Organization culture and issues involved in change management

Murlidhar Puthran

7/28/2011

What is Culture?
y y

y y

Personality of the organization. Comprised of the assumptions, values, norms and tangible signs of organization members and their behaviors. Difficult to express distinctly, but everyone knows it when they sense it Particularly important when attempting to manage organization-wide change
Murlidhar Puthran 7/28/2011

Importance: Organizational change failure is credited to lack of understanding about the strong role of culture and the role it plays in organizations. That's one of the reasons that many strategic planners now place as much emphasis on identifying strategic values as they do mission and vision.

Murlidhar Puthran

7/28/2011

Types of Culture : There are different types of culture just like there are different types of personality
y

Academy Culture (highly skilled and tend to stay in the organization) Eg :universities, hospitals, large corporations, etc Baseball Team Culture (Employees are "free agents" who have highly prized skills,high demands)Eg : Investment banking, advertising, etc.

Murlidhar Puthran

7/28/2011

Types of culture
y

Club Culture (Requirement for employees in this culture is to fit into the group)Eg : Military, some law firms, etc Fortress Culture (Employees don't know if they'll be laid off or not. These organizations often undergo massive reorganization) Eg : savings and loans, large car companies, etc.

Murlidhar Puthran

7/28/2011

Lewins Three-Step Change Model

Unfreezing

Moving

Refreezing

Murlidhar Puthran

7/28/2011

Implementing Change
y Unfreezing: getting ready for change y Moving: making the change y Refreezing: stabilizing the change

Murlidhar Puthran

7/28/2011

Unfreezing
y Arouse dissatisfaction with the current state y Activate and strengthen top management support y Use participation in decision making y Build in rewards

Murlidhar Puthran

7/28/2011

Moving
y Establish goals y Institute smaller, acceptable changes that reinforce

and support change y Develop management structures for change y Maintain open, two-way communication

Murlidhar Puthran

7/28/2011

Refreezing
y Build success experiences y Reward desired behaviour y Develop structures to institutionalize the change y Make change work

Murlidhar Puthran

7/28/2011

10

Overcoming Resistance to Change

y Education and communication y Participation and involvement y Facilitation and support y Negotiation and agreement

Murlidhar Puthran

7/28/2011

11

Case Study:ICICI Bank merger with Bank of Madura (December 2000) What does it reveal ? It reveals the importance of change management for the Bank of Madura and how effective management of change could bring out best results from the employees in the Bank of Madura.

Murlidhar Puthran

7/28/2011

12

ICICI Bank Ltd y ICICI was established by the Government of India in 1955 y 3 times the size of BoM y Staff strength was only 1,400 y departments into individual profit centers

Bank of Madura (BoM) y Established in 1943 at Madurai, Tamil Nadu. By 2000, it was number one bank in Tamil Nadu y One third the size of ICICI y Staff strength was 2,500 y management concentrated on the overall profitability of the Bank

Murlidhar Puthran

7/28/2011

13

Immediate Impact
There were large differences in profiles, grades,designations and salaries of personnel y 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 ICICI y BoM employees feared that their positions would come in for a closer scrutiny. y They were not sure whether the rural branches would continue or not as ICICI's business was largely urbanoriented.
Murlidhar Puthran 7/28/2011

14

Employee behavioral pattern study

PERIOD Day 1 After a month After a Year After 2 Years

EMPLOYEE BEHAVIOR Denial, fear, no improvement Sadness, slight improvement Acceptance, significant improvement Relief, liking, enjoyment, business development activities
Murlidhar Puthran 7/28/2011

15

Steps taken to Decrease resistance of change by ICICI

y Established clear communication channels throughout y Training programmes were conducted which emphasized

on knowledge, skill, attitude and technology to upgrade skills of the employees y direct dialogue with the employee unions of the BoM to maintain good employee relations

Murlidhar Puthran

7/28/2011

16

By June 2001, the process of integration between ICICI and BoM was started
y ICICI transferred around 450 BoM employees to ICICI

Bank, while 300 ICICI employees were shifted to BoM branches. y Promotion schemes for BoM employees were initiated and around 800 BoM officers were found to be eligible for the promotions. y End of the year, ICICI seemed to have successfully handled the HR aspects of the BoM merger. The win-win situation created
Murlidhar Puthran 7/28/2011

17

y We do put people under stress by raising the bar constantly.

That is the only way to ensure that performers lead the change process. K. V. Kamath, MD & CEO, ICICI
y Noticing Small Changes EarlyHelps You Adapt To

The Bigger Changes That Are To Come y Change Happens, Anticipate Change, Monitor Change, Adapt To Change Quickly. Enjoy Change!Be Ready To Change Quickly And Enjoy It Again
Murlidhar Puthran 7/28/2011

18

Murlidhar Puthran

7/28/2011

19