Challanges That Face The Change Management Business Essay

Challanges That Face The Change Management Business EssayChange management is a incorporated and strategic approach to initiate and manage the inter convert process in the organization structure and culture as well as the single(a)s/teams behaviour and military strength towards the mixed bag transition in the field of the business processes, technology implementation or any other policies of an enterprise. Change management is approximately modifying or trans take a shiting organizations in order to maintain or improve their effectiveness.Change Management ModelsThere are several change management models that the enterprises follow while under fetching the change management process depending upon the ground realities and the organizational culture of the enterprise seeking the change processes. One of such models popularly known is described by washbasin Kotter, who has set out an eight-step strategy for change management. These are as to a lower place1. To establish a sense of urgency among the people in the organization.2. To bring to pass a guiding coalition which will steer the reformation with the correct focus and aim to achieve the desired outcome.3. To adopt a clear vision and final cause the strategy accordingly.4. To communicate the change in vision to the people of the organization in a clear fashion.5. To empower employees towards taking broad-based action to benefit the organization.6. To present short-term wins which in a whole would give the organization a long term winning result.7. To consolidate all the gains of different volumes and ultimately buzz off desired changes.8. To anchor new approaches in the culture and operation process of the organization.The above described model is designed keeping in focus on specific activities that will impact results. The benefits of using this model include evaluating employee resistance, admirer employees transition through the process, create employee specific action plans, and develop a ch ange management plan keeping all the employees of the organization in mind and involve them in the constitutional process.Case Study DetailsThe Change drawing cardIn May 1996, K.V. Kamath replaced Narayan Vaghul as CEO of Indias leading financial function company Industrial Credit and Investment Corporation of India (ICICI). Immediately after taking charge, Kamath felt and understood that the organization needs to go through a change to shift its focus from just being a edge to create a difference and stand tall and different from all other competitors to create a brand name in the economic structure of India as well in entire south east Asia and introduced massive changes in the organizational structure and the emphasis of the organization changed ICIC from just a breeding pious platitude mode to that of a market-driven financial conglomerate.The changes in like manner brought in a lot of confusion among the employees, with media reports frequently carrying quotes from disgru ntled ICICI employees. According to analysts, a large section of employees began touch sensation alienated. The discontentment among employees further increased, when Kamath formed specialist groups within ICICI like the structured run intos and infrastructure group.Doubts were soon set upd regarding whether Kamath had gone too fast too soon, and much importantly, whether he would be able to steer the employees and the organization through the changes he had initiated.BackgroundICICI was established by the governing of India in 1955 as a open limited company to promote industrial development in India. The major institutional shareholders were the Unit Trust of India (UTI), the Life amends Corporation of India (LIC) and the General Insurance Corporation of India (GIC) and its subsidiaries. The equity of the corporation was supplemented by borrowings from the Government of India, the World Bank, the Development Loan Fund (now merged with the Agency for International Development ), Kreditanstalt fur Wiederaufbau (an agency of the Government of Germany), the UK government and the Industrial Development Bank of India (IDBI).The basic objectives of the ICICI were to Assist in creation, expansion and modernization of enterprises Encourage and promote the participation of private capital, both inwrought and external Take up the ownership of industrial investment and Expand the investment markets.In 1992 ICICI tied up with J P Morgan of the US to form an investment banking company, ICICI Securities Limited. In line with its vision of becoming a universal bank, ICICI restructured its business based on the recommendations of consultants McKinsey Co in 1998. In the late 1990s, ICICI tough on building up its retail business through acquisitions and mergers. It took over ITC Classic, Anagram Finance and merged the Shipping Credit Investment Corporation of India (SCICI) with itself. ICICI overly entered the insurance business with Prudential plc of UK. ICICI was re ported to be one of the few Indian companies known for its quick responsiveness to the changing circumstances.While its development bank counterpart IDBI was reportedly not doing very well in late 2001, ICICI had major plans of expanding on the anvil. This was expected to bring with it further challenges as well as potential change management issues. However, the organization did not seem to much perturbed by this, considering that it had successfully managed to handle the employee unrest following Kamaths appointment.Change Challenges Part IICICI was a part of the club of 3 developmental finance institutions named ICICI, IDBI and IFCI, who were the sole providers of long-term funds to the Indian industry. When the requirement use to be large in volume, all three used to organize and raise the money for required funding and investment. However, the deregulation beginning in the early 1990s, allowed Indian corporate to raise long-term funds abroad, putting an end to the DFI monopoly . The government too stopped giving DFIs subsidized funds. Eventually in 1997, the practice of consortium lending by DFIs was phased out. It was amidst this newfound independent status that Kamath, who had been away from ICICI for eight years deeding abroad2, returned to the helm. At this point of time, ICICI had limited expertise, with its key activity being the disbursement of eight-year loans to spoiled clients like Reliance Industries and Telco through its nine zonal offices.The change program was initiated within the organization, the first move being the creation of the Infrastructure assembly (IIG), Oil Gas Group (OG), Planning and Treasury Department (PTD) and the Structured Products Group (SPG), as the lending practices were instead different for all of these different constituent of industries. Kamath picked up people from various departments, who he was told were good, for these groups. The approach towards creating these new skill sets, however, led to one unint c ease consequence.As these new groups took on the key tasks, a majority of the work, along with a lot of good talent, shifted to the corporate kernel. While the zonal offices continued to do the selfsame(prenominal) work disbursing loans to corporates in the same division their importance within the organization seemed to have diminished. An ex-employee remarked, The way to get noticed inside ICICI after 1996 has been to attach yourself to people who were heading these (IIG, PTD, SPG, OG) departments. These groups were seen as the thrust areas and if you worked in the zones it was difficult to be noticed. Refuting this, Kamath remarked, This may be said by people who did not make it and there will always be such people. about(prenominal) of the people who did not fit in this set-up were quick to leave the organization. However, this was just the beginning of change-resistance at ICICI.In the major client group, a staff of about 30-40 people handled the needs of the top 100 cu stomers of ICICI. On the other hand, about 60 people manned the growth client group, which looked after the needs of mid- size of it companies. Obviously, the large clients required to a greater extent diverse kinds of services. So working in mcg offered better exposure and bigger orders. The net effect was that the MCG executive ended up doing more business than the GCG executive. A center-level manager at ICICI commented, The bosses may call it handling growth clients but the GCG manager is actually chasing non-performing assets (NPA)4 and circuit card of Industrial and Financial Restructuring (BIFR)5 cases.Kamath was quick to deny this allegation as well, Just because somebody is within the MCG does not guarantee him success. And these assignments are not permanent. Todays MCG man could easily by tomorrows GCG person and vice-versa. Complaints against these changes put in continued and ICICI was blamed for not putting in adequate systems in place to develop the right people.T he manner, which ICICI recognized an individuals efforts the feedback process was also questioned. A manager remarked, Last year the bonuses varied from Rs 30,000 to Rs 250,000 depending on the action. In many cases the appraisal scores were same but the bonus amount was not. And we were not told why.While Kamaths comments in the media seemed to dismiss many of the employee complaints, ICICI was in fact, putting in place a host of measures to die this unrest. One of the first initiatives was regarding imparting new skills to existing employees. Training programmes and seminars were conducted for slightly 257 officers by external agencies, covering different areas. In addition, in-house training programmes were conducted in Pune and Mumbai. During 1995-96, around 35 officers were nominated for overseas training programmes organized by universities in the US and Europe. ICICI also introduced a two-year Graduates Management Training Programme (GMTP) for officers in the Junior Mana gement grades.Along with the training to the employees, management also took steps to set right the reward system. To avoid the negative impact of profit center approach, wherein storm to show profits might affect standards of integrity within an organization, management ensured that rewards were related to group performance and not individual performances. To reward individual star performers, the method of selecting a star performer was made transparent. This made it clear, that there would be closer relationship between performance and reward. However, it was reported that pressure on accountability triggered off some levels of anxiety within ICICI which resulted in a lot of stress in gay relationships.By 2000, ICICI had emerged as the help largest financial institution in India with assets worth Rs 582 billion. The company had eight subsidiaries providing various financial services and was present in almost all the areas of financial services medium and long term lending, inv estment and commercial banking, venture capital financing, consultancy and advisory services, debenture trusteeship and custodial services.Change Challenges Part IIICICI had to baptistry change resistance once again in December 2000, when ICICI Bank was merged with Bank of Madura (BOM). Though ICICI Bank was nearly three times the size of BOM, its staff strength was only 1,400 as against BOMs 2,500. Half of BOMs personnel were clerks and around 350 were subordinate staff. There were large differences in profiles, grades, designations and salaries of personnel in the two entities.It was also reported that there was uneasiness among the staff of BOM as they felt that ICICI would push up the productivity per employee, to match the levels of ICICI7. BOM employees feared that their positions would come in for a closer scrutiny. They were not sure whether the rural branches would continue or not as ICICIs business was largely urban-oriented. The apprehensions of the BOM employees seemed to be justified as the working culture at ICICI and BOM were quite different and the emphasis of the respective management was also different.TABLE IPOST-MERGER EMPLOYEE BEHAVIORAL PATTERNPERIODEMPLOYEE BEHAVIORDay 1Denial, fear, no emolumentAfter a monthSadness, slight utilityAfter a YearAcceptance, significant improvementAfter 2 YearsRelief, liking, enjoyment, business development activitiesBased on the above findings, ICICI established systems to take care of the employee resistance with action rather than words.The fear of the unknown was tackled with adept communication and the fear of unfitness to function was addressed by adequate training. The company also formulated a HR blue print to ensure smooth integration of the human resources. (Refer Table II).TABLE IIMANAGING HR DURING THE ICICI-BOM MERGERTHE HR BLUEPRINTAREAS OF HR INTEGRATION FOCUSSED ON A data base of the entire HR structure Road map of career Determining the blue print of HR moves Communication of milestones IT Integration People Integration -Business Integration. Employee communication pagan integration Organization structuring Recruitment Compensation Performance management Training Employee relationsICICI transferred around 450 BOM employees to ICICI Bank, while 300 ICICI employees were shifted to BOM branches. Promotion schemes for BOM employees were initiated and around 800 BOM officers were found to be eligible for the promotions. By the end of the year, ICICI seemed to have successfully handled the HR aspects of the BOM merger.Learnings From the Case Study1. Change IdentificationAwareness of necessity for organizational renewal created in the life cycle of company to preserve local competitive market and being capable to take global market in future.2. Goal mountainPositive consequences of change process were listed to make better sense about changes. This list components includinga) Better quality of services to clientb) Achieve much more incomec) Go ahead of rivalsd) Prepare and set modern standards in the banking and investing industrye) Better management for referred projects3. Current State EvaluationIn the ICICI there are some potentialities such as skills, knowledge, financial resources and human resources which are elements to support change process, but these were not utilized with management methods. In addition, considering skill of company and its target it was needed to engage some new specialties and also there was not any appendage for communication between employees.4. ImplementationIn a change process, the most important points to start up are those which have maximum problems, so in order to solve these problems some improvement projects were defined as belowa) Promotion of human resources Prepare and modify organization structure to modern matrix structure instead of hierarchy structure. take to the woods evaluation systems based on 360 degree evaluation. Employing centralized experts instead of outsourcing.b) Improving coordinatio n procedures by management information systems. In the Current State Evaluation constitute it was recognized that the most problematic thing is method of communication between different departments, so responsibility matrix and information flow diagram ready for design and build units. After that, by utilizing information systems to integrate activities in each unit, employees could simply share their needs or basic data and also managers could extract reports from reliable and integrated system.c) Managing projects by using project management standards and finally implementing enterprise project management. First of all project charter was created for each project, then responsibilities matrix applied, after it scheduling and checklists prepared for both phases design and construction. This led to control quality by filling out the checklists and clarify superintendence points through every process. According to defined information systems, all of the members of project team coul d use their own required information by online accessible project charter. Finally project book as a document which has characteristic of lessons learned prepared for projects.5. Oppose to Halted FactorsThe common problem which occurres during the implementing change process is resistance, so for an organization which wants to prevent problems it is extensively important to response to employees (internal customer). In order to oppose to negative factors and reduce resistance, below activities performeda) Interior design with suitable work environment ergonomicsb) Training self management, appropriate communications and teamwork to employees which lead to increase professional capability of personnelc) Arranging coordination meetings and clarify management strategies to middle managers and also to employeesd) Encouraging employees to cooperate in improvement projectse) Exactly making known for employees the whole processes in the field of their own6. Continues profit and Control6. Continues Improvement and ControlBy the above ask we know the actual performance of the change management process and what the process is capable of doing if it is operated according to established procedures. A system measurement of the performance is actually needed during the all steps of implementation change management in order to being capable to equalise achievements and the objectives. This helps leadership to manage change process with systematic well-timed feedbacks. Although the feedbacks might be positive or negative but in the negative cases some efforts will be used to understand what the mistake is. For instance in ICICI there were some evaluation forms which was must to be filled out by clients to modify or sleep with execution experiments and all of that will be used to improve processes of the project execution teamConclusionThe above study provides us with the conclusion that the actual performance of the change management process and what the process is capabl e of doing, if it is operated according to established procedures. A system measurement of the performance is actually needed during the all steps of implementation change management in order to being capable to compare achievements and the objectives. This helps leadership to manage change process with systematic well-timed feedbacks. Although the feedbacks might be positive or negative but in the negative cases some efforts will be used to understand what the mistake is. For instance in the ICICI there are some evaluation forms which must fill out by clients to modify or complete execution experiments and all of that will be used to improve processes of the project execution team.The purpose of this paper is to develop a method that will help companies recognize weak points in their change management process and improve it, to measure quantity of success in the change management process, a procedure which was defined in ICICI.ICICI had the well laid planning in effect. They first involved them in leading to predetermined quality and time, including client satisfaction, improving standards and diversifying in business requirements. The last criterias were employees satisfaction andcost reduction. With applying this procedure it helped them to recognize that how much of the objectives were achieved by implementing change management, so a questionnaire had been prepared to evaluate the results of implementing change management.QuestionsThe below listed questions refer to all phases of the change management process and require answers that are required to be answered for assessment.1. Client Satisfaction.2. Employees Satisfaction.3. Improving Working Standards.4. Information Systems.5. Cost decrease