Managing

b
ta
Change in
Ki
py

Organizations
Ko

Nilanjan Sengupta
Mousumi S. Bhattacharya
R.N. Sengupta
Managing Change
in Organizations

Nilanjan Sengupta

b
Associate Professor
ta
Institute of Finance and International Management
Bangalore

Mousumi S. Bhattacharya
Ki
Assistant Professor
Institute of Finance and International Management
Bangalore
py

R.N. Sengupta
Former Chief General Manager
State Bank of India
Ko

New Delhi-110001
2012
 b
ta
Ki
py
Ko

MANAGING CHANGE IN ORGANIZATIONS

Nilanjan Sengupta, Mousumi S. Bhattacharya, and R.N. Sengupta

© 2006 by PHI Learning Private Limited, New Delhi. All rights reserved. No part of this book may
be reproduced in any form, by mimeograph or any other means, without permission in writing from
the publisher.

ISBN-978-81-203-2965-2

The export rights of this book are vested solely with the publisher.

Third Printing º º º July, 2012

Published by Asoke K. Ghosh, PHI Learning Private Limited, M-97, Connaught Circus,
New Delhi-110001 and Printed by Sareen Printing Press, Delhi-110042.
 b
To
ta
All in our family and our great teachers
who have inspired us to write this book
Ki
py
Ko
 Contents

Foreword xv
Preface xvii

1. INTRODUCTION TO MANAGEMENT OF CHANGE 1–18

b
Defining Organizational Change 2
Forces for Change 2
ta
Resistance to Change
Responses to Change
Reactions to Change 4
3
3

Overcoming Resistance to Change 5

Ki
Theories of Organizational Change 5
Types of Organizational Change 6
The Process of Planned Change 6
py

Dimensions of Planned Change 8

Strategies for Change Management 9
Toolkit for Managing Change 10
Managing Change: Some Illustrations 11
Ko

Motivating Change at Johnson Ville Sausage 11

Managing Change at North Carolina Trust 12
Key Terms 12
Review Questions 13
Objective Type Questions 14
Class Exercise 16
References 17
Web References 18

2. ORGANIZATIONAL STRUCTURE AND CHANGE 19–37

The Significance of Structure for Change 20
Perspectives on Organizational Structure 20
Forms of Organizational Structure 21
Simple Structure 21
Functional Structure 22
Divisional Structure 22
v
vi Contents

Matrix Structure 23
Project-based Structure 24
Network Structure 24
Structure According to Geographical Location 25
Virtual Organizations 25
Futuristic Organizations Models 26
Amoeba Organization 27
Abacus Organization 27
Pizza Organization 27
EcoNet Organization 27
Spaghetti Organization 27
Inverted Pyramid-shaped Organization 27
Orchestra-styled Organization 28
Influence of Organizational Structure 28
Purposes of Organizational Structure 29
Symptoms of Structural Deficiency 29

b
Factors Determining Change 30
Contingency Factors Affecting Organizational Design 30
Key Terms 33
Review Questions
ta
34
Objective Type Questions 34
Ki
References 36
Web References 37

3. STRUCTURE AND MANAGEMENT OF CHANGE 38–50

py

Approaches to Organizational Redesign 38

Structural Changes in Indian Organizations 39
Government Sector 39
Ko

Defence Research and Development Organization 39

Banking and Financial Services Sector 41
State Bank of India 41
Manufacturing Sector 41
Mahindra and Mahindra Limited 41
Coca-Cola India Private Limited 41
Petroleum Sector 43
Bharat Petroleum Corporation Limited 43
Fast-Moving Consumer Goods (FMCG) Sector 43
Hindustan Lever Limited 43
The Tata Business Excellence Model: An Integrated Approach to
Organizational Restructuring 44
Structural Changes in Global Organizations 45
Structural Change at Nationwide Building Society 45
Conclusion 47
 Contents vii

Objective Type Questions 48

References 49
Web References 50

4. ORGANIZATIONAL CULTURE AND MANAGEMENT OF CHANGE 51–66

What is Organizational Culture? 51
Organization Culture: Various Perspectives 52
National Culture 53
A Systematic Approach to Managing Culture Change within
Organizations 58
Appropriate Change Model to Fit the Situation 59
Steps for Managing Cultural Change: A Model 61
Steps for Bringing about Cultural Change in Organizations 62
Key Terms 62

b
Review Questions 63
Objective Type Questions 63
References
Web Reference
65
66
ta
5. MANAGING CULTURAL CHANGE: INDIAN AND GLOBAL 67–83
Ki
ILLUSTRATIONS
Prominent Research Findings on Indian Organizational Culture 68
Personalized Relationships 69
py

Familial Orientation 69
Religious Orientation 70
Indian Work Values 70
Developing and Nurturing Culture in Indian Organizations:
Management’s Mission and Vision 72
Ko

Bharat Earth Movers Limited (BEML) 72

Oil and Natural Gas Corporation Limited (ONGC) 73
Hindustan Lever Limited (HLL) 73
Managing Cultural Change: Global Illustrations 73
Wilson Learning 73
British Airways (BA) 73
DuPont Nylon 74
Levi Strauss 75
Warner Lambert 75
Managing Cultural Change in Indian Organizations 76
Reinforcing Culture Change at Saint Gobain 76
The Transformation of Tata Consultancy Services (TCS) 76
Corporate Social Responsibility: Stakeholder: Approach to Managing
Culture 77
BPL 77
SAIL 78
TVS Suzuki 78
viii Contents

Key Terms 79
Review Questions 79
Objective Type Questions 80
Class Exercise 81
References 82
Web References 83

6. CHANGE AND HR MANAGEMENT: CONCEPTS AND APPLICATIONS 84–111

Managing Change with Respect to HR Management 84
Issues Relating to Human Resource Process in Managing Change 85
Individual Issues 85
Group Issues 87
Issues Relating to Human Resource Functions in Managing Change 88
Recruitment and Selection 88

b
Reward Management 90
Employee Relations and Involvement 92
Rightsizing 93
ta
Performance Management 93
HRD: A Strategic Perspective for Managing Change
Role of Leaders in HRD 94
94
Ki
Role of HRD Professionals in Managing Change 95
e-HRM in India 97
Change and HR Management Initiatives In Indian Organizations 98
py

National Thermal Power Corporation 98

Bharat Petroleum Corporation Limited 99
Hindustan Lever Limited 99
Steel Authority of India Limited 100
Maruti Udyog Limited 100
Ko

The Aditya Birla Group 101

Crompton Greaves 101
NIIT 102
Asea Brown Boveri Limited 102
OTIS Elevators 103
Change and HR Management Initiatives in Global Context 103
Protection Royale: HRM through Recruitment and Selection 103
Siemens: Managing Change through Performance Management 104
Emerson Electric: Managing Change through HR Planning 105
Employee Assistance Programme at Johnson and Johnson (Desmond 1987) 105
Key Terms 106
Review Questions 107
Objective Type Questions 108
References 110
Web References 111
 Contents ix

7. CHANGE AND STRATEGY IN ORGANIZATIONS 112–128

Role of Strategic Planning in Managing Organizational Change 113
Current Trends in Strategic Planning 114
Types of Organizational Strategies 115
Growth/Expansion Strategy 115
Retrenchment Strategy 117
Stability Strategy 118
Combination Strategy 118
Portfolio Strategy 119
BCG Matrix 119
Business-level strategy 120
Porter’s Generic Strategies 120
Functional-level Strategies 123
Strategy Implementation 123

b
Strategy Control and Assessment 124
Key Terms 125
Review Questions ta
125
Objective Type Questions
References 128
125
Ki
Web References 128

8. STRATEGIES FOR ORGANIZATIONAL GROWTH: APPLICATIONS 129–150

Restructuring the Indian Business Houses 131
py

Cost Leadership Based Strategy 131

Product Performance Based Excellence 134
Globalization 138
Corporate Restructuring: Key Issues in Managing Change 139
Ko

Planned Change Versus Contingency Approach: The Debate 139

Human Resources Integration Approach 139
Integration Process in Merger and Acquisition 142
Organizational Impact of Corporate Restructuring 143
Mergers and Acquisitions in India 144
Strategies for Organizational Growth: Global Initiatives 145
Magma Copper 145
British Telecom (BT) 145
People’s Bank 146
Key Terms 146
Review Questions 147
Objective Type Questions 147
References 149
Web References 150
x Contents

9. ORGANIZATIONAL DEVELOPMENT 151–171

Characteristics of Organization Development 152
History of Organization Development 153
Process of Organization Development 154
OD Interventions 155
Human Process Interventions 155
Techno-structural Interventions 160
Human Resource Interventions 160
Strategic Interventions 161
Role of OD Consultant 163
Reinventing Organizational Development Theory and Practice 164
Key Terms 165
Review Questions 166
Objective Type Questions 166

b
Class Exercise 168
References 170
ta
10. APPLICATIONS OF ORGANIZATION DEVELOPMENT IN INDIA
New Trends in Indian Business Scenario 173
172–190

OD Interventions in India: Two Distinct Settings 175

Ki
Changes in Family Owned Business in India: Need for OD
Interventions 176
OD in India: Case Studies 178
py

The Case of Chemcorp 178

Survey Feedback at Voltas 180
Climate Survey at EID Parry 181
OD Interventions in ONGC 181
Bombay Bank Ltd: Performance Management Oriented OD Intervention 182
Ko

Hindustan Machine Tools: Success Through OD Interventions 183

Restructuring at Wipro InfoTech 183
Bharti Telecom: Development as Focus 184
TISCO: Adopting Change for Growth 184
HRD Audit as OD Intervention 185
Pitfalls of Organization Development Work in India 185
Key Term 187
Review Questions 187
Objective Type Questions 187
Class Exercises 189
References 189
Web References 190

11. WORK PROCESSES AND MANAGEMENT OF CHANGE 191–216

Work Process Models 192
Benchmarking 193
Just-in-time (JIT) 194
 Contents xi

Kaizen: Continuous Improvement and Change Management 194

MRP, MRP II and ERP 195
Material Requirements Planning (MRP) 195
Manufacturing Resource Planning (MRP II) 195
Enterprise Resource Planning (ERP) 196
ERP and Change Management 196
Synpack: An ERP and MRP Initiative 198
Kanban Process and Change Management 198
Industrial Re-engineering and Kanban 199
Yuken India: Streamlining the Kanban System 200
Business Process Management and Change management 201
BPM in India 201
Business Process Re-engineering (BPR) and Change Management 202
The Scope and Key Variables of Business Re-engineering 203

b
Dimensions of Change 204
Outsourcing: A Strategy for Reorganizing Work Activities 205
ta
Outsourcing Scenario in India
Outsourcing in the Legal Sector
206
206
Tata Consultancy Services (TCS) and Offshore Initiatives 207
Knowledge Process Outsourcing (KPO) 207
Ki
Continuous Improvement at TVS 207
Essentialities for the Effective Management of Change 208
Specifications for Designing a New Process 210
py

Key Terms 212

Review Questions 213
Objective Type Questions 213
Case Analysis 215
Ko

References 216
Web References 216

12. ROLE OF INFORMATION TECHNOLOGY IN MANAGING CHANGE 217–234

Role of Information Technology in Managing Organizational Change 218
Value Chain and Information Technology Infrastructure of an
Organization 220
Information Technology: A Competitive Advantage 221
Value Chain Integration for Competitive Advantage 221
Data and Information Technology 221
Process of IT Implementation in Organizations 222
Enterprise Software 222
ERP Architecture 223
Information Technology Outsourcing 223
E-Commerce 224
xii Contents

Role of Information Technology in Manufacturing Sector 224

Manufacturing Execution System (MES) 225
Exploring e-Channels 225
Managing Customer Input 225
Role of IT in Services Sector 226
Financial Services 226
Automated Teller Machines (ATM) 226
Virtual Bank 227
Home Banking 227
Electronic Data Interchange (EDI) 227
Image Processing 227
Expert System 228
Advertising, Media and Infotainment 228
e-Learning 228
Tapping the Full Potential of Information Technology 228
Conclusion 229

b
Key Terms 230
Review Questions 230
ta
Objective Type Questions 231
Case Analysis 232
References 232
Ki
Web References 234

13. CHANGE THROUGH CUSTOMER RELATIONSHIP MANAGEMENT 235–250

py

Understanding Today’s Customers: Transition from Transactional Approach

to Customer-Focused Approach 236
Strategies for Managing Customer-Focused Change 237
Managing Product Excellence 237
Creating Value Through Pricing 237
Ko

Building Supply Chain Capabilities 238

Creating and Maintaining Strong Brands 239
Customer Relationship Management (CRM) 239
Customer Acquisition 239
Customer Interaction Management (CIM) 240
Customer Retention 240
Attrition 242
Defection 242
CRM: The Latest Developments 243
Some Strategies by Indian Companies to Manage Customer-Focused Change 244
Key Terms 247
Review Questions 248
Objective Type Questions 248
Case Analysis 250
References 250
Web References 250
 Contents xiii

14. CONTINGENCY APPROACHES FOR MANAGING CHANGE 251–263

Contingency Approach: Theory and Development 251
Information System and Contingency Approach 252
Leadership and Contingency Approach 253
Contingency Decision-Making Framework 253
Role of Leadership in Contingency Approaches 254
Contingency Approaches of Indian Organizations 255
Indian Companies: Transition from Contingency to Planned Approaches 256
Mahindra and Mahindra 256
Asian Paints 257
Cognizant Technology Solutions (CTS) 258
The Case of Birlasoft Inc 258
Ranbaxy 258
TVS-Suzuki 258
Reliance Industries 259

b
Birla Group 259
Titan 260
BPL 260
TELCO
Key Term 260
Review Questions
260 ta
261
Ki
Objective Type Questions 261
Case Analysis 262
References 262
Web References 263
py

15. MANAGING CHANGE IN KNOWLEDGE ERA 264–278

Knowledge Management (KM) 265
Knowledge Creation (KC) 265
Ko

Knowledge Management and Implementation 266

Steps in Implementation of Knowledge Management 266
Knowledge Dissemination (KD) 266
Knowledge Management (KM) Initiatives in Tata Steel: An Illustration 268
Learning Organization 268
Five Disciplines of Learning Organization 270
How Does a Leaning Organization Operate? 271
The Guidelines to Build a Learning Organization 272
Implementing the Concept of Learning Organization in India 273
Integrated Model for Managing Organizational Change 274
Key Terms 275
Review Questions 275
Objective Type Questions 275
Case Study Analysis 277
References 277

INDEX 279–283
 Foreword

I
n the last decade, Indian business organizations have been challenged by the forces of
globalization and competition. Organizations have tackled these forces in a number of
ways to become competitive and maintain their leadership. In order to do so, organizations
are becoming flatter, leaner and more accountable than ever before. This has led to increased

b
decision-making at every position. Successful management of this change is crucial. Thus,
interventions for change management have become necessary leading to several concepts,
theories, models and practices. Changes in organizations to improve competitiveness and
ta
efficiency are incomplete if advancements in information technology are untapped. Innovative
concepts like business process re-engineering, total quality management, and e-business are
influencing all aspects of managing an organization successfully. Today, organizations are
Ki
able to control their resources to improve their effectiveness, efficiency and quality. This
micro-level control helps in improving coordination and monitoring, leading to better results.
Every organization today, attempts to bring synergy between people, technology and
management. It is from this angle that the interventions of organization development (OD) are
py

important. As more technological advancements take place, the process of OD will become
dynamic, evolutionary and self-learning in character. No wonder, as we move to more
knowledge-based businesses, the organizations will have to strengthen their learning
processes, becoming self-propelled to face the challenges. The process of knowledge
Ko

management will enable the organizations to plan and manage their knowledge assets and to
constantly innovate to stay ahead in the global market. Thus, the role of the change agent will
be important in the organizational success.
This book, which has tried to posit many of these issues and questions related to the
above, can serve as a text for management students and as a guide to practicing managers in
their journey to fathom the issues relating to management of change. Consultants and trainers
will find plenty of examples and case studies of Indian corporates to supplement their inputs.
Professors in management institutes can use this book for discussion as well as case studies.
Additionally, this book can be a handy guide to researchers who would be desirous in
undertaking a journey into the myriad wilderness of finding answers to their questions on
managing change in organizations.

Professor Abhinav Paranjpe

Associate Professor & Programme Chairperson
Institute of Management Technology (IMT)
Nagpur
xv
 Preface

T
his book is designed for management students who are essentially interested in
capturing the process of change management within organizational context. While the
book aims to provide students theoretical foundations in organizational change
management process, care has been taken to address the special issues related to management

b
of change in organizations, in both global and Indian context. The authors have attempted to
provide a blend of key theoretical models and paradigms currently existing in the field of
ta
management of change. At the same time, attempts were made to stress empirically derived
knowledge about the subject, relating it to practical problems of applying the same in the
context of current issues and needs of organizational change management.
Ki
This book has been divided into 15 chapters. The chapterization plan follows a definitive
pattern to help the readers to first know the theoretical frameworks and concepts in a
particular area relating to management of change. In most cases, it is followed by the
organizations’ examples and applications in the context of the prevalent themes, issues and
py

problems connected to the topic. Each chapter indicates the learning objectives for helping the
readers to identify the broad areas and issues that may be learnt in that particular chapter.
The chapters also contain review questions, objective type questions and case analysis for
students to enquire, discuss and debate on the relevant issues pertaining to that particular
Ko

topic. For enhancing readability and user-friendliness, a number of features have been added
in this book such as:
∑ Diagrammatic representations for easy comprehension of concepts and theoretical
frameworks.
∑ Relevant case illustrations of research findings and best practices in companies.
∑ References at the end of each chapter.
∑ List of relevant websites for information on specific topics.
Chapter 1 serves as an introductory chapter where the readers are introduced to the basic
concepts, theories and models, historically and currently prevalent in change management
literature.
Chapter 2 talks about the relationship between change and organizational structure.
Organizational structure both in its traditional and modern variants provides certain
advantages, while at the same time it acts as an impediment in managing change. This
chapter discusses the problems and issues relating to fitting structure and design to the
organizational change management process.
xvii
 Managing Change In Organizations

25%
OFF

Author : Nilanjan Sengupta,

Publisher : PHI Learning ISBN : 9788120329652 Mousumi S. Bhattacharya, R. N.
Sengupta

Type the URL : http://www.kopykitab.com/product/24292

Get this eBook