Management of Change - ICICI - Essay Example

MGT540 - Management of Change Contents Contents 2 Introduction 3 Change management theory 3 Models of change management 5 Company background – ICICI 7 Change management in ICICI 8 Effect of planned change 9 Scope of improvement 10 Reference 11 Bibliography 12 Introduction Every company during its life time has to bring some or other change in its management or structure. As a strategic move many companies go for merger, acquisition, takeover etc as a policy of growth. With the invention of new techniques and technology many times their companies have to bring changes in its operations. These changes are focused to improve the condition of the business. Change is an important and vital aspect of almost every company. To exists in the fast moving and ever changing world the companies have to bring change in its operations. For example with the invention of computer and information technology, almost every company has to incorporate the use of information technology to compete in the changing business situations. Change often makes the member of the company to shift from their comfort zone to adopt the change brought in the organization. This often makes the employees to resist the new change. Thus the change brought in the organization has to be managed in a proper way so that the change can be implemented in the organization by dealing with the resistance in a tactical and planned way. In this project the change management done by ICICI bank during 1997 and after the merger of Bank of Madura has been analyzed. Change management theory Change is a constant ingredient of the organization. Every organization passes through two types of change during its life time. One is the continuous change and the second one is the radical change. Continuous change faces very little resistance and is managed by the manager or the supervisors effectively. The major concern for the company is to manage the radical change which faces the maximum resistance. The organizations are quite complex, therefore the organizational problems related to the human factor is also quite difficult to handle. The first thing which the organization faces when any change is brought in the organization is the resistance created by the attitude, personalities and incompetency of the employees. More over if any transfer of power takes place due to the change brought in the organization, can cause the employees to resist the change (Bolman and Deal, 2011, n.d.). Therefore this change has to be managed in a planned way. Every organization has to bring change for some or the other reasons. There are various internal and external reasons which initiate change in an organization like change in market conditions, change in technology, change in type of competition, change in organizational ideas etc (Kanawaty, 1991, p.4). Change in an organization can also be brought in an organization due to some internal factors which are solely related with the organization. These factors can range from change in the organizational strategy or the business to change in managers or change in employees profile or attitude or change in equipments used by the employees. Among all the internal changes, change in business strategy is a reason which gives a major domino effect. If the strategy of a business changes then to implement that strategy many changes has to be brought in the organization which may include change in equipments, change in managers, change in the number of employees or/ and change in profile of the employees. In the early 90s the change which was brought in the ICICI was due to change in strategy. Change in an organization can also be a result due to change in government policies and globalization. Globalization can affect the organization’s policy to a greater extent initiating a major change in the organizational strategies of the business. Suppose an organization has major market share in a country but due to the entrants of the foreign companies in the market the company has to deal and compete with those firms too therefore the company has to bring organizational change in the organization. Apart from this the company may have to bring organizational change due to the change in political and market situation and also the economic conditions of the country. Change in the needs of the customers and change in the preference of the customers can also lead to the organizational change. Also change can be brought for the change in organizational structure and the change in the conditions of the resources available to the organization (Sharma, 2008, p.5). Managers act as the important agents on implementing and managing the change in a proper manner concentrating on the reframing and at the same time considering the integration on culture of the organization which is needed for managing the change on the onset of any merger or acquisition (Bolman and Deal, 2011, n.d.). Models of change management Change has been classified in various ways by various authors. Many of the theorists have classified changes according to the rate at which it has occurred and this has been popularly termed as the substance of change. Bate (1994), has primarily put forth two types of change, namely incremental change and transformational change. The former relates to the minor and small changes in processes, technologies, and structures while the latter refers to the implementation of radical changes programs in organizations (Macredie, Sandom & Paul, 2005, p.2). The following figure demonstrates the most prominent models for making an analysis of organizational change which are henceforth discussed in details. Figure 1: Principal Change Management Models (Source: Macredie, Sandom & Paul, 2005, p.2) Derived from the Lewinian theory, the planned approach planned approach primarily considers the process of change as moving from a fixed state to another fixed state. The Emergent approach was proposed by Burnes (1996), and is commonly described as conceptualist perspective or processual perspective. The common rationale that they share is that change must not be or cannot be frozen. Also, it should not be considered to be a liner sequence of events. Rather it must be considered to be a continuous process. The approach is not based on processual perspective; rather it is more analytical and tries to achieve a broader understanding of the process of change management which is surrounded by a complex environment (Macredie, Sandom & Paul, 2005, p.5). Another approach has been explained by Burns and Stalker (1961), by establishing a contingent relationship between the organization and its environment and the need for the organization to adapt to the environmental changes. The difference of this approach from the planned and emergent approaches is based on the fact that it does not consider a particular change process as the best way. The theorists have put forth that change process can take place through many different ways as per the needs of the situation and that there might not a particular and optimum change process (Macredie, Sandom & Paul, 2005, p.6). This can be explained by the following figure. Figure 2: Change Management Continuum (Source: Macredie, Sandom & Paul, 2005, p.7) The figure depicts how the contingency theory rejects the concept of “one best way” approach of change process and shows how an organization is dependent on the situational variables that it confronts with and thus has to adopt the appropriate management approach in response to the impacts of the environment. Company background – ICICI ICICI is the second largest banking institution in India covering a wide range of financial services and banking products. It serves numerous corporate and retail customers through various delivery channels and it’s specialize subsidiaries in fields of insurances, investments banking, asset management and venture capital (ICICI Bank, 2011). The subsidiaries of the bank are located in different countries like the United Kingdom, Canada, Russia, United States, Bahrain, Singapore, Sri Lanka and many other nations. The company has demonstrated various change management initiatives in its structures, processes etc. The company primarily thrives on the idea of providing support to the poor people in the economies and improving their capacities for participation in the large economy. This ingrained idea has acted as a driving force for the company’s creative thinking towards serving the bottom layer of the economic pyramid (Markson & Hokenson, 2003, p.1). The idea of providing benefits to the poor accounts for one of the major innovative strategies and change initiatives of the company. This is complimented with the introduction of a number of ancillary benefits, dramatic ad radical technologies usage and the creation and implementation of new strategies and practices. The visible and dramatic efforts of the company have been seen in its attempt to grow its microfinance model, and its partnerships with the NGOs and MFIs. It has also purchased numerous SHGs within a span of two years and purchased the Bank of Madura. The company has also applied its creative thoughts to produce and viral growth model using its quality financial expertise in a model which would be economically viable and advantageous (Markson & Hokenson, 2003, p.24). Change management in ICICI The ICICI was formed as a development initiative by the government of India. It was a part of the development financial institutions like Industrial Development Bank of India and Industrial financial corporation of India. The main aim of this type of institution was to gather long term fund for the industrial organizations of India. They were the providers of funds to the industry of India. But, on the onset of globalization the ICICI faced major challenges from the foreign financial institutions. To counter this change, the management of the ICICI on Specializing on the different sectors on the organization and also focused on achieving the customer satisfaction. To concentrate on the various types of the clients, many types of groups were created. Unlike to the previous process after the implementation of the change the customers now do not have to go from one department to the other to satisfy their needs. Specialization was also brought in the organization by departmentalizing it into various groups. To bring this change in the organization many new skills were imparted to the employees to make enable them to adapt these changes. External training agencies were also invited to impart skills to the employees. Many new training programs were also started by the organization like graduate management training program for management grade employees for which the employees were many times were send to the foreign shores. Good reward system was also started in the organization in order to encourage the employees to perform better. A all round appraisal was also initiated to make the feedback more fast. Another change was also brought in the organization after the merger of ICICI with the bank of Madura. The strength of the staff in the bank of Madura was much more than the strength of the staff of the ICICI bank. Most of the employees of the Bank of Madura were clerks and the use of technology in their work was very limited. More over the productivity of the employees of Bank of Madura was less than that of the employees of the ICICI bank. To bring the productivity of the employees of the Bank of Madura at par with the employees of the ICICI bank, proper training was provided to the employees. ICICI also concentrated to upgrade the branches of the Bank of Madura technically to bring it at the level of the ICICI (IBS Center for management research, n.d.). Effect of planned change The first change which was initiated be KV Kamath in the 1990s was to make ICICI bank a one stop financial service provider. It is also the first Indian bank to be listed in New York stock exchange (ICICI bank, n.d.). For this the organization brought many changes in terms of specialization and customer satisfaction. To counter resistance to change the organization also took steps to enable the employees of the organization to adapt to the change. The second change which was brought in the bank was to bring the standard of the branches of Bank of Madura and the employees of the organization at par with the ICICI. The changes which were brought in the organization resulted in a number of situations and consequences. In the first day of the change the employees showed no improvement and also denied to accept the change. After one year the employees started accepting the change and after two years the employees fully accepted the change and also started to enjoy it. ICICI bank is now one of the leading banks of India which proves that the changes were well managed. Scope of improvement The change brought in the organization in both the situations was managed well. The management of the ICICI brought changes in response to the change in the market situation. To bring the change in the organization and make it competitive, specialization was brought in the organization. The management also managed the change well after the merger of Bank of Madura but there is room for improvement too. The management of ICICI should also have worked more on raising the confidence and trust of the employees of the merged bank. The appraisal system can be made more transparent which will in turn boost up the morale of the employees and would have helped more in break the resistance to change. To conclude it can be said that changes brought in the ICICI bank in 1997 and after the merger of Bank Of Madura has been managed well as a result the has achieved its organizational objectives and have became one of the biggest private sector bank in the country. Reference IBS Center for management research. (No Date). Change Management @ ICICI. Retrieved on September 5, 2011. from http://www.icmrindia.org/casestudies/catalogue/Human%20Resource%20and%20Organization%20Behavior/HROB008.htm. Kanawaty, G. (1991). Managing and developing new forms of work organization 2nd ed. Germany: International Labour Organization. Macredie, R. D., Sandom, C. & Paul, R. J. (2005). Modelling for Change: An Information Systems Perspective on Change Management Models. Retrieved September 05, 2011 from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.89.8652&rep=rep1&type=pdf. Markson, T. J. & Hokenson, M. (2003). Case study series: Introduction. Retrieved September 05, 2011 from http://www.bus.umich.edu/FacultyResearch/ResearchCenters/ProgramsPartnerships/IT-Champions/ICICI.pdf. Bolman, L. G. and Deal, T. E. (2011). Reframing Organizations: Artistry, Choice and Leadership 4th ed. USA: John Wiley and Sons. Sharma, R. R. (2008). Change Management. India: Tata McGraw-Hill Education. ICICI Bank. (2011). ICICI Bank: About us. Retrieved September 05, 2011 from http://www.icicibank.com/aboutus/about-us.html. ICICI Bank. (No Date). History. Retrieved on September 5, 2011. from http://www.icicibank.com/aboutus/history.html. Bibliography Cummings, T. G. and Worley, C. J. (2008). Organization development & change 9th ed. Canada: Cengage Learning. Kondalkar. (2009). Organization Effectiveness and Change Management. India: PHI Learning Pvt. Ltd. McCalman, J. and Paton, R. (2006). Change management: a guide to effective implementation 2nd ed. Great Britain: SAGE. Palmer, D. A. (2005). Managing Org. Change. India: Tata McGraw-Hill Education. Read More