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Challanges That Face The Change Management Business Essay

Change management is a organised and strategic method of initiate and manage the change process in the business structure and culture as well as the individuals/groups behaviour and frame of mind towards the change transition in the field of the business techniques, technology implementation or any other plans of an business. Change management is approximately modifying or transforming organizations in order to keep up or improve their effectiveness.

Change Management Models:

There are several change management models that the enterprises follow while undertaking the change management process depending upon the bottom realities and the organizational culture of the organization seeking the change functions. One of such models popularly known is identified by John Kotter, who have lay out an eight-step strategy for change management. They are as below

1. To determine a sense of urgency among the list of people in the business.

2. To create a guiding coalition which will steer the reformation with the correct focus and aim to achieve the desired outcome.

3. To build up a clear eye-sight and plan the strategy accordingly.

4. To connect the change in perspective to the folks of the business in a clear fashion.

5. To empower employees towards taking broad-based action to benefit the business.

6. To create short-term wins which in a whole would give the organization a permanent winning result.

7. To combine all the gains of different volumes and in the end produce desired changes.

8. To anchor new strategies in the culture and procedure process of the business.

The above described model is designed keeping in focus on specific activities that will impact results. The benefits associated with applying this model include evaluating employee level of resistance, help employees changeover through the process, create worker specific action programs, and develop a change management plan keeping all the employees of the organization at heart and require them in the entire process.

Case Study Details:

The Change Head:

In May 1996, K. V. Kamath replaced Narayan Vaghul as CEO of India's leading financial services company Industrial Credit and Investment Company of India (ICICI). Soon after taking demand, Kamath felt and known that the organization needs to proceed through a big change to change its target from just being a bank to create a difference and stand extra tall and different from all the competitors to create a brand in the financial composition of India as well in entire south east Asia and created massive changes in the organizational framework and the emphasis of the organization improved ICIC from only a development bank method to that of any market-driven financial conglomerate.

The changes also brought in a whole lot of confusion one of the employees, with multimedia reports frequently hauling quotes from disgruntled ICICI employees. Relating to analysts, a big portion of employees began sensing alienated. The discontentment among employees further increased, when Kamath formed specialist categories within ICICI like the 'organized tasks' and 'infrastructure' group.

Doubts were soon increased regarding whether Kamath had gone 'too fast too early, ' and moreover, whether he'd have the ability to steer the employees and the organization through the changes he had initiated.


ICICI was set up by the Government of India in 1955 as a open public limited company to market industrial development in India. The major institutional shareholders were the machine Trust of India (UTI), the Life Insurance Corporation of India (LIC) and the General Insurance Firm of India (GIC) and its subsidiaries. The collateral of the organization was supplemented by borrowings from the federal government of India, the entire world Standard bank, the Development Loan Account (now merged with the Company for International Development), Kreditanstalt fur Wiederaufbau (an agency of the federal government of Germany), the united kingdom federal and the Industrial Development Bank or investment company of India (IDBI).

The basic targets of the ICICI were to

Help out with creation, extension and modernization of enterprises

Encourage and promote the contribution of private capital, both internal and external

Take the ownership of professional investment; and

Expand the investment market segments.

In 1992 ICICI tied up with J P Morgan of the US to create an investment banking company, ICICI Securities Small. In line with its vision to become a universal loan provider, ICICI restructured its business predicated on the suggestions of consultants McKinsey & Co in 1998. In the overdue 1990s, ICICI focused on accumulating its retail business through acquisitions and mergers. It got over ITC Vintage, Anagram Finance and merged the Transport Credit Investment Corporation of India (SCICI) with itself. ICICI also moved into the insurance business with Prudential plc of UK. ICICI was reported to be mostly of the Indian companies known for its quick responsiveness to the changing circumstances.

While its development bank or investment company counterpart IDBI was apparently not doing very well in past due 2001, ICICI experienced major ideas of increasing on the anvil. This was likely to bring with it further issues as well as potential change management issues. However, the business did not appear to much perturbed by this, due to the fact it had effectively managed to deal with the worker unrest following Kamath's session.

Change Difficulties - Part I

ICICI was an integral part of the club of 3 developmental fund institutions known as ICICI, IDBI and IFCI, who were the sole providers of long-term funds to the Indian industry. When the requirement used to be large in volume, all three used to organize and raise the money for required funding and investment. However, the deregulation beginning in the first 1990s, allowed Indian corporate and business to raise long-term funds overseas, putting a finish to the DFI monopoly. The government also stopped providing DFIs subsidized cash. Eventually in 1997, the practice of consortium loaning by DFIs was phased out. It was amidst this newfound independent position that Kamath, who had been from ICICI for eight years working abroad2, returned to the helm. At this time of the time, ICICI possessed limited expertise, using its key activity being the disbursement of eight-year lending options to big clients like Reliance Establishments and Telco through its nine zonal office buildings.

The change program was initiated within the organization, the first move being the creation of the 'Infrastructure Group (IIG)', 'Engine oil & Gas Group (O&G), ' 'Planning and Treasury Office (PTD)' and the 'Structured Products Group (SPG)', as the loaning routines were quite different for many of these different segment of establishments. Kamath picked up folks from various departments, who he was informed were good, for these organizations. The approach towards creating these new skill models, however, resulted in one unintended outcome.

As these new teams took on the key tasks, a majority of the work, along with a whole lot of good ability, shifted to the corporate center. While the zonal offices continued to do the same work - disbursing lending options to corporates in the same region - their importance within the business seemed to have diminished. An ex-employee remarked, "The best way to get noticed inside ICICI after 1996 has been to attach you to ultimately people who were going these (IIG, PTD, SPG, O&G) departments. These groupings were viewed as the thrust areas and if you worked in the zones it was difficult to be found. " Refuting this, Kamath remarked, "This can be said by people who did not make it and there will always be such people. " One particular who did not easily fit into this set-up were quick to leave the organization. However, this is just the beginning of change-resistance at ICICI.

In the major customer group, a staff around 30-40 people taken care of the needs of the top 100 customers of ICICI. On the other hand, about 60 people manned the growth customer group, which looked after the needs of mid-size companies. Obviously, the bigger clients required more diverse sorts of services. So employed in MCG offered better exposure and bigger purchases. The net effect was that the MCG exec ended up doing more business than the GCG executive. A middle-level director at ICICI commented, "The bosses may call it controlling growth clients but the GCG manager is actually chasing non-performing possessions (NPA)4 and Plank of Industrial and Financial Restructuring (BIFR)5 circumstances. "

Kamath was quick to deny this allegation as well, "Because somebody is within the MCG will not guarantee him success. And these tasks are not long lasting. Today's MCG man could easily by tomorrow's GCG person and vice-versa. " Claims against these changes put in ongoing and ICICI was blamed for not putting in satisfactory systems in destination to develop the right people.

The manner, which ICICI regarded an individual's initiatives - the feedback process - was also questioned. A manager remarked, "Last year the bonuses mixed from Rs 30, 000 to Rs 250, 000 with respect to the performance. Oftentimes the appraisal ratings were same but the bonus amount had not been. And we weren't advised why. "

While Kamath's comments in the media appeared to dismiss lots of the employee issues, ICICI was at fact, putting in place a bunch of measures to check on this unrest. Among the first initiatives was regarding imparting new skills to existing employees. Training programmes and training seminars were conducted for about 257 officials by external businesses, covering different areas. Furthermore, in-house training programmes were conducted in Pune and Mumbai. During 1995-96, around 35 officers were nominated for abroad training programmes arranged by universities in the US and Europe. ICICI also created a two-year Graduates' Management Training Programme (GMTP) for officials in the Junior Management marks.

Along with the training to the employees, management also had taken steps to set right the prize system. To avoid the negative impact of income center way, wherein pressure to show profits might affect expectations of integrity within an organization, management made certain that rewards were related to group performance rather than individual performances. To reward specific star performers, the technique of selecting a star performer was made clear. This managed to get clear, that there would be closer marriage between performance and incentive. However, it was reported that pressure on accountability brought about off some levels of anxiousness within ICICI which led to a great deal of stress in human relationships.

By 2000, ICICI acquired emerged as the second largest financial institution in India with property worth Rs 582 billion. The company had eight subsidiaries providing various financial services and was within virtually all the regions of financial services: medium and long-term financing, investment and commercial bank, venture capital funding, consultancy and advisory services, debenture trusteeship and custodial services.

Change Obstacles - Part II

ICICI had to handle change resistance once again in Dec 2000, when ICICI Bank was merged with Standard bank of Madura (BOM). Though ICICI Bank or investment company was nearly 3 x how big is BOM, its staff strength was only 1 1, 400 as against BOM's 2, 500. 1 / 2 of BOM's staff were clerks and around 350 were subordinate personnel. There have been large differences in profiles, levels, designations and wages of employees in both entities.

It was also reported that there is uneasiness on the list of staff of BOM as they sensed that ICICI would drive up the productivity per employee, to complement the degrees of ICICI7. BOM employees feared that their positions would come set for a closer scrutiny. These were not sure if the rural branches would continue or much less ICICI's business was mainly urban-oriented. The apprehensions of the BOM employees appeared to be justified as the working culture at ICICI and BOM were quite different and the emphasis of the respected management was also different.





Day 1

Denial, fear, no improvement

After a month

Sadness, small improvement

After a Year

Acceptance, significant improvement

After 2 Years

Relief, liking, enjoyment, business development activities

Based on the above mentioned findings, ICICI set up systems to look after the employee level of resistance with action somewhat than words.

The 'fear of the unknown' was tackled with adept communication and the 'dread of incapability to function' was dealt with by sufficient training. The business also produced a 'HR blue print out' to ensure easy integration of the recruiting. (Refer Stand II).





A data foundation of the complete HR structure

Road map of career

Deciding the blue print out of HR moves

Communication of milestones

IT Integration - People Integration -Business Integration.

Staff communication

Cultural integration

Firm structuring

Recruitment &Compensation

Performance management


Staff relations

ICICI transferred around 450 BOM employees to ICICI Bank, while 300 ICICI employees were shifted to BOM branches. Campaign schemes for BOM employees were initiated and around 800 BOM officials were found to be eligible for the campaigns. By the end of the year, ICICI seemed to have successfully completed the HR areas of the BOM merger.

Learning's Through the RESEARCH STUDY:

1. Change Identification

Awareness of necessity for organizational renewal created in the life span pattern of company to protect local competitive market and being capable to take global market in future.

2. Goal Setting

Positive implications of change process were listed to make smarter sense about changes. This list components including:

a) Better quality of services to client

b) Achieve a lot more income

c) Go ahead of rivals

d) Prepare and arranged modern requirements in the bank and investing industry

e) Better management for referenced projects

3. Current State Evaluation

In the ICICI there are some potentialities such as skills, knowledge, money and recruiting that happen to be elements to support change process, but they were not utilized with management methods. In addition, considering capacity for company and its own focus on it was needed to engage some new specialties and also there is not any process of communication between employees.

4. Implementation

In an alteration process, the most crucial points to get started on up are those which have maximum problems, so in order to resolve these problems some improvement jobs were thought as below:

a) Promotion of human resources - Prepare and adjust organization framework to modern matrix framework instead of hierarchy framework. Execute analysis systems based on 360 degree analysis. Employing centralized experts rather than outsourcing.

b) Bettering coordination types of procedures by management information systems. In today's State Evaluation stage it was acknowledged that the most difficult thing is approach to communication between different departments, so responsibility matrix and information circulation diagram prepared for design and build products. After that, by utilizing information systems to combine activities in each unit, employees could simply discuss their needs or basic data and also managers could extract reports from reliable and built in system.

c) Managing tasks by using job management standards and lastly implementing enterprise job management. To begin with project charter was created for each project, then duties matrix applied, after it scheduling and checklists prepared for both stages design and construction. This led to control quality by filling out the checklists and clarify

inspection factors through every process. Corresponding to identified information systems, all of the members of job team might use their own required information by online accessible task charter. Finally job reserve as a report which has characteristic of lessons discovered prepared for projects.

5. Oppose to Halted Factors

The universal problem which occurres through the implementing change process is level of resistance, so for a business which wants to prevent problems it is thoroughly important to reaction to employees (interior customer). To be able to oppose to negative factors and reduce level of resistance, below activities performed:

a) Home design with suitable work environment ergonomics

b) Training personal management, appropriate marketing communications and teamwork to employees which lead to increase professional capability of personnel

c) Arranging coordination conferences and clarify management strategies to middle managers and also to employees

d) Stimulating employees to cooperate in improvement projects

e) Exactly making known for employees the complete processes in the field of their own

6. Continues Improvement and Control

6. Continues Improvement and Control

By the above mentioned study we know the genuine performance of the change management process and what the process is capable of doing if it's operated regarding to established strategies. A system measurement of the performance is actually needed through the all steps of execution change management to be able to being capable to compare successes and the goals. This helps management to control change process with systematic well-timed feedbacks. Even though feedbacks might be positive or negative but in the negative circumstances some efforts will be used to understand the particular mistake is. For example in ICICI there were some evaluation varieties that was must to be filled out by clients to change or complete execution tests and all of that will be used to improve operations of the task execution team


The above research provides us with the final outcome that the actual performance of the change management process and what the procedure is capable of doing, if it is operated corresponding to established techniques. A system measurement of the performance is in fact needed during the all steps of implementation change management in order to being capable to compare successes and the goals. This helps control to control change process with organized well-timed feedbacks. Even though feedbacks might maintain positivity or negative but in the negative situations some work will be used to understand what the mistake is. For instance in the ICICI there are a few evaluation varieties which must complete by clients to modify or complete execution experiments and all of that will be used to improve procedures of the project execution team.

The reason for this paper is to develop a method that will help companies recognize weak points in their change management process and improve it, to evaluate quantity of success in the change management process, a procedure which was identified in ICICI.

ICICI experienced the well laid planning in place. They first involved them in resulting in predetermined quality and time, including client satisfaction, improving standards and diversifying in business requirements. The final criteria's were employee's satisfaction and

cost decrease. With applying this process it helped them to recognize that how much of the aims were attained by applying change management, so a questionnaire have been prepared to measure the results of implementing change management.


The below stated questions make reference to all phases of the change management process and require answers that are required to be replied for evaluation.


2. Employees Satisfaction.

3. Boosting Working Criteria.

4. Information Systems.

5. Cost Reduction

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