TERM PAPER OF ORGANIZATIONAL CHANGE AND DEVELOPMENT ON “CHANGE MANAGEMENT AT TATA MOTORS”
SUBMITTED TO: Ms. ANUMEHA SUBMITTED BY: ANCHAL DHAWAN MBA-LIT (IV-D) RT1804B33 Reg. no.: 10810204
The satisfaction and euphoria that accompany the successful completion of any task would be incompletes without the mention of people who made it possible, those consistent guidance and encouragement crowned my efforts with success. In the completion of my master degree first of all I am thankful to Department of Management for giving me the opportunity of researching on particular topic. I would also like to mention my thanks to Ms. ANUMEHA (Lecturer in LIM) who helped me for developing the concept of HUMAN RESOURCE which will help me to know about the issues in change management. I would also like to thanks my parents for encouraging and giving me full support.
Anchal Dhawan Masters in Business Administration Department of management
TABLE OF CONTENTS
Serial Number Acknowledgement 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Page no 2 4-10 11-12 12-18 18 19 20-21 22 23-24 24-29 29-30 30-32 33-35 36 37 38 39
Introduction To The Topic Introduction To The Company Changes at Tata Motors Need for the Change Relevance for the Change Change in Workforce & culture Role of Leadership in Change Management Barriers to Change Planning The Change at Tata Motors Employee Motivation to Accept the Change Evaluating The Change Process at Tata Motors OD Interventions and its Implementation Relevance of OD Intervention Conclusion & Strategies To manage Change Process Suggestions References
INTRODUCTION TO CHANGE MANAGEMENT
Change management is a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state. Change management (or change control) is the process during which the changes of a system are implemented in a controlled manner by following a pre-defined framework/model with, to some extent, reasonable modifications.
Change management is the process of developing a planned approach to change in an organization. Typically the objective is to maximize the collective benefits for all people involved in the change and minimize the risk of failure of implementing the change. The discipline of change management deals primarily with the human aspect of change, and is therefore related to pure and industrial psychology. In project management, change management refers to a project management process where changes to a project are formally introduced and approved. The field of change management grew from the recognition that organizations are composed of people. And the behaviors of people make up the outputs of an organization. Types of Organizational Change • • • • Strategic changes Technological changes Structural changes Changing the attitudes and behaviors of personnel
There are many models in understanding the transitioning of individuals through the phases of change management and strengthening organizational development initiative in both government and corporate sectors. They are 1. ADKAR Model 2. Unfreeze-Change-Refreeze 3. Kübler-Ross 4. Formula for Change 5. PCI (People Centered Implementation) Some of the Potential issues concerning the successful Change deployment process:
The House (Of Quality) Needs Foundations Underestimating the need for a support structure can be a big mistake in the process of deploying Lean or Six Sigma. It is important to first assess the gap between your current state and the future, desired state. This activity produces a list of things that need to change and, in addition, those that need to be positively reinforced. In the change process, this is not an either/or proposition. Both need to be done. As an example, if one has the fortune of having an army of talented Black Belts but a broken Champion support system, the program can fail in a heartbeat. Again, if both are present and yet, executive support is absent, then that can lead to disastrous results for a program as well. The role of a consultant is potentially huge in this case. The superior knowledge base can be helpful in foreseeing roadblocks and addressing them at the very outset. Speed Can Be An Illusion One common trait of all change initiatives is that they go through a series of necessary steps that have their own lead times. Failing to recognize this fact often leads to skipping essential activities that only create an illusion of speed and never produces desired results. Sustaining A Shared Vision Most executives do a good job of communicating a strong sense of urgency to effect change and move people out of their comfort zones. This often launches a flurry of activities in the right direction to start with. However, sustaining the quality and level of activities is a different ball game. For the abstraction that is called business, it requires more than organizational structure, incentives and job descriptions to have a multitude of people work in a concerted manner towards a common objective -- it requires a shared vision. It is one, in which everybody has a role to play, everybody clearly understands his or her role, and everyone knows "what is in it for me?"
Having a shared vision and communicating it well are essential in galvanizing a workforce to come together and stay together, during the process of change.. New Vision, Old Contraints Doing the same old thing and expecting different results is the definition of insanity. As much as new tools and a new roadmap empowers people to do things differently, systemic constraints -- be it organizational structure or reward system -- if not addressed adequately can seriously damage the credibility of the effort and make cynics out of employees. Actions to confront big roadblocks early in the deployment phase can do the magic of boosting morale and providing momentum to overcome psychological hurdles throughout the organization. Show Me The Money In all fairness to the shareholders, every initiative should aim at producing measurable economic benefit to a business. Care should be taken to ensure that there is correlation between the metrics used to monitor improvement efforts and the bottom line. This may warrant adjustments to the accounting procedures2 to enable the identification of reform opportunities, drive the right activities and calculate project benefits consistently. In many cases, gains are realized only after a series of project segments (like a step function). It is important in such cases to make sure that cost accounting doesn't disincentives the very activities that culminate into a breakthrough. Leaders Wanted More often than not, management is incentivised to minimize risk and preserve the status quo. Change on the other hand requires creation of a new state of business, which naturally requires leadership. A paralyzed decision making process (often the biggest impediment to change) is a symptom of having too many managers and not enough leaders3.
Great leaders transform cultures and stimulate breakthroughs. It is vital to have a good number of them on one's side as champions of the renewal process.
Tata Motors Limited is India's largest automobile company, with consolidated revenues of Rs.70,938.85 crores (USD 14 billion) in 2008-09. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the world's second largest bus manufacturer. The company's 24,000 employees are guided by the vision to be "best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics." Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India. Over 5.9 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company is establishing a new plant at Sanand (Gujarat). The company's dealership, sales, services and spare parts network comprises over 3500 touch points; Tata Motors also distributes and markets Fiat branded cars in India. Tata Motors, the first company from India's engineering sector to be listed in the New York Stock Exchange (September 2004), has also emerged as an international automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Today two-thirds of heavy commercial vehicle exports out of South Korea are from Tata Daewoo. In 2005, Tata
Motors acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and coach manufacturer, and subsequently the remaining stake in 2009. Hispano's presence is being expanded in other markets. In 2006, Tata Motors formed a joint venture with the Brazil-based Marcopolo, a global leader in body-building for buses and coaches to manufacture fully-built buses and coaches for India and select international markets. In 2006, Tata Motors entered into joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market the company's pickup vehicles in Thailand. In 2005, Tata Motors created a new segment by launching the Tata Ace, India's first indigenously developed mini-truck. In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the world have been looking forward to. The Tata Nano has been subsequently launched, as planned, in India in March 2009. A development, which signifies a first for the global automobile industry, the Nano brings the comfort and safety of a car within the reach of thousands of families. The standard version has been priced at Rs.100,000 (excluding VAT and transportation cost). Designed with a family in mind, it has a roomy passenger compartment with generous leg space and head room. It can comfortably seat four persons. Its mono-volume design will set a new benchmark among small cars. Its safety performance exceeds regulatory requirements in India. Its tailpipe emission performance too exceeds regulatory requirements. In terms of overall pollutants, it has a lower pollution level than two-wheelers being manufactured in India today. The lean design strategy has helped minimise weight, which helps maximise performance per unit of energy consumed and delivers high fuel efficiency. The high fuel efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint. In May 2009, Tata Motors introduced ushered in a new era in the Indian automobile industry, in keeping with its pioneering tradition, by unveiling its new range of world standard trucks called Prima. In their power, speed, carrying capacity, operating
economy and trims, they will introduce new benchmarks in India and match the best in the world in performance at a lower life-cycle cost. Tata Motors is equally focussed on environment-friendly technologies in emissions and alternative fuels. . It has developed electric and hybrid vehicles both for personal and public transportation. It has also been implementing several environment-friendly technologies conservation. in manufacturing processes, significantly enhancing resource
CHANGES AT TATA MOTORS
Tata Motors marks the biggest turnarounds in the history of Indian automobile manufacturing industry which happened in 2001. This success story of Tata Motors can be entirely attributed to the timely change adopted by the Tatas and the then M.D Ravi Kant who led the change. Today Tata Motors ranks as the world’s fifth-largest manufacturer of medium and heavy trucks—it has a 61 percent domestic market share in this segment—and has taken the number-two position for sales of passenger vehicles in the Indian market. It has also built a significant global presence, both through sales efforts in overseas markets (such as the former Soviet republics, the Middle East, South Africa, South Asia, and Turkey) and through acquisitions such as the takeover of Daewoo’s commercial-vehicle business in South Korea and the purchase of a 21 percent stake in the Spanish bus manufacturer Hispano Carrocera. Tata Motors was predominantly a manufacturer of commercial vehicles, and that is a very cyclical business. The commercial-vehicle market in India shrank by more than 40 percent, with massive consequences for both the top and, more particularly, the bottom lines of the company. The 5 billion rupee loss in 2001 was the first time something on this scale had happened in the company’s history, and it really shook everybody within the organization. They tried to understand what had gone wrong and wanted to create a path for the future to ensure that they never got into such a situation again. So in 2001 they
decided on a recovery strategy that had three distinct phases, each of which was intended to last for around two years—six years in all. Phase one was intended to stem the bleeding. Costs had to be reduced in a big way, and that was going to be a huge challenge for a company that was not only the market leader but had been used to operating in a seller’s market and employing a cost-plus approach to pricing. Phase two was to be about consolidating their position in India, and phase three was to involve going outside India and expanding our operations internationally. Phase 1: The key objectives were to move to a system of market pricing and to reduce their break-even point, both of which called for major reductions in costs—variable costs, fixed costs, and interest costs. They used many approaches to cost reduction, including bench-marking our rivals. For example, they took apart vehicles to see what they could do to modify the products and to lower costs. They went in for e-sourcing, and today they are the largest company doing e-sourcing in India and one of the leading ones in the automobile industry worldwide. In two and a half years, they reduced the break-even from nearly two-thirds of capacity utilization to around onethird, which meant that even if the market shrank by close to 60 percent, they would still be in the black. The whole organization really got together to ensure that the bleeding stopped. One of the major drivers of success at Tata Motors Ltd. (TML) was its ability to fully exploit information technology to drive business goals and reduce cost. The company was an early adopter of CAD and CAM systems. Phase 2: The concentration in phase one was indeed on cost reduction, but while this was going on they thought about taking action in areas that would have an impact during the other phases. For phase two, the concentration was on improving product quality and upgrading product features so as to make the products more competitive. They also started work on new products that would be required by the market after three to five years and strengthened the position in the marketplace by setting up a new salesplanning process, tightening credit norms, improving the liquidity and profitability of
the dealers, reorienting toward customer satisfaction, and extending the reach of the distribution network. For phase three, the concentration was on starting work on international markets by identifying key markets and segments and developing a comprehensive plan to improve our competitive position so as to get a respectable market share. They also started looking at opportunities for inorganic growth. Phase 3: In phase the concentration was on starting work on international markets by identifying key markets and segments and developing a comprehensive plan to improve Tata Motor’s competitive position so as to get a respectable market share. They also started looking at opportunities for inorganic growth. International diversification was such a key part of the transformation strategy. It was all part of first, reducing the impact of domestic cyclicity – cyclicity is present across the world but in different phases in different places - and, second, seeking new geographies for growth in the face of the limitations of the domestic market, especially in commercial vehicles, where we enjoy a very high market share of over 60 percent. Tata Motors wanted to leverage the market-leading products internationally.
Tata Nano, the new model introduced by Tata motors, hailed as "the people's car", is an amazingly cheap car. With a price tag of US$ 2500, Tata Nano is indeed an affordable middle class family car. Tata Nano is a dream comes true for an average Indian. His /her ideas about owning and driving a car will become a reality soon. An analysis of the new car seems necessary as it is bringing mobility to the masses in an efficient and economic manner.
Achieving the cost objective Tata has defied the conventional odds and sceptics in the industry through the innovation of the world's cheapest car. Tata Nano is a marvel of a product yet audaciously economical and mechanically simple. It is a breakthrough in frugal engineering where innovation is driven by cost savings and sheer ingenuity. Tata managed to reorient the basic tenets of efficiency and practicality to meet the cost target. Tata Nano's efficiency comes from including only those items that are necessary for basic transportation and eliminating the not so relevant ones i.e. having one part/component that can perform a task just as good as two parts/ components can do, thus resulting in cost savings, e.g. one windscreen wiper and one side mirror. Tata also refrains from including items that are not feasible due to monetary reasons. Radio, air conditioner (despite the sizzling heat in India), power steering are not included while the instrument panel consists of only a speedometer, odometer, and fuel gauge similar to that of the two-wheelers- basic, yet functional. In addition, Tata has come up with practical ways to reduce car weight and thereby trim down the overall cost. It uses comparatively small and light engine, a 623cc twocylinder petrol engine made of aluminium, unlike conventional engines which are made out of cast iron. The engine of Tata Nano is strategically placed at the back of
the car leaving the front section for luggage, that too with the capacity of a briefcase. This is the most significant element in bringing down the weight and the overall cost of the car. Other factors that contribute towards the weight reduction are the usage of hollow steering wheel shafts, plastic body panels and smaller tubeless tyres. As a result of these measures, Tata Nano weighs only about 590kg. Lesser weight and fewer parts mean less raw material and lower cost for Tata Nano. Safety in mind Besides having the right parts to meet the cost objective, Tata Nano has adequate features that exceed current regulatory requirements and meet minimum safety standards. It has a sheet-metal body with strong passenger compartment equipped with safety features such as crumple zones, intrusion-resistant doors, seat belts, strong seats and anchorages. The rear tailgate glass is fixed to the body and tubeless tyres enhance safety further.
Ownership cost It is quite obvious that Tata Nano is cheap to manufacture, but the question is, does owning and operating a Nano over a period of time yield significant savings and benefits? While the low-price tag of Nano looks attractive, it is important to look at certain other factors like the running cost of the car in the long run. Potential buyers need to consider the rising price of petrol. Petrol prices have breached the US$ 100 mark with no sign of abating as global demand skyrocketed. The influx of thousands of Tata Nano on Indian roads would elevate the demand for petrol and this might bring a new dimension to the continuous hike of petrol price in India, which still depends on the Middle East for oil. Petrol prices may reach a point where owners of Tata Nano could no longer afford to buy petrol to run it. If that is the case, Tata Nano owners may leave their cars behind and resort to riding two-wheelers. In such a scenario, Tata Nano's value proposition may no longer make an economic sense. The low cost of ownership model championed by Tata may not remain successful at times of surging energy prices. The would-be owners of Tata Nano have to consider the cost of replacement parts and service maintenance for the car during the period of ownership. Tata Nano is built
from scratch and most of the component parts are new and do not share platform with other models in the Tata family. As a result, it is difficult to assess the vehicle's reliability, durability and parts' longevity. These factors along with unavailability of the model have made it difficult to estimate the cost of ownership of Tata Nano and the frequency of service trips. The overall cost of parts and services of Tata Nano is likely to be at the range of similarly sized car like Maruti 800. The perception of frequent parts breakdown and shorter service interval due to sub-standard parts and inferior materials on budget cars may not hold true for Tata Nano. Tata Nano's component parts are developed and manufactured by reputable component manufacturers like Bosch, Rico Auto, Lumax Group, Rane Group, Asahi Glass etc. Moreover, the cost of parts and services is likely to decline as more Tata Nano cars are driven on the road. Nano overseas The rise in petrol prices makes consumers around the world to look for a low cost car. Tata seems to capture this trend and is looking forward to introduce Tata Nano beyond Indian shores. One of the countries where Tata Nano is likely to make inroads is Thailand, dubbed as the 'Detroit of Asia', due to its extensive vehicle manufacturing activities in ASEAN region. Thailand has introduced the 'Eco-Car' project, a framework laid by the government to build green cars that are fuel efficient and cost effective. Vehicle manufacturers all over the world are invited to submit plans for the Eco-car investment project in Thailand. Various incentives have been provided for manufacturers of green cars in Thailand, including exemption from corporate tax for up to eight years and duty exemption for imported machinery. However, the investment should yield an output of 100,000 units by the fifth year of production. Such initiative bodes well for Tata Nano. Tata is one of the seven manufacturers that have submitted applications for the Eco-Car project and its application has already been approved. Tata might use this plan to export to other ASEAN countries through the ASEAN free trade area agreement (AFTA).
TATA MOTORS’ BIG PLANS
Tata Motors has decided to make some strategic changes. The first and foremost is that it is entering into the combat vehicle manufacturing business. The other is that the company is planning to sell some of its stake from its vehicle sales division. The auto company is now going to make combat vehicles which are mine protected. MD Tata Motors (Indian Operations) PM Telang informed that the aim of Tata Motors was to be present in every level of defense sector's value chain. It is going to do this by consolidating its traditional supply chains and entering into higher level of equipment manufacturing. Tata Motors will be looking forward to form partnerships. The company already has its presence in defense sector ever since 1985. Meanwhile, it is also eager to sell some stake in Tata Motors Finance Ltd. While no partner has been finalized till now, latest developments suggest that SBI my go ahead and buy stake. India's largest bank wants to have a unit for giving loans to trucks and buses and this requirement can be fulfilled by having a share in TMFL.
NEED FOR THE CHANGE AT TATA MOTORS
Change should not be done for the sake of change -- it's a strategy to accomplish some overall goal. Usually organizational change is provoked by some major outside driving force, e.g., substantial cuts in funding, address major new markets/clients, need for dramatic increases in productivity/services, etc. Typically, organizations must undertake organization-wide change to evolve to a different level in their life cycle, e.g., going from a highly reactive, entrepreneurial organization to more stable and planned development. Transition to a new chief executive can provoke organization-wide change when his or her new and unique personality pervades the entire organization.
RELEVANCE OF THE MODELS OF CHANGE
Kurt Lewin theorized that there are three stages to change: Unfreezing Old ideals and processes must be tossed aside so that new ones may be learned. Often, getting rid of the old processes is just as difficult as learning new ones due to the power of habits. Just as a teacher erases the old lessons off the chalkboard before beginning a new lesson, so must a leader help to clear out the old practices before beginning the new. During this part of the process you need to provide just a little bit of coaching as they are unlearning not learning and a lot of cheerleading (emotional support) to break the old habits.
Changing The steps to the new ideals are learned by practicing: What I hear, I forget. What I see, I remember. What I do, I understand. Although there will be confusion, overload and despair, there will also be hope, discovery, and excitement. This period requires a lot of coaching as they are learning and just a little bit of cheerleading due to the affect of Arousal Overloading. Refreezing The new processes are now intellectually and emotionally accepted. What has been learned is now actually being practiced on the job. Just a little bit of coaching is required and a lot of cheerleading is used to set up the next change process. . . remember it is c o n t i n u o u s process improvement!
CHANGE IN WORKFORCE AND CULTURE
Formulation of a clear strategic vision: In order to make a cultural change effective a clear vision of the firm’s new strategy, shared values and behaviours is needed. This vision provides the intention and direction for the culture change
Display Top-management commitment: It is very important to keep in mind that culture change must be managed from the top of the organization, as willingness to change of the senior management is an important indicator (Cummings & Worley, 2005, page 490). The top of the organization should be very much in favour of the change in order to actually implement the change in the rest of the organization. De Caluwé & Vermaak (2004, p 9) provide a framework with five different ways of thinking about change.
Model culture change at the highest level: In order to show that the management team is in favour of the change, the change has to be notable at first at this level. The behaviour of the management needs to symbolize the kinds of values and behaviours that should be realized in the rest of the company. It is important that the management shows the strengths of the current culture as well, it must be made clear that the current organizational does not need radical changes, but just a few adjustments.
Modify the organization to support organizational change: The fourth step is to modify the organization to support organizational change. Select and socialize newcomers and terminate deviants: A way to implement a culture is to connect it to organizational membership, people can be selected and terminate in terms of their fit with the new culture.
Develop ethical and legal sensitivity: Changes in culture can lead to tensions between organizational and individual interests, which can result in ethical and legal problems for practitioners. This is particularly relevant for changes in employee integrity, control, equitable treatment and job security.
Change of culture in the organizations is very important and inevitable. Culture innovations is bound to be because it entails introducing something new and substantially different from what prevails in existing cultures. Cultural innovation is bound to be more difficult than cultural maintenance. People often resist changes hence it is the duty of the management to convince people that likely gain will outweigh the losses. Besides institutionalization, deification is another process that
tends to occur in strongly developed organizational cultures. The organization itself may come to be regarded as precious in itself, as a source of pride, and in some sense unique. Organizational members begin to feel a strong bond with it that transcends material returns given by the organization, and they begin to identify with in. The organization turns into a sort of clan.
ROLE OF LEADERSHIP IN CHANGE MANAGEMENT
To be an effective leader of an organization requires you to do five things: • • • • Understand and interpret the environment in which he operate Develop winning strategies Execute them brilliantly; Measure the impact of your strategies followers. If you get results, people will support you, systematically, adjusting strategies as often without caring too much about how you got indicated. • Develop organizational, departmental; the world won't retain the support of your followers’ team and personal capabilities.
BARRIERS TO CHANGE
The three greatest barriers to organizational change are most often the following. 1. Inadequate Culture-shift Planning. Most companies are good at planning changes in reporting structure, work area placement, job responsibilities, and administrative structure. Organizational charts are commonly revised again and again. Timelines are established, benchmarks are set, transition teams are appointed, etc. Failure to foresee and plan for resultant cultural change, however, is also common. When the planning team is too narrowly defined or too focused on objective analysis and critical thinking, it becomes too easy to lose sight of the fact that the planned change will affect people. Even at work, people make many decisions on the basis of feelings and intuition. When the feelings of employees are overlooked, the result is often deep resentment because some unrecognized taboo or tradition has not been duly respected. 2. Lack of Employee Involvement. People have an inherent fear of change. In most strategic organizational change, at least some employees will be asked to assume different responsibilities or focus on different aspects of their knowledge or skill. The greater the change a person is asked to make, the more pervasive that person's fear will be. There will be fear of change. More important, however, there will be fear of failure in the new role. Involving employees as soon as possible in the change effort, letting them create as much of the change as is possible and practical is key to a successful change effort. As employees understand the reasons for the change and have an opportunity to "try the change on for size" they more readily accept and support the change. 3. Flawed Communication Strategies. Ideal communication strategies in situations of significant organizational change must attend to the message, the method of delivery, the timing, and the importance of information shared with various parts of the organization. Many leaders believe that if they tell people what they (the leaders) feel they need to know about the change, then everyone will be on board and ready to move forward. In reality, people need to understand why the change is being made,
but more importantly, how the change is likely to affect them. A big picture announcement from the CEO does little to help people understand and accept change. People want to hear about change from their direct supervisor. A strategy of engaging direct supervision and allowing them to manage the communication process is the key to a successful change communication plan.
PLANNING THE CHANGE AT TATA MOTORS
Tata Motors look at his eight steps for leading change below. Step One: Create Urgency For change to happen, it helps if the whole company really wants it. Develop a sense of urgency around the need for change. This may help you spark the initial motivation to get things moving. This isn't simply a matter of showing people poor sales statistics or talking about increased competition. Open an honest and convincing dialogue about what's happening in the marketplace and with your competition. If many people start talking about the change you propose, the urgency can build and feed on itself. What to do is:
Identify potential threats, and develop scenarios showing what could happen in the future. Examine opportunities that should be, or could be, exploited. Start honest discussions, and give dynamic and convincing reasons to get people talking and thinking. Request support from customers, outside stakeholders and industry people to strengthen your argument.
Step Two: Form a Powerful Coalition
Convince people that change is necessary. This often takes strong leadership and visible support from key people within your organization. Managing change isn't enough - one has to lead it. It can find effective change leaders throughout an organization - they don't necessarily follow the traditional company hierarchy. To lead change, one need to bring together a coalition, or team, of influential people whose power comes from a variety of sources, including job title, status, expertise, and political importance. Once formed, “change coalition" needs to work as a team, continuing to build urgency and momentum around the need for change. What to do is:
• • • •
Identify the true leaders in your organization. Ask for an emotional commitment from these key people. Work on team building within your change coalition. Check your team for weak areas, and ensure that you have a good mix of people from different departments and different levels within your company.
Step Three: Create a Vision for Change When we first start thinking about change, there will probably be many great ideas and solutions floating around. Link these concepts to an overall vision that people can grasp easily and remember. A clear vision can help everyone understand why you're asking them to do something. When people see for themselves what you're trying to achieve, then the directives they're given tend to make more sense. What to do is:
Determine the values that are central to the change. Develop a short summary (one or two sentences) that captures what you "see" as the future of your organization. Create a strategy to execute that vision.
Ensure that your change coalition can describe the vision in five minutes or less. Practice your "vision speech" often.
Step Four: Communicate the Vision What you do with your vision after you create it will determine your success. Your message will probably have strong competition from other day-to-day communications within the company, so you need to communicate it frequently and powerfully, and embed it within everything that you do. Don't just call special meetings to communicate your vision. Instead, talk about it every chance you get. Use the vision daily to make decisions and solve problems. When you keep it fresh on everyone's minds, they'll remember it and respond to it. It's also important to "walk the talk." What you do is far more important - and believable - than what you say. Demonstrate the kind of behaviour that you want from others. What to do is:
• • •
Talk often about your change vision. Openly and honestly address peoples' concerns and anxieties. Apply your vision to all aspects of operations - from training to performance reviews. Tie everything back to the vision. Lead by example.
Step Five: Remove Obstacles If we follow these steps and reach this point in the change process, we've been talking about our vision and building buy-in from all levels of the organization. Hopefully, our staffs want to get busy and achieve the benefits that you've been promoting. Put in place the structure for change, and continually check for barriers to it. Removing obstacles can empower the people you need to execute your vision, and it can help the change move forward.
What to do is:
Identify, or hire, change leaders whose main roles are to deliver the change. Look at your organizational structure, job descriptions, and performance and compensation systems to ensure they're in line with your vision. Recognize and reward people for making change happen. Identify people who are resisting the change, and help them see what's needed. Take action to quickly remove barriers (human or otherwise).
Step Six: Create Short-term Wins Nothing motivates more than success. Give a company a taste of victory early in the change process. Within a short time frame (this could be a month or a year, depending on the type of change), one want to have results that your staff can see. Without this, critics and negative thinkers might hurt your progress. Create short-term targets - not just one long-term goal. You want each smaller target to be achievable, with little room for failure. Your change team may have to work very hard to come up with these targets, but each "win" that you produce can further motivate the entire staff. What to do is:
Look for sure-fire projects that you can implement without help from any strong critics of the change. Don't choose early targets that are expensive. You want to be able to justify the investment in each project. Thoroughly analyze the potential pros and cons of your targets. If you don't succeed with an early goal, it can hurt your entire change initiative. Reward the people who help you meet the targets.
Step Seven: Build on the Change
Change projects fail because victory is declared too early. Real change runs deep. Quick wins are only the beginning of what needs to be done to achieve long-term change. Launching one new product using a new system is great. But if you can launch 10 products, that means the new system is working. To reach that 10th success, you need to keep looking for improvements. Each success provides an opportunity to build on what went right and identify what you can improve. What to do is:
• • • •
After every win, analyse what went right and what needs improving. Set goals to continue building on the momentum you've achieved. Learn about kaizen, the idea of continuous improvement. Keep ideas fresh by bringing in new change agents and leaders for your change coalition.
Step Eight: Anchor the Changes in Corporate Culture Finally, to make any change stick, it should become part of the core of your organization. Your corporate culture often determines what gets done, so the values behind your vision must show in day-to-day work. Make continuous efforts to ensure that the change is seen in every aspect of your organization. This will help give that change a solid place in your organization's culture. It's also important that your company's leaders continue to support the change. This includes existing staff and new leaders who are brought in. If you lose the support of these people, you might end up back where you started. What to do is:
Talk about progress every chance you get. Tell success stories about the change process, and repeat other stories that you hear.
Include the change ideals and values when hiring and training new staff. Publicly recognize key members of your original change coalition, and make sure the rest of the staff - new and old - remembers their contributions. Create plans to replace key leaders of change as they move on. This will help ensure that their legacy is not lost or forgotten.
EMPLOYEES MOTIVATION TO ACCEPT THE CHANGE
The employee motivation during change implies a tactical "quick fix" approach. Whereas to achieve a peak performance from your people and in so doing, to create a genuine source of competitive advantage demands a strategic approach that embraces leadership style, corporate cultures and the supporting business and management processes. At root this is all about the emotional dimension - specifically the emotional commitment of your employees and achieving an alignment and maintaining the balance between corporate performance and individual employee fulfilment. In practise this means establishing what is important to your people, communicating to them what is important to you and the organisation, and finding ways of meeting both their and your goals. This is what lies at the heart of employee motivation techniques. There are 4 techniques to be taken care of for motivating employees in change management: 1. Clarity in all areas- especially of the business needs for the change, of the specifics of the change, the benefits of the change, and most importantly the impacts of the change. Also, at an individual level ensuring that people know precisely what is expected of them - i.e. you translate the vision into actionable steps.
2. Communication – constant communication; two-way communication; communication that explains clearly what is happening or not happening and why, that listens actively and demonstrates to people that you have thought through the impacts of the change on them, and that you are prepared to work with them to achieve their buy-in and commitment to the change. 3. Consistency - in all aspects of the way in which you lead the change, manage the delivery, handle the communication, and ensure the realisation of the benefits. 4. Capability - constant attention to the management of the projects and initiatives that are delivering the capabilities into your organisation that will deliver the benefits.
EVALUATING THE CHANGE PROCESS AT TATA MOTORS
Evaluating the organizational change in culture, Tata Motors follow different approaches such as, analysing the fundamental assumptions, investigating the cultural gaps and managerial behaviour in the organization. There are different models provided for investigating and analyzing the organizational culture. But in our researches we applied the “Denison” model. This model is one of the most comprehensive models that divide the organizational culture into four parts based on two axels (degree of focus and degree of stability) On the basis of organizational concentration It is possible to divide this model into two parts by horizontal dissection. Cooperation and compatibility pay attention to organization internal dynamism, but they don’t care about their relations with external environment. Yet adaptability and mission consider organization’s connection with the external environment. It is also possible to divide the model into two parts by vertical dissection. Involvement and partnership enforce on organization’s capacity for flexibility and change, although compatibility and mission enforce on stability and
having a specific path. Regarding to researches these four cultural characteristics have a positive influence on organization performance. Characteristics have its own specifications that will be described below: Adaptability: making the demand of market practical is called adaptability. Belief and norm systems of the organization perform the related behavioral changes by supporting organization’s opportunities and it will increase the organization’s chance for survival, development and expansion with the help of perception, explanation and rendition of environmental signals, and. There are three aspects of adaptability considered in Denison model which affect the organization’s effectiveness. The First aspect is called the ability of realization and reacting to the external environment. Nowadays successful organizations are the ones which has a special emphasis on their customers and competitor’s behaviors. Second aspect is the ability to reacting to internal events without considering level, department, function and output. And the third aspect is the capacity and ability to organize and reengineer processes and behavioral structures which help the organization to adapt with new conditions. Without this ability the organization will miss its effectiveness. The standards for adaptability are: • • • Making the changes, Customer focus, Organizational learning.
Constancy: defines the values and systems which form a strong culture. Constancy provides a central force for organizational solidarity and harmony. Organizations provide constancy by developing a set of organizational systems that establishes an internal management system on the basis of bilateral support of employees and employers. These organizations have committed employees, core values, different ways to perform business, tendency for promotion and an obvious set of rules that determine things musts and mustn’t. Constancy creates a powerful organizational culture based on joint beliefs, values and symbols which are reasonable and perceivable for the employees. Internal control systems that are based on
organization’s values are more effective tools in order to reach integrity and coordination than external control systems that are on the basis of rules. Standards for this cultural characteristic are: • • • Integrity and coordination Core values Agreement.
Involvement: what we mean by involvement is to increase responsibility in employees. According to organizational culture when employees are highly attached to their work, they are encouraged to involve in performance and have responsibilities. These organizations have informal, volunteer controls instead of formal, obvious ones. Responsibility causes commitment and independency in employees and improves employees’ decisions quality. Standards of involvement are: • • • Empowerment Capability development Team orientation
Mission: defines a long term direction for the organization. Mission distinguishes goals of the organization with defining social role and external objectives of the organization. With the help of the direction and these distinct goals, mission specifies the activities that should be performed by the employees. Considering the position where organization is planned to reach, activities and strategies will be identified. Probability of organization’s success will be increased by converging employees and the organization. Standards of this section are: • • • Strategic direction and intent Goals and objectives Vision
OD INTERVENTIONS & ITS IMPLEMENTATION
Organization Development (OD) interventions techniques are the methods created by OD professionals and others. Single organization or consultant cannot use all the interventions. They use these interventions depending upon the need or requirement. The most important interventions are: • • • • • • • Survey feedback.
Process Consultation. Sensitivity Training. The Managerial grid. Goal setting and Planning. Team Building and management by objectives. Job enrichment, changes in organizational structure and participative management and Quality circles, ISO, TQM. Survey feedback: The intervention provides data and information to the managers. Information on Attitudes of employees about wage level, and structure, hours of work, working conditions and relations are collected and the results are supplied to the top executive teams. They analyse the data, find out the problem, evaluate the results and develop the means to correct the problems identified. The team are formed with the employees at all levels in the organization hierarchy i.e, from the rank and file to the top level. Process Consultation: The process consultant meets the members of the department and work teams observes their interaction, problem identification skills, solving procedures etc. He feeds back the team either the information collected through observations, coaches and counsels individuals & groups in
moulding their behaviour.
Goal setting and planning: Each division in an organization sets the goals or formulates the plans for profitability. These goals are sent to the top management which in turn sends them back to the divisions after modification . Managerial grid: This identifies a range of management behaviour based on the different ways that how production/service oriented and employee oriented states interact with each other. Managerial grid is also called as instrumental laboratory training as it is a structured version of laboratory training. It consists of individual and group exercises with a view to developing awareness of individual managerial style interpersonal competence and group effectiveness. Thus grid training is related to the leadership styles. The managerial grid focuses on the observations of behaviour in exercises specifically related to work. Participants in this training are encouraged and helped to appraise their own managerial style. There are 6 phases in grid OD: First phase is concerned with studying the grid as a theoretical knowledge to understand the human behaviour in the Organization. Second phase is concerned with team work development. A seminar helps the members in developing each member’s perception and the insight into the problems faced by various members on the job. Third phase is inter group development. This phase aims at developing the relationships between different departments. Fourth phase is concerned with the creation of a strategic model for the organization where Chief Executives and their immediate subordinates participate in this activity. Fifth phase is concerned with implementation of strategic model.. Planning teams
are formed for each department to know the available resources, required resources, procuring them if required and implementing the model Sixth Phase is concerned with the critical evaluation of the model and making necessary adjustment for successful implementation. Management by Objectives (MBO) is a successful philosophy of management. It replaces the traditional philosophy of “Management by Domination”. MBO led to a systematic Goal setting and planning. MBO is a process by which managers at different levels and their subordinates work together in identifying goals and establishing objectives consistent with Organizational goals and attaining them. Team building is an application of various techniques of Sensitivity training to the actual work groups in various departments. These work groups consist of peers and a supervisor. Sensitivity training is called a laboratory as it is conducted by creating an experimental laboratory situation in which employees are brought together. The Team building technique and training is designed to improve the ability of the employees to work together as teams. Job enrichment is currently practiced all over the world. It is based on the assumption in order to motivate workers, job itself must provide opportunities for achievement, recognition, responsibility, advancement and growth. The basic idea is to restore to jobs the elements of interest that were taken away. In a job enrichment program the worker decides how the job is performed, planned and controlled and makes more decisions concerning the entire process.
RELEVANCE OF OD INTERVENTION
OD interventions are basically behavioural science interventions, it has got great impact in improving the operational efficiency of TATA MOTORS. It has to be specially noted that different OD interventions do not differ much in their effect. Application of OD interventions helps in the following aspects: 1. Behaviour Modification: It is a programme where managers identify performance- related employee behaviours in tourism destinations and then implement an intervention strategy like MBO to strengthen desirable performance behaviours and weaken undesirable behaviours. 2. Encounter Groups: Encounter groups aim to provide participants with intense experiences to help them their ways of interacting with tourists, their styles of self presentation, their values, etc. 3. Role playing: Role playing develops certain competencies such as perceiving the feelings and ideas of tourists, learning skill of relating a situation, gaining better insight into inter-personal relations.
Tata Nano achieves what most people deemed impossible through originality and ingenuity. It is a no frills car that serves the needs of the general public and India's deplorable road conditions and notorious traffic. In this sense, the production and launch of Tata Nano can be called a revolution - not only to the consumers but also to industry players. Other players are contemplating on their own versions of low cost alternatives as a result of the overwhelming response from the Indian public and all over the world during the pre-launching ceremony. Moreover, their skepticism is met with a surprise upon seeing the model in action. The next step forward for Tata is to address the possible concerns with regard to ownership in order for customers to grasp the value proposition that Tata is trying to propagate. This includes dispelling all perceptions of shortcomings normally associated with a low-cost car through vigorous testing on real roads using real users. The basic rule of customer service still applies. Tata Nano should meet the consumer's expectations by providing a reliable and modestly safe vehicle to drive. The car, with its immense recognition gained even before its launch, is expected to fulfil the dreams of common people.
STRATEGIES TO MANAGE CHANGE PROCESS
• • • • • • There must be situational awareness so that the employees adapt such organizational changes and get motivated to accept a change. There must be supporting structure so that employees manage a change in a organization easily and top level management people support him for that. Strategy analysis must be done so that employee would aware about what would be the change and what step must be taken to manage the change. Training program must be there before the change exactly take place. Proper communication must be there among the top level management and the employees working in an organisation. Career opportunities must be given to the employees as a non-financial benefits so that they get motivated.
OD interventionist must focus on the following factors: 1. Feedback: This involves the awareness of oneself, others, group processes and organizational dynamics. Awareness leads to change if the feedback is not too threatening. 2. Awareness of the changing socio-cultural environment or Dysfunctional current norms: This involves the awareness of the norms influencing one’s behaviour. If there is a discrepancy between the outcome of their present norms and the outcomes they want, people are motivate to change. 3. Increased interaction and communication: Increased communication leads to changes in attitude and behaviour, which does not happen when there is no communication due to “tunnel vision” or “autism” 4. Confrontation: Confrontation involves the surfacing and examining of differences in beliefs, feelings, attitudes, values or norms to remove obstacles to effective communication. 5. Education: Education activities upgrade knowledge and concepts, beliefs and attitudes and skills. 6. Participation: This outcome involves increasing the number of people involved in problem solving, goal setting and generating new ideas. 7. Increased accountability: This involves the clarification of people’s responsibilities and the and monitoring performance related to those activities. 8. Increased energy and optimism: This involves activities that energize and motivate people to aspire to new possibilities and to aspire to a future that is more desirable.
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