case studies of technological change and organisational culture

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Case Studies of TechnologicalChange and OrganisationalCultureG. C. Nag a , S. R. Ganesh b & R. D. Pathak ca Medical Solutions DivisionSiemens Ltd. , Mumbai,Indiab Tata Consultancy Services , Mumbai, Indiac Department of Management and PublicAdministration , The University of the South Pacific,FijiPublished online: 20 Oct 2008.

To cite this article: G. C. Nag , S. R. Ganesh & R. D. Pathak (2002) Case Studiesof Technological Change and Organisational Culture, Journal of TransnationalManagement Development, 6:3-4, 3-19, DOI: 10.1300/J130v06n03_02

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Case Studies of Technological Changeand Organisational Culture

G. C. NagS. R. GaneshR. D. Pathak

ABSTRACT. This paper focuses on technology as a central force inshaping cultural and environmental conditions as well as their interrela-tionships within an organisation. The research was carried out in Sys-tems India Ltd., a subsidiary of Systems Corporation of USA, which isone of the oldest multinational corporations in the world. The two casestudies from Systems India Ltd. bring out the ‘role of strategy in techno-logical changes’ and the ‘role of leadership in technological changes.’The findings of these two case studies when compared with three partnercompanies in similar industry indicated similar relationship between cul-ture and technological change and organisational culture in Systems In-dia Ltd. [Article copies available for a fee from The Haworth Document Deliv-ery Service: 1-800-HAWORTH. E-mail address: <[email protected]>Website: <http://www.HaworthPress.com> © 2001 by The Haworth Press, Inc. Allrights reserved.]

KEYWORDS. Culture, technology, change

G. C. Nag is General Manager-Personnel, Medical Solutions Division, SiemensLtd., Mumbai, India (E-mail: [email protected]).

S. R. Ganesh is Consulting Advisor, Tata Consultancy Services, Mumbai, India(E-mail: [email protected]).

R. D. Pathak is Professor and Head, Department of Management and Public Admin-istration, The University of the South Pacific, Fiji (E-mail: [email protected]).

The authors acknowledge the comments of Dr. N. Reddy (Senior Lecturer, Depart-ment of Management and Public Administration, The University of the South Pacific)on the first draft of this paper.

Name of the company is disguised.

Journal of Transnational Management Development, Vol. 6(3/4) 2001 2001 by The Haworth Press, Inc. All rights reserved. 3

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INTRODUCTION

It has been observed during various studies that the implementationof a time-bound technological change in large numbers of industriesand organisations is a difficult process and creates problematic issues inthe organisation. The cultural background of these organisations is suchthat these companies are not able to carry out time-bound changesthrough technology or innovation. Whether there are some inherentproblems or resistance to change or hesitance from the company em-ployees or officials or even at the management level, is not known.Sometimes even after overcoming all the problems, when the organisa-tion tries to bring new products then the technology used or the productsmade have either turned out to be obsolete or outdated or the cost of theproducts are so high that it can no longer face the competition. These arecommon phenomena even in some of the well-established companies.The realisation of such failure comes to the notice of the organisation’smanagement when everything is over. While without such innovationor technological change, no organisation can survive; yet, all theseproblems have something to do with the organisation culture. This re-search was undertaken to know the relationship of the above two issuesand to put greater emphasis as to what needs to be done to integrate cul-ture and innovation in order to overcome the above problems.

TECHNOLOGICAL CHANGE

The process of technological change or technological innovation is thebasic need for any business or service organisation. Figure 1 clarifies asto how the market and demand of technology reinforces the process oftechnological innovation. There are seven stages of technological inno-vation. First, the recognition of potential demand from the market on oneend and on the other end is the technical and commercial feasibility. Thisfollows into the second stage of idea formulation or the product designconcept and evaluation. The third stage is the problem-solving stagethrough technical and market information. Prototype formation throughadaptation or adoption of existing technology is the fourth stage. The fifthstage is the commercial exploitation. The sixth stage is to transfer to man-ufacturing, i.e., technology utilisation or diffusion. The seventh stage is toagain search for new technology and to look for market demand. Thetechnological innovation is a dynamic process and all technologicalchanges or innovations are the vital ingredients for development of any

4 JOURNAL OF TRANSNATIONAL MANAGEMENT DEVELOPMENT

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organisation. Such technological development leads to improvement oforganisation performance. It may be mentioned here that every techno-logical innovation has to be within a time span to beat competition in themarket; however, this process generally faces many constraints tomaintain a prescribed time frame such as: (a) strategic decisions at thetop of organisation, (b) education and training of employees in manage-ment of technology, (c) contribution of Human Resource Development(HRD) in cultural development, (d) change of organisation environ-ment and (e) managerial characteristics. This dynamic process of tech-

Nag, Ganesh, and Pathak 5

TECHNOLOGY

Technicalandcommercialfeasibility oftechnology

and / or

and / or

and / or

Potentialdemand oftechnology

MARKET MARKET

Needrecognition

1

Evolutionofproduct

Use Use

SEARCH FOR NEWTECHNOLOGY

Search fortechnologicalsolution byresearch andcalculation

Solutionthroughexistingtechnologyby adoptionor adaptation

Availabletechnicalinformation

Commercialexploitation

Transfertomfg.

Technicalandcommercialfeasibilityof newtechnology

Searchmarketorientedinformation

Solutionthroughinnovation

Use Test ResponseLOOK FOR

NEW MARKETDEMAND

Formulation ofideas

Problemsolving

Prototypesolution

Commercialdevelopment

Technologyutilisationor diffusion

Demand ofnew technology

2 3 4 5 6 7

FIGURE 1. The Dynamic Process of Technological Innovation

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nological innovation overcomes a large majority of constraints andaccelerates the process of innovation within a prescribed time frame.Figure 2 describes the dynamic process of technological innovationwithin the context of organisational culture.

In any given group with enough of a history, culture is the pattern ofassumptions that the group has invented, nurtured, and evolved in learn-ing to cope with the problems of survival in the external environmentand its problems with how to manage itself as a group. Technology se-duction is probably one of the most interesting ways of changing peo-ple’s assumptions. When a new technology comes, we slowly getseduced into the ways of thinking, new assumptions form, and, beforelong, we are really doing things differently. We don’t quite know how,but it all happened. Some of the changes are not conscious, but somegood turnaround managers do these sorts of things deliberately and wedon’t quite know when it all happened. When we link culture to perfor-mance or output, what warrants this research is to make a useful and ef-fective choice of technology that needs the following things:

i. Examine culture as it exists today in the organisationii. Determine how this culture shapes the technology, its uses, and

how it determines the selection of new technologies.iii. Determine how to locate technology that could shape business

outcomes, both possible new outcomes and desired old out-comes

Finally, these also leave many research questions unanswered, such as:

a. How are the characteristics of culture related to the characteris-tics of technology?

b. How does the relationship between culture and technology con-stitute a compatibility between the two and what relationshipconstitutes a conflict between the two?

c. To what extent does culture “sub-optimise” technology, that is,set limits on the selection and use of technology, limits that keepoutputs below optimal levels?

d. Is it the cultural tendency to seek the best of technologies or is itthe technology that optimises an organisation’s output?

It is also known that technology and technological changes are im-portant determinants of environmental conditions. Research indicatesthat technological change proceeds through periods of stability punctu-


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TIME FRAME

TECHNOLOGY

SEARCH FOR NEWTECHNOLOGY

Strategicdecision atthe top oforganisation Solution

throughexistingtechnologyby adoptionor adaptation

UseUse

Search fortechnologicalsolution byresearch andcalculation

Contributionof HRDfunction inculturaldevelopment

Technicalandcommercialfeasibility oftechnology

and / or

and / or

and / or

Evolutionofproduct

Availabletechnicalinformation

Potentialdemand oftechnology

Searchmarket-orientedinformation

Solutionthroughinnovation

Use Test ResponseEducation &training inmanagementof technology

MARKETMARKET

CommercialExploitation

Change oforganisationenvironment

Managerialcharacteristics

Transfertomfg.

Technicalandcommercialfeasibilityof newtechnology

LOOK FORNEW MARKETDEMAND

1 2 3 4 5 6 7

Needidentification

Formulationof ideas

Problemsolving

Prototypesolution

Commercialdevelopment

Technologyutilisationor diffusion

Demand ofnew technology& new market

FIGURE 2. The Accelerated Process of Technological Innovation with Ele-ments Derived from Culture

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ated by discontinuous advance. Although technology is not the only de-terminant of environment conditions, it clearly wields an importantinfluence. This research focuses on technology as a central force inshaping cultural and environmental conditions and defines their rela-tionship in the organisation.

SYSTEMS CORPORATION AS MULTINATIONAL

The early modern multinationals were European. Stora, a Swedishpulp, paper, and chemical manufacturer was founded in 1550. DuPont,which is nearly 200 years old, started as a gunpowder company. Thenext, which dates from the beginning of the nineteenth century, was theS.A. Cockerill Steelworks, which was established in Prussia in 1815and today is Belgian-based. Others that followed at the middle of thecentury were Siemens of Germany in 1847; Systems Corporation ofUSA in 1847; Bayer of Germany in 1863; Nestle of Switzerland in1867; Belgian Solvay in 1881; Lever Brothers of UK in 1890; andMichelin of France in 1893. However, there are few issues that havegenerated more rhetoric in recent years than the relationship betweenmultinational corporations and developing nations.

Systems Corporation Incorporated (SC) is one of among the oldestmultinational corporations in the World. It was founded on October 1,1847 as ‘Systems Telegraph Company’ in Chicago by a US Army offi-cer, Mr. Richard Sinatra, along with Mr. John Twill and Mr. Alfred But-ler with three workmen. Richard Sinatra had the courage to strike outinto the giant territory of electrical engineering and shape it scientifi-cally, technically, and industrially at a time when the Industrial Revolu-tion had begun to transform the world. Inventive spirit, skewed businesssense, and a love for converting scientific and technological principlesinto the practical solutions allowed Richard to achieve many notablefirsts in the history of engineering.

The pointer telegraph, dynamo, X-ray tube, the world’s first electricrailway, the laboratory samples of 64 MB chips are only a few links inSystems Corporation’s long chain of distinguished innovations. It is theonly systems integrator in the global market, operating in the eight-corebusiness segments of energy, industry, telecommunications, transporta-tion, information technology, health care, components, and lighting.Offering sales and service facilities in more than 181 countries, SC hasproduction facilities outside the USA and a work force of 373,000highly skilled, motivated employees. Systems USA had done a lot of in-


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novative changes during the period of the last 150 years, and the mostimportant time of innovative changes was during the period offorty-three years of Mr. Richard Sinatra.

THE MAIN PARTNER SYSTEMS (INDIA) LTD.

This research was carried out in Systems India Ltd. It is the Indiansubsidiary of Systems Corporation of USA. It all started between theyears 1867 and 1872, when Systems Telegraph Company of USA andSoman Brothers of UK laid the foundation of Indo-US Telegraph line,from London to Dhaka, which ultimately brought India close to Europe.This achievement of Systems was then considered as one of the greatestfeats of technological advancement. The telegraph line was over 11,000kilometres long, in other words, equivalent to more than a quarter of thecircumference of the earth. The actual trading business of Systems IndiaLtd., as representative of Systems Corporation of USA, started from theyear 1922. But during World War II, it stopped its business in India dueto some unavoidable reason. Systems India Ltd., again started tradingbusiness from the year 1949. In 1954, Systems India Ltd., set up a smallassembly shop under the Elphistone Road Bridge which is just 3 kilo-metres away from Mumbai Central Station. In 1957, the company setup a manufacturing unit at Mahim for manufacturing switchboard prod-ucts for power supply stations and also started manufacturing X-rayproducts that same year. With the further demand for switchboards, thecompany expanded its manufacturing activity and became a public lim-ited company in 1961. With the growth of industrialisation, there was agreat demand for electrical energy in the country. In 1963, the companytook another place at Bandra in Mumbai and started manufacturingswitch-gear products. As the business expanded, the company set upanother factory in 1966 at Thane (which is about 40 kilometres awayfrom the Mumbai city), to manufacture electrical motors. In 1975, therewas a readjustment of manufacturing units. The switchgear factory atBandra and thereafter the switchboard factory at Mahim were shifted toThane. In 1980, the small switchboard-manufacturing workshop at Cal-cutta was shifted to Kalyani (40 kilometres away from Calcutta). Fromthe year 1982, the company’s new business opportunity took a new turninto industrial electronics. In 1987, the company set up another new fac-tory at Pune for manufacturing industrial electronic products, e.g., staticconverters/inverters, automation equipment, etc. In 1991, the companyentered into software business and formed a new company–Systems In-


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formation Systems Ltd., (SISL) in association with Systems Corpora-tion of USA. In 1993, the company entered into telecommunicationbusiness and set up a factory at Taratala near Calcutta to manufactureelectronic switching systems (EWSD). In 1996, the company set up an-other factory at Bangalore for medical engineering products.

Table 1 below sums up the organisation changes in Systems IndiaLtd.

Up to 1989, Systems India Ltd. had a total of four factories manufac-turing wide varieties of electrical and electronics items. A general man-ager of works was responsible for the working of the factories, reportingdirectly to the Managing Director of the company. Then, in 1990, theSystems India Ltd., was divided into six products divisions and formedinto strategic business units. Again in 1991, there was further restruc-


TABLE 1. History and Development of Organisation Changes in Systems IndiaLtd.

Year History and Development of Changes in Systems IndiaLtd.

Systems in India Action

1922 Starting of Trading Business Representative of Systems Telegraph Co.

1954 Assembly shop under Elphistone Bridge … do ….

1957 Mahim Works for Switchboard Manufacturing Systems Mfg. Co. of India Pvt. Ltd.

1959 Mahim Works for X-ray Products Manufacturing …. do …..

1960 Mahim Works for Switch-gear Manufacturing ….. do …….

1961 The company converted into Public limited company Systems Mfg. Co. of India Ltd.

1963 Switch-gear Manufacturing shifted to Bandra Works ….. do ……..

1966 Electrical Motors started manufacturing at Thane Works ….. do ……..

1973 Expansion of Switch-gear at Thane Works Systems India Ltd.

1975 Switchboard manufacturing shifted to Thane Works …. do …..

1977 Electronic equipment manufacturing at Mahim ….. do …….

1980 Kalyani Works starts manufacturing Switchboard …. do ……

1981 Expansion of Switchboard at Pune ….. do ……

1986 Transfer of Railway Signalling Products to Thane …… do …….

1987 Modern Electronic Factory at Pune Do

1991 Expansion of Switch-gear at Ahmedabad Do

1991 Formation of Systems Information Ltd., software busi-ness

Do

1993 Saltlake factory at Calcutta for manufacturing switchingsystems

Do

1994 Augmentation of Ahmedabad facility for Solar photovoltic

Do

1995 Joint Venture with Bharti Telecom Do

1996 New Medical Engineering Factory at Bangalore Do

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turing of business divisions. With the above changes, the reporting lineof different manufacturing plants also changed simultaneously. Withthe establishment of new factories, the company had made a lot ofchanges in manufacturing technologies. The product technology, a fewyears old, was always available to the company from its parent com-pany in the USA, i.e., Systems Corporation of USA. Similarly, in 1994,the product divisions were further subdivided to achieve operational ef-ficiency. The number of business divisions was increased to ten. How-ever, to be very precise about the wide range of above productbusinesses, the major business segments of Systems India Ltd., are inpower, communication, medical engineering, industrial automation,and railway and transport systems.

With the changing times, the culture of the Systems India Ltd., hasalso changed steadily. This change of culture had grown over severalyears of continuous mutual understanding between employees andmanagement. And to hold mutual understanding for long, it needs tomaintain a good industrial relation in the organisation. During the lastforty-five years, the industrial relation of the company was fairly good,except the incidents of intra-union rivalries. It has also been observedthat employees in the organisation do accept technological changes,when part of the benefit from technological changes are shared by them.For example, during the early eighties, Systems India Ltd., introducedcomputer-based production planning and material requirement plan-ning systems. All the staff members working on the above systems weregiven training and, thereafter, an increment in salary which motivatedthem to implement and actively use the above system. As Peter Wilde,the present President and CEO of Systems Corporation of USA stated,“Today–in a world marked by profound and continuing change–speed,flexibility, innovative strength and market responsiveness are crucialfor survival. We need creative people who are motivated and act. Whohelp us set world-class benchmarks. People who think in global termsand who are totally oriented to our customers. We are well on the way tomaking all this a reality as we position Systems to enter the next millen-nium with renewed strength, purpose and vision. Our commitment: In-novative enterprise with responsibility.” From all of the above informa-tion, it is felt that this organisation has some inherent culture to bringnew products and technologies. The company has been able to create anenvironment of understanding among employees and managers whereeveryone feels the importance of innovation. And this culture is so nur-tured, that the process of change continued in the organisation withoutinterruptions.


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RESEARCH METHODOLOGY

The entire research was carried out in four phases, and each phasehad a duration of six months each. The first phase was solely devotedinto exploratory studies. The second phase was based on operationalsurvey. The third phase was on action research. And the fourth phasewas on confirmation study. The objectives of conducting multi-layerstudies were (i) to obtain insight about the growth of culture and techno-logical changes and those which were prevalent in Systems India Ltd.,over the years, (ii) to collect valuable information from employees andofficials through direct interaction and critical observation, and arrive atvarious conclusions, (iii) to develop recommendations of those whichare relevant and acceptable or actionable, and finally, (iv) compare therelevant recommendations with the other partners (Larsen and Toubro,Jyoti Ltd., Crompton and Graeves Ltd.) who are also in the similar busi-ness in the Indian industry.

CASE STUDY 1:“ROLE OF STRATEGY IN TECHNOLOGICAL CHANGES”

After the independence of India, the demand for electrical energywent up steadily as many entrepreneurs in the country entered into thefield for setting up industrial units. There was an immediate urgent needto provide energy to large number of industries and to transform this ag-ricultural society into an industrialised nation. As the demand for en-ergy equipment went up, some of the companies which weremanufacturing the energy equipment, had to change their process ofmanufacturing. The Company–Systems India Limited–started manu-facturing switchboards in 1957 under the traffic noise of ElphistoneRoad Bridge, some 3 kilometres away from Mumbai Central Station.The switchboard is supply panel equipment through which electricalenergy is regulated. It contains some of the electrical equipment likeswitch-gear, switch fuse units, bus-bars, meters, etc. These are assem-bled in a sheet metal panel. Manufacturing sheet metal panels in earlierdays was a tedious time-consuming job and resulted in delay of deliveryof electrical panels to state electricity boards.

Growth of Domestic Market

As the demand of electrical energy went up, the company increasedits manpower and started working in two shifts to deliver the switch-


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board panels to the suppliers in time. In the year 1960, the company setup a new factory at Mahim in Mumbai to manufacture switch-gear, andin 1967, another factory in Kalyani near Calcutta to meet the demand ofthe eastern part of the country. Demands were just growing and thecompany was facing problems on deliveries. While competitors wereable to deliver at short notice, Systems India Ltd. was facing deliveryproblems. In their production analysis, they found that manufacturingtime of an average panel takes as much as 50 percent of their time formanufacturing switchboards. Therefore, they had to decide to changethe process of manufacturing panels from the conventional process ofcutting, punching, nibbling of various cut-outs for meter mounting,bending, welding, etc., to a semiautomatic process of coordinate punch-ing, bending and assembly which resulted in saving time. This action ofmanagement gave a slight relief to the delivery problem. However,growing demand for switchboards in the market forced Systems IndiaLtd. management to draw a new strategy to upgrade the manufacturingtechnology of panel manufacturing in the factory.

Strategic Plan and Implementation

During 1980, the company started losing a few businesses due tolong delivery time. The management of the company formed a strat-egy in 1981 to change the manufacturing technology for all panels.The company made a capital budget of fifty million Indian rupees inthe year 1982 to purchase an ‘Edel’ numerical control turret press tomanufacture the panel at a faster speed. Then they changed the paint-ing process from conventional liquid painting to a powder coating pro-cess. This strategic decision then resulted in improvement in qualityand some improvement in delivery, but demand of switchboards out-stripped the supply. In the year 1988, the company again invested an-other fifty million Indian rupees to purchase two ‘Traumatic’ CNCpunch presses and one Amada NC shearing machine to reduce themanufacturing time further. But there was no end to demand of en-ergy. As upkeep and maintenance costs of the machines went up, thecost of manufacturing panel boards also went up substantially. Thecompany improved the delivery position but started losing orders dueto the high cost of manufacturing. In the year 1994, the company soldtwo ‘Traumatic’ CNC punch presses and purchased one ‘Amada’CNC punching and one ‘LVD’ CNC bending machine. These actionsof management reduced the time of programming in CNC machines


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and the operator in these machines started working independently.However, despite all these, the country was still short of energy. In1998, the company could no longer invest to compete in the globalmarket. The company took a strategic decision to outsource the readypanels from the local vendors, who had similar machines and who hadthe flexibility of delivering panels in the shortest possible time. Thecompany is now in the market with sufficient orders in hand where itsquality, price and delivery are under control.

Future Outlook

The company was in a monopoly business during the sixties. Therealisation of improving quality, delivery and price came at a later stagein the early eighties when the company started losing orders to its new-est competitors. The technologies of other companies were no different.Therefore, considering the future of the business, the company finallytook a strategy to operate in the core sector of the business. Manufac-turing mechanical items was not the core business of the company. Thecore business of the company was power generation and power distri-bution. This strategic decision of the company started showing resultsin 1999, which the company thinks will be a success story for the newmillennium. Table 2 gives the short profile of organisation strategiesthat led to all technological changes.

CASE STUDY 2:“ROLE OF LEADERSHIP IN TECHNOLOGICAL CHANGES”

In India, medical engineering business is growing at an annual rate ofalmost 8% and different types of medical equipments are being manu-factured by different companies. Some manufacture X-ray machines,some make ultrasonic equipment and others CT scan, electro-cardio-gram and physiotherapy units. However, the multinationals in Indiaplay a very crucial role in medical engineering business. Almost twothirds of the medical engineering businesses are with multinationals,while one third are with local players.

The Company

Systems India Ltd. started manufacturing X-ray equipment in theyear 1957 at their Mahim factory in Mumbai, when there were very few


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players in the medical engineering field. The company started manufac-turing with a vertical X-ray machine where the X-ray picture of thechest could be taken and any fracture of the bone could be detected. In1965, the company started manufacturing hand-operated X-ray exami-nation tables for diagnosis of similar illnesses. Around 1970, the com-pany started a motor operated X-ray examination table with manuallyoperated screen frame by named ‘Extra,’ along with modern X-raytubes and high-frequency generators of different mil-ampere (µa) from10µa to 500µa to establish the correct diagnosis of the ailing patient. Inthe year 1980, the company started manufacturing motor-operatedX-ray examination tables with automatic screen frames with the name‘Ultra.’ This gave a new impetus in the field of medical engineering inIndia. In the year 1985, the company introduced multi-pulse generatorsfor the first time in the Indian medical industry. Earlier, all this equip-ment was imported from advanced countries of the world. However,during the mid-eighties, the company felt real competition in the field ofmedical engineering. Earlier, Philips, Hitachi, Pickers, and Toshibawere the multinational companies in the field of medical engineering.Out of these multinationals, only Philips and Systems Corporation(USA) had manufacturing facilities in India. Other multinationals usedto import their equipment to compete in the higher end of the products.At this time, Systems India Ltd., was the market leader in the medicalequipment business. Its parent company in the USA manufacturedhigher-end products of medical equipment. Then during the mid-eight-ies, one of the largest multinationals, International General Electric, en-tered this field in collaboration with Wipro Ltd. at Bangalore, tomanufacture standard and advanced medical equipment in India. Thecompany was named Wipro-GE Medical Systems Ltd. By the year1990, Wipro-GE replaced Philips, and took second position after Sys-tems India Ltd. Now Systems India Ltd. also started losing market share


TABLE 2. Presents a Role of Strategy in Technological Changes

Year Strategic Change of Manufacturing Technology

1955 Shearing Sheet metal, Drill and Nibble, Notch, Bend, Weld, Liquid paint, Assemble

1965 Shearing Sheet metal, Punch & Nibble, Notch, Bend, Liquid paint, Assemble

1975 Shearing Sheet metal, Coordinate punching, Bend, Liquid paint, Assemble

1982 Punching on ‘Edel’ NC Turret press, Shear, Bend, Powder coat paint, Assemble

1988 Punching on ‘Traumatic’ CNC Press, Shear on NC ‘AMADA,’ Powder coat, Assemble

1994 Punching on ‘Amada’ CNC Press, Shear on NC Amada, Bend on CNC ‘LVD,’ Powder coat, Assemble

1998 Outsourcing of Panels at reduced cost from local vendors who have similar technology

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of some of their products. Prominent among these were both the Extraand Ultra examination tables. The new situation in the market gave anew thinking to Systems India Ltd. management. At this time, its parentcompany in the USA (Systems Corporation) wanted to enter into Asianbusiness by procuring a new version of the motor-operated X-ray exam-ination table of Systems India Ltd., even though the existing business ofmotor-operated X-ray table of Systems India Ltd. introduced in theearly eighties, was on a declining stage of business in the Indian market.However, this offer of the parent company (Systems Corporation ofUSA) for procurement of the new motor-operated examination tablefrom Systems India Ltd. was considered as a considerable business op-portunity to Systems India Ltd. The Indian management considered thisas an immediate opportunity to expand the market.

Strategy to Introduce a New Product for the Asian Market

The company (Systems India Ltd.), on the advice of its principal in theUSA, engaged a highly qualified and competent non-resident Indian en-gineer, Dr. Dev Dutta, for the development of a new X-ray examinationtable for the Asian market. Dr. Dutta arrived in India with the representa-tive of Systems Corporation of USA, Mr. Tony Baker on January 20,1996. A team was formed with around ten people picked up from the dif-ferent functions of the company (Systems India Ltd.): design, marketing,service, manufacturing, logistics and finance. The team started workingunder the guidance of Dr. Dutta. A few customer sessions were carriedout in different metros of the country as well as in Malaysia, Thailand andVietnam. The customers were general physicians, radiologists, and or-thopaedic surgeons. The idea to do the customer sessions along with theteam were to obtain insight from the customers, as to what are the needsof the customers. After every customer session, Dr. Dutta went back tothe USA for his other assignment, leaving the entire project to the team.While it took one year for the team members to understand customer’sneed as well as want out of the product but it took again a lot of time toconceptualise the same. Even the hand sketches for the final drawingscould not be made. Dr. Dutta approached the Systems India Ltd. manage-ment to ask for further customer sessions in other parts of the country.Management felt that too many customer sessions would cost additionalexpenditures, and the team should go ahead with a prototype workingwith whatever data had been gathered. Dr. Dutta went back to the USAfor his usual tasks. During April 1997, Mr. Tony Baker, a representativefrom Systems Corporation of USA, came to see the development of the


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new product. He was very upset as nothing had been done for developingthe product. The general manager-product sales was the leader of theteam. He had very little time to spend and even though he used to attendmeetings, he had left the entire work of new product development in thehands of the team. Dr. Dutta came back from the USA in June 1997. Hewas not very happy either with the company or with the developmentalwork, because neither his advisory fees were paid in time nor was theteam able to bring new product even after 18 months of developmentalwork. As the company in the USA was not getting proper feedback, therepresentative from the parent company (Systems Corporation of USA),Mr. Tony Baker, once again came to see the progress in July 1997. Hewas again very upset with the slow pace of development. He called for ameeting with the team and, after continuous discussion with them, he fi-nally decided to dissolve the team. One of his observations was that thecompany had already spent an amount equivalent to three hundred thou-sand US Dollars. And if the project moved in this fashion, the total cost ofthe project would be thirty million Indian rupees to Systems India Ltd.,which would not be economically feasible at all, to sell the product.Hence, he advised the management of System India Ltd. to abandon theproject.

Future Outlook

The demand for existing motorised X-ray examination tables of theSystems India Ltd., further went down to a level of fifty percent. Thecompany started importing another version of X-ray examination tablefrom its parent company in the USA to counter the competition. But thetables imported from the US were quite costly and there were few tak-ers. By early 1999, Wipro-GE Medical Systems replaced Systems IndiaLtd. into the number two position. So the organisational leadershipcould not play an important role in technological changes. Table 3 givesthe account of a culture of leadership in technological changes.

CONCLUSION

The inference drawn from these case studies was further comparedwith a few other divisions in Systems India Ltd., and with other compa-nies in similar industries through questionnaires and interviews with thecompany employees and officials including key persons, i.e., at thelevel of president, director, vice president, and general manager. These


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other partner companies were Larsen & Toubro Ltd., Jyoti Ltd., andCrompton and Greaves Ltd. After analysing these comparative studies,it was found that there is close similarity of relationship between cultureand technological changes in Systems India Ltd. and its three partnercompanies.

REFERENCES

Bainbridge, C. (1996)–Designing for Change A Practical Guide to Business Transfor-mation. Chichester, England: John Wiley & Sons Ltd.

Boddy, D. & Buchanan, D.A. (1986)–Managing New Technology. Oxford: Basil &Blackwell Ltd.

Burnes, B. (1992)–Managing Change. London: Pitman.Carnel C.A. (1982)–The Evaluation of Organisation Change. Great Britain: Gower

Publishing Company.Crompton and Greaves–Annual Reports and Accounts 1996-97–(July) Mumbai, Pub-

lished by Crompton and Greaves Ltd.Hall, W. (1995)–Managing Cultures–Making Strategic Relationships Work. Chichester:

John Wiley.Howard, R. (1990)–The Learning Imperative–Managing People for Continuous Inno-

vation. Boston, Harvard Business School.Jones, G. (1986)–British Multinationals: Origin, Management and Performance. Ver-

mont, USA: Gower.Larsen & Toubro Ltd.–Annual Report 1995-96, 1996-97, Mumbai, Published by

Larsen & Toubro Ltd.Leonard-Barton, Dorothy & Kraus, William, A. (1986)–Implementing New Technol-

ogy in Planning and Managing Change. London: Harper & Row.


TABLE 3. Presents a Culture of Leadership in Technological Changes

Sequence of Product Development( X-ray Examination Table )

October ’95 Strategy formulation of a new X-ray examination table for Asian Market

January ’96 Appointment of a consultant and formation of a team

February ’96 Customer sessions at Delhi, Calcutta and Mumbai

March ’96 Customer sessions at Madras, Kuala Lumpur

June ’96 Review of the project with the customer feedback

September ’96 Customer sessions at Hanoi, Bangkok

February ’97 Major review of the project

April ’97 Review of the project by the representative Mr. Tony Baker of Systems Corp. USA

July ’97 Team was dissolved and the project was abandoned

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Nag, G.C. (1999)–Relationship of Organisational Culture and TechnologicalChange–A Longitudinal Study of Siemens (India) Ltd. A research thesis submittedto Devi Ahilya University, Indore, India.

Pashmore, W.A. (1994)–Creating Strategic Change–Designing the Flexible High Per-formance Organisation. New York: John Wiley.

Rao, A.S. (1994)–Management of Technology Change. Delhi. Global Business Press.Rydz, J.S. (1986)–Managing Innovation from the Executive Suite to the Shop Floor.

Massachusetts: Harvard Business School.Sadler, P. (1995)–Managing Change. London: Kogan Page Ltd.


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case studies of technological change and organisational culture

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