OB in Action Analysis: HCL Technologies - Case Study Example

? OB in Action Case Analysis: HCL Technologies OB in Action Case Analysis: HCL Technologies What were the external and internal forces for change at HCL? Dean Anderson speaks of the forces for change as the factors that initiate “dynamic shifts in the environment” which lead to establishment of “new requirements for success” (Anderson, 2010). In the HCL case study, both external and internal factors that influenced change within the firm can be identified. The external forces, i.e., factors that existed outside the company and were mostly beyond its control, were the threat of competition and the changes in the industry demands. Competitor strength was increasing by 40% or 50% a year, and posed a major threat to HCL, despite the fact that HCL’s revenues were increasing by 30% as well. In an industry where competition was already very tough, it was very important to consider the competitor’s strengths and weaknesses while making a decision. Moreover, there were shifts in market demand, where customers were more inclined towards personalized services as compared to standardized ones, ushering HCL to change in response to customer demands. The IT is an industry where firms need to be highly responsive to even slight changes in customer demands in order to retain or advance upon their market share. Apart from the external drivers of change, there were internal forces for change that existed within HCL in the form of organizational structure and employee morale. While Vineet Nayar identified that employees were the main value for HCL as a firm, the hierarchical pyramid “made it difficult for employees to add value” (Kreitner & Kinicki, 2009). Managers, while being the ones coming into direct contact with the customer, felt bound by the restrictions from the higher management of HCL. The result of this was a generalized feeling amongst the employees that the firm does not see them as valuable, and thus, were not motivated enough to achieve different goals. Introduction of changes that break the hierarchical barrier would have eventual consequences of boosting employee morale, which would in turn affect overall productivity. 2. To what extent did Vineet Nayar follow the change models proposed by Lewin and Kotter? Explain. Vineet Nayar followed the change models of both Lewin and Kotter to a great extent. Lewin’s model for change comprises of three steps, namely, unfreeze-move-refreeze (Lunenburg, 2010). Nayar was successful in initiating the unfreeze phase within HCL by first creating awareness that it is crucial for the firm to transform. The move phase was also duly followed through implementation of a systematic plan of action that allowed HCL and its employees to head towards a single direction. The final step, refreezing the company into an equilibrium within which it can effectively operate was also achieved in the success story of HCL. The 8 step Kotter model, based on the primary basis of the Lewin model, is a more specific guide to implementing change. Nayar followed this model successfully as well. First, a sense of urgency was established by identifying the external and internal forces of change. Next, managers were brought into confidence so that change is not implemented but accepted by HCL. Developing a broader vision and communicating it to the employees followed after which hurdles to the proposed change were removed. Short term goals in the form of setting up a smart service desk and initiating online planning process were achieved on basis of which further changes were brought in. This plan of action was concluded by reinforcing the need for a constant responsiveness to change and innovation. Thus, the Kotter model, in addition to the basic Lewin model, was effectively followed by Vineet Nayar. 3. Which of the target elements of change within the systems model of change were affected by the changes at HCL? The changes in HCL affected a number of the target elements of change identified in the systems model. Target elements of change refer to the factors that can be altered within a firm (Berry, 2007). Beginning with organizational arrangement, there was overall restructuring of this aspect of the company. The policies, procedures and rewards system of HCL was altered, which is evinced by the introduction of the comprehensive 360-degree evaluation system. Through this, each employee was evaluated by his seniors, peers and juniors, offering a detailed insight into the value that particular employee added to the firm. Moreover, the initiative of sharing financial data of HCL with the employees was a step that allowed departments to not only see how successful their department was in terms of the profit it contributed towards HCL, but also instilled a sense of competition amongst the various departments within the firm. In addition to the changes in the organizational behavior of HCL, the changes introduced affected the Social factors within HCL. This means that the interpersonal interactions, communications and overall culture within the firm were altered. For example, the introduction of meetings where thousands of HCL employees would interact with each other proved crucial in this respect. The series of meetings was named Directions, and are a regular feature of the firm since 2006. However, the milestone of the HCL transformation is the initiative called Employee First, Customer Second (EFCS). This unique introduction to the culture of the organization called for an environment where the employee is seen as the most valuable asset of the firm. The preference, interest and comfort of the employee were seen as a priority, a culture that made the employee more satisfied and increasingly productive in their workplace environment. Extra effort was put in to encourage employees to pursue their passion, for which the Employees First Council was set up. The aim of this council was to accommodate employees with intrinsic passions like arts, music, etc., within their stringent work routine. The “unexpected benefit” derived from these councils is the synergic effect created by amalgamating personal passion into routine work – something which favors the employee as well as the firm HCL. 4. What did Vineet Nayar do to overcome resistance to change? Could he have done anything differently? Explain. Change is almost always seen with skepticism, especially when it is being implemented from above. In the case of HCL, when Vineet Nayar introduced the idea of restructuring the company, there were concerns on behalf of the managers, who thought the changes would do more harm than good to HCL. There were some who believed the present position of HCL in the international market is fairly strong, and any impulsive changes introduced might serve to damage the reputation of the company that has been carefully built over the years. On the other hand, there were those who believed that the company needs to gain in terms of networking, and structural changes within the organization may not be a feasible priority for the immediate future. Mr. Nayar, however, overcame this resistance through tactful understanding and deliberate delay.The first plan of action was to remove the impression that change is being imposed upon the firm and its employees from a top down approach. This was crucial in making the employees believe that the firm values the opinion of each and every employee, and they should trust the firm to decide in their benefit. He listened patiently to the employees’ discussions for three days straight without imposing his own thoughts and views. This was an important step in gaining the trust of the employees, allowing them to shed their fears. 5. What did this case teach you about organizational change? Discuss. HCL’s story teaches some very important things about organizational behavior. First, it is extremely crucial for a firm to be aware of the face that change is inevitable. Stagnation for any firm is the first mark of its decline. One of the main reasons for HCL’s success is the fact that Vineet Nayar was able to identify the external and internal drivers of change. Once the need for change was identified, an effective plan of action was devised that accommodated the required structural changes required within the company. It might seem trivial but ignorance and lack of information about the company’s prospects has led to the fall and eventual bankruptcy of many profitable firms. Another crucial lesson learnt was that even though change is deemed necessarily by the top management of the firm, it cannot be implemented on a large scale without the consent and confidence of the employees. It is the employees that are the backbone of the firm, and without gaining their trust before bringing about a change, efforts can go unsuccessful. In a situation where change is imposed from the top, employees may be forced to accept it and abide by it. However, being coerced into doing something may actually have negative effects on the productivity of the employees, which would in turn affect the profits of the firm. Having the employees believe in the necessity of the change as well as the overarching vision underlying the change will not only have a unifying effect on the entire firm, but will also bring about effective results in the form of increased revenue. In addition to this, we are also made aware of the critical reality that an organization’s success cannot be based on current performance, but on future prospects. In the case of HCL, we see that revenues were rising by 30% on an annual basis. Despite this encouraging figure however, HCL realized that it needs to restructure itself if it needs to survive in the future. All firms operate on the long term and not on the short run. While short run goals may be important to provide a source of motivation for those working within the company, it is the long term successes that really matter. HCL responded to changes in the long term demand for its services, a step which proved to be extremely productive and effective for the company. The changes introduced were a combination of those targeting the short run and the long run. This is important because planning for the long run requires patience but if everything goes as planned, is highly effective as well. Thus, a firm’s profitable existence in the present should not be treated as an indicator for guaranteed future success, and future prospects should always be taken into account while taking organizational decisions. References Anderson, Dean, and Linda S. Anderson.Beyond change management how to achieve breakthrough results through conscious change leadership. 2nd ed. San Francisso: Pfeiffer, 2010. Print. Berry, M. (2007). Identifying essential elements of change: lessons from international research in community-based family centres (1e dr. ed.). Leuven: Acco Kinicki, A., & Kreitner, R. (2009).Organizational behavior: Key concepts, skills and best practices. (4. ed.). London: McGraw-Hill. Lunenburg, Fred. "Approaches to Managing Organisational Change."National Forum. N.p., n.d. Web. 24 Apr. 2013. Read More