><li>&quot;Manage&quot; is : </li></ul><ul><li>to handle or direct with a degree of skill or address </li></ul><ul><li>to exercise executive, administrative and supervisory direction of </li></ul>
  6. 7. CHANGE MANAGEMENT <ul><li>Change Management is a structured process that will cause proposed changes to be reviewed for technical and business readiness in a consistent manner that can be relaxed or tightened to adjust to business needs and experiences. </li></ul>
  7. 9. Managing change <ul><li>Understanding the potential effects of a change </li></ul><ul><li>Each possible reaction be anticipated and managed </li></ul>
  8. 10. Challenges of Changes <ul><li>Involves new procedures </li></ul><ul><li>Leadership - changing the running of an organization from a command and control nature of management to the nurturing and motivational nature of leadership. </li></ul><ul><li>Focus - making business choices to bring alignment and focus to the organization. </li></ul>
  9. 11. <ul><li>Commitment - creating commitment to the future of the enterprise throughout the organization. </li></ul><ul><li>Resistance- Resistance is a complex entity that directly affects the outcomes of change, both positively and negatively. </li></ul>
  11. 14. Digital Convergence
  12. 17. <ul><li>Challenging emotions should be greater than positive emotions. </li></ul><ul><li>Change only happens when each person makes a decision to implement the change. </li></ul><ul><li>Confidence of getting tough any where. </li></ul>Principles of Change
  13. 18. Twelve Principles of Change <ul><li>4. Truth&quot; is more important during periods of change and uncertainty than a’ good news’ </li></ul><ul><li>5. People who work are capable of doing much more than they are doing. </li></ul><ul><li>6. The intrinsic rewards of a project are often more important than the material rewards and recognition. </li></ul>Contd…
  14. 19. Contd … <ul><li>7. Don’t force change on anyone </li></ul><ul><li>8. The change process must be linked to business and performance goals </li></ul><ul><li>9. The change process involves both organizational and personal participation </li></ul>
  15. 20. Eight steps to successful change - John P. Kotter
  16. 21. <ul><li>Increase urgency - inspire people to move, make objectives real and relevant. </li></ul><ul><li>Build the guiding team - get the right people in place with the right emotional commitment, and the right mix of skills and levels. </li></ul><ul><li>Get the vision right - get the team to establish a simple vision and strategy, focus on emotional and creative aspects necessary to drive service and efficiency. </li></ul><ul><li>Communicate for buy-in - Involve as many people as possible, communicate the essentials, simply, and to appeal and respond to people's needs. De-clutter communications - make technology work for you rather than against. </li></ul>
  17. 22. <ul><li>Empower action - Remove obstacles, enable constructive feedback and lots of support from leaders - reward and recognise progress and achievements. </li></ul><ul><li>Create short-term wins - Set aims that are easy to achieve - in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones. </li></ul><ul><li>Don't let up - Foster and encourage determination and persistence - ongoing change - encourage ongoing progress reporting - highlight achieved and future milestones. </li></ul><ul><li>Make change stick - Reinforce the value of successful change via recruitment, promotion, new change leaders. Weave change into culture. </li></ul>
  19. 25. Industrial Credit and Investment Corporation of India
  20. 26. Background <ul><li>Since the mid 1980s- ICICI diversified into areas like merchant banking and retailing </li></ul><ul><li>In 1987- ICICI co-promoted India's first credit rating agency, Credit Rating and Information Services of India Limited (CRISIL), to rate debt obligations of Indian companies. </li></ul><ul><li>In 1988- promoted India's first venture capital company –to provide venture capital for indigenous technology oriented ventures </li></ul><ul><li>In the 1990s- diversified into different forms of asset financing like financing for non-project activities,etc </li></ul>
  21. 27. <ul><li>In 1991- ICICI and the UTI set up India's first screen-based securities market </li></ul><ul><li>In 1992- tied up with J P Morgan of the US to form an investment banking company </li></ul><ul><li>In 1990s-, took over ITC Classic, Anagram Finance and merged the Shipping Credit Investment Corporation of India (SCICI) with itself to develop retail business </li></ul><ul><li>ICICI also entered the insurance business with Prudential plc of UK. </li></ul><ul><li>ICICI known for its quick responsiveness to the changing circumstances </li></ul>
  22. 28. Objectives of ICICI Bank <ul><li>assist in creation, expansion and modernization of enterprises </li></ul><ul><li>encourage and promote the participation of private capital, both internal and external </li></ul><ul><li>take up the ownership of industrial investment </li></ul><ul><li>expand the investment markets. </li></ul>
  23. 29. Major Change In May 1996, K.V. Kamath replaced Narayan Vaghul, CEO of India's leading financial services company ICICI
  24. 31. <ul><li>Kamath identified the main problem as the company's ignorance regarding the nuances of lending practices in newly opened sectors like infrastructure. </li></ul><ul><li>The change program was initiated within the organization </li></ul><ul><li>Organization changed - from a development bank1 mode to that of a market-driven financial conglomerate. </li></ul>
  25. 32. <ul><li>Organization Divided In Groups </li></ul><ul><li>Infrastructure group (IIG) </li></ul><ul><li>Oil & gas group (O&G) </li></ul><ul><li>Planning and treasury department (PTD) </li></ul><ul><li>Structured products group (SPG) </li></ul>
  26. 33. Effects of change <ul><li>A majority of the work along with a lot of good talent shifted to the corporate center </li></ul><ul><li>An ex-employee remarked, &quot;The way to get noticed inside ICICI after 1996 has been to attach yourself to people who were heading these departments </li></ul><ul><li>These groups were seen as the thrust areas and if you worked in the zones it was difficult to be noticed </li></ul>
  27. 34. Change-resistance at ICICI Some of the people who thought did not fit in this set-up were quick to leave the organization.
  28. 35. Operations focus on customers <ul><li>ICICI set up three new departments, </li></ul><ul><li>1) Major client group (MCG) </li></ul><ul><li>A staff of about 30-40 people </li></ul><ul><li>Handled top 100 customers of ICICI </li></ul>
  29. 36. <ul><li>2) Growth client group (GCG) </li></ul><ul><li>A staff of about 60 people </li></ul><ul><li>Looked after the needs of mid-size companies </li></ul><ul><li>3) Personal finance group </li></ul>
  30. 37. Result of these changes <ul><li>Complaints against these changes put in continued and ICICI was blamed for not putting in adequate systems in place to develop the right people. </li></ul><ul><li>The feedback process - was also questioned </li></ul><ul><li>In many cases the appraisal scores were same but the bonus amount was not </li></ul>
  31. 38. Imparting New Skills to Existing Employees <ul><li>Training programmes and seminars were conducted </li></ul><ul><li>Overseas training programmes. </li></ul><ul><li>Introduced a two-year Graduates' Management Training Programme (GMTP) </li></ul>
  32. 39. ICICI also reviewed the compensation structure in place . <ul><li>Two types of remuneration were considered </li></ul><ul><li>A contract basis which would attract risk-takers. </li></ul><ul><li>A tenure-based compensation which would be appealing to employees who wanted security. </li></ul>
  33. 40. Results <ul><li>By 2000, ICICI had emerged as the second largest financial institution in India with assets worth Rs 582 billion. </li></ul><ul><li>The company had eight subsidiaries providing various financial services. </li></ul>
  34. 41. Five S Implementation.. <ul><li>Five S is one of the basic tenets of lean </li></ul><ul><li>Manufacturing. </li></ul><ul><li>It originated in Japan as a work-environment enhancing measure, but the Japanese believe this visually-oriented exercise is useful not just for improving the physical environment, but also for improving Total Quality Management (TQM) processes </li></ul>
  35. 42. Five S are…. <ul><li>seiri (sorting out) </li></ul><ul><li>seiton (systematic arrangement) </li></ul><ul><li>seiso (spic-n-span) </li></ul><ul><li>seiketsu (standardise) and </li></ul><ul><li>shitsuke (self-discipline) </li></ul>
  36. 43. <ul><li>In the first step (sorting out), individual owners sort their belongings into needs and wants. </li></ul><ul><li>This is followed by making a systematic layout of the workplace, specifying the storage areas and deciding where to put each item, right from files and documents down to the stapler and pins. </li></ul><ul><li>The third phase (spic-n-span) monitors whether the earlier steps (S1 and S 2). </li></ul><ul><li>Next is to standardise the policies and rules. </li></ul><ul><li>Finally, it is self-discipline that is required to sustain Five S </li></ul>
  37. 44. Outcomes.. <ul><li>Best advantage is that Five S could be easily followed by everybody from the &quot;peon to the president. </li></ul><ul><li>ICICI company claims to had saved Rs 7.5 crore. </li></ul><ul><li>Five S had contributed generously, making up 50 per cent of the savings. </li></ul><ul><li>The lower rung employees boast of tracing documents in record time just 30 seconds. </li></ul>
  38. 45. <ul><li>By 2000, it had half a million retail bank account holders. That number skyrocketed in the next few years; and it had 10 million retail bank account holders by 2004. </li></ul><ul><li>ICICI Bank claims to be the number one credit card company in the country with 2.5 million cards issued in less than five years. </li></ul><ul><li>Emptying out filing cabinets and drawers and retaining only what was absolutely essential due to which freed about 10 per cent storage space. </li></ul>
  39. 46. In December 2000, ICICI Bank was merged with Bank of Madura (BoM) ICICI Bank was nearly three times the size of BoM Staff Strength: ICICI - 1,400 BOM - 2,500 The working culture at ICICI and BoM were quite different
  40. 47. Bank Of Madura ( BOM ) Industrial Credit and Investment Corporation of India (ICICI) management concentrated on the overall profitability of the Bank management turned all its departments into individual profit centers and bonus for employees was given on the performance of individual profit center rather than profits of whole organization
  41. 48. CHANGE <ul><li>The company appointed consultants Hewitt Associates to help in working out a uniform compensation and work culture and to take care of any change management problems. </li></ul>
  42. 49. 'POST-MERGER' EMPLOYEE BEHAVIORAL PATTERN PERIOD EMPLOYEE BEHAVIOR Day 1 Denial, fear, no improvement After a month Sadness, slight improvement After a Year Acceptance, significant improvement After 2 Years Relief, liking, enjoyment, business development activities
  43. 50. MANAGING HR DURING THE ICICI-BoM MERGER <ul><li>Areas Of HR Integration Focussed On : </li></ul><ul><li>Employee communication </li></ul><ul><li>Cultural integration </li></ul><ul><li>Organization structuring </li></ul><ul><li>Performance management </li></ul><ul><li>Training </li></ul><ul><li>Employee relations </li></ul>
  44. 51. <ul><li>By June 2001, the process of integration between ICICI and BoM was started. </li></ul><ul><li>According to a news report, &quot;The win-win situation created by….HR initiatives have resulted in high level of morale among all sections of the employees from the erstwhile BoM.&quot; </li></ul>
  46. 53. NEED FOR CHANGE <ul><li>Indian economy opened to global competition </li></ul><ul><li>Godrej group was in a Quandary </li></ul><ul><li>No exposure to competition or new technology </li></ul><ul><li>Entered into two alliances </li></ul><ul><ul><li>P&G </li></ul></ul><ul><ul><li>GE </li></ul></ul>
  47. 54. NEED FOR CHANGE <ul><li>Entire distribution of Godrej transferred to P&G </li></ul><ul><li>1995-Break-up of the joint venture between Godrej & P&G </li></ul><ul><li>Post breakup Godrej devoid of distribution system </li></ul><ul><li>Rebuilding exercise </li></ul><ul><li>1995-TQM </li></ul>
  48. 55. CHANGE <ul><li>Switch from a family-run business to a professionally managed company </li></ul><ul><li>Changed the earlier model of management hierarchy </li></ul><ul><li>Adopted a participative management model </li></ul><ul><ul><li>team spirit </li></ul></ul><ul><ul><li>employee improvement programmes. </li></ul></ul>
  49. 56. <ul><li>&quot;Many Indian companies have increased their emphasis on training tremendously. I think it is absolutely essential to spend a lot of money on training and continuous improvement. In our group every employee has to undergo at least five days of training a year.&quot; </li></ul><ul><li>Adi Godrej, Chairman Godrej Group </li></ul>
  50. 57. TQM <ul><li>1995-TQM Awareness programmes conducted for all employees </li></ul><ul><li>Objective </li></ul><ul><li>Driving force </li></ul><ul><li>Maximize quality and minimize costs. </li></ul><ul><li>Total employee involvement, total waste elimination and total quality control </li></ul>
  51. 58. KAIZEN <ul><li>Japanese technique of continuous improvement </li></ul><ul><li>Increase in employee involvement and morale. </li></ul><ul><li>Significant savings </li></ul><ul><li>Flexible </li></ul>
  52. 59. 360-Degree Evaluation <ul><li>Assessment </li></ul><ul><li>Unbiased feedback to the employee </li></ul><ul><li>Self development </li></ul>
  53. 60. Economic Value Added Training (EVA) <ul><li>2001-Introduction of EVA </li></ul><ul><li>Extensive training program for managerial and officer levels </li></ul><ul><li>Training regarding decision making of investments and trade-offs between the income statement and the balance sheet. </li></ul><ul><li>Stern Stewart, New York based management consultancy </li></ul>
  54. 61. GALLOP- Godrej Accelerated Learning Leadership and Orientation Programme <ul><li>2002 -structured and organised induction-training programme </li></ul><ul><li>Objective –to nurture the new recruits into leaders and dynamic performers </li></ul><ul><li>The trainees were rotated in four departments other than their primary department including a compulsory sales stint. </li></ul><ul><li>Mandatory rotation helped the trainees to get a hands-on experience to understand the market </li></ul>
  55. 62. Spark - Train The Trainers <ul><li>2002-purpose was to equip the managers to become successful coaches </li></ul><ul><li>GIL, in association with a Delhi-based HR consultant, conducted several workshops to mould the managers into coaches </li></ul>
  56. 63. E-Gyan <ul><li>2002 -E-Gyan was the e-learning initiative </li></ul><ul><li>Transform traditional training methods of workshops and sharpen the intellect of the employees by self- learning initiatives </li></ul>
  57. 64. Structural changes within HR policies <ul><li>The HR divisions have suddenly become more buoyant & are looking forward to the participation of new joinees </li></ul><ul><li>Encouragement of more participation of new joinees in the decision making process. </li></ul><ul><li>‘ Bedhadak bolo’ </li></ul>
  58. 65. <ul><li>Switching from a family-run business to a professionally managed company, the management has once again embarked on a new exercise to change the outlook of the company. </li></ul><ul><li>Godrej changed its existing logo and came out with a new logo. </li></ul><ul><li>A completely new corporate campaign was designed to convey this new look to the outside world. </li></ul>
  59. 67. RESULT <ul><li>Awarded ‘The Best Employer 2007-08’ by global human resources management and outsourcing company, Hewitt Associates. </li></ul><ul><li>Following EVA implementation, operating performance has improved significantly </li></ul><ul><li>All the businesses improved their performance </li></ul>
  60. 68. Change, Diversification & Development in ITC
  61. 69. Spree of Diversification OLD BUSINESS FOCUSED ACTIVITY NEW BUSINESS FOCUSED ACTIVITY TOBACCO <ul><li>Farmer relationships </li></ul><ul><li>Brand Building </li></ul><ul><li>Marketing </li></ul><ul><li>Distribution </li></ul>FOODS <ul><li>Manufacturing expertise </li></ul><ul><li>Brand Building </li></ul><ul><li>Sourcing ,Distribution </li></ul><ul><li>Farmer relationships </li></ul>HOSPITALITY <ul><li>People management </li></ul><ul><li>Customer service </li></ul><ul><li>Brand Building </li></ul>INFOTECH <ul><li>Technology management </li></ul><ul><li>People management </li></ul><ul><li>Institutional marketing </li></ul>TRADING <ul><li>International marketing </li></ul><ul><li>Forex management </li></ul><ul><li>Sourcing </li></ul>RETAIL <ul><li>Brand Building </li></ul><ul><li>Distribution ,Markets </li></ul><ul><li>Customer service </li></ul><ul><li>Sourcing </li></ul>PAPER BOARD <ul><li>Institutional marketing </li></ul><ul><li>Manufacturing expertise </li></ul>INTERNATIONAL TRADING <ul><li>International markets </li></ul><ul><li>Farmer relationships </li></ul><ul><li>Technology management </li></ul><ul><li>Forex management </li></ul>PRINTING & PACKAGING <ul><li>Merchandizing </li></ul><ul><li>Institutional marketing </li></ul>GIFTS, GREETING CARDS AND ACCESSORIES <ul><li>Marketing </li></ul><ul><li>Distribution </li></ul><ul><li>Manufacturing expertise </li></ul><ul><li>Customer service </li></ul>
  62. 70. CONCLUSION
  63. 71. BIBLIOGRAPHY & WIBLIOGRAPHY <ul><li>www.google.com </li></ul><ul><li>www.imcrindia.com </li></ul><ul><li>www.wikipedia.com </li></ul><ul><li>www.change.godrej.com </li></ul><ul><li>BUSINESS WORLD , 2002 </li></ul><ul><li>Organisational Theory, Design, and Change </li></ul><ul><li>- BY Gareth Jones </li></ul>
  64. 72. e-banking

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