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MANAGING CHANGE AND LEADERSHIP
CHANGE MANAGEMENTIndividual Assignment
(BSB20134-M)
HAND OUT DATE-17/10/2011
HAND IN DATE-16/12/2011
Submitted To: - Submitted By:-Ms.Amita Pasricha Prerna shree (Lecturer) (PTM1101002) (MBA 1st year)
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CERTIFICATE
This is to certify that is “PRERNA SHREE” Roll No. PTM 1101002 of MBA stream
had completed her assignment on “MANAGING CHANGE IN LEADERSHIP” on 16
DECEMBER 2011.
Submitted To: - Submitted By:-Ms.Amita Pasricha Prerna shree (Lecturer) (PTM1101002) (MBA 1st year)
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ACKNOWLEDMENT
I am very Thankful to Ms. Amita Pasricha to providing such opportunity to prepare such
type of assignment which helped me to enhance my skills. I had a lot of difficulty during my
assignment but she guided me continuously and also helped me out to solve them. I would
like to thank to A.P.I.I.T SD INDIA for giving me an opportunity to work on this project. At
last but not the least I would like to thank to everyone who helped me out to accomplish this
project.
Warms & regard
Prerna shree
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TABLE OF CONTENTS
Sr. No. Title Page No.
1.Executive summary
5
2. Introduction 6
3. Change focus of ICICI 8-10
4. Change management process at ICICI and BOM merger 11-13
5. Importance of Leadership 14-19
6. Conclusion 20
7. Reference 21-22
ASSIGNMENT 1: CHANGE @ ICICI
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EXECUTIVE SUMMARY
This assignment helps us to know about the change management and role of leader or
manager to initiate change which we will use in our day to day life. Change management is
necessary because it evaluates the effectiveness of our management skills. In this research I
have shown effectiveness of Mr. Kamath in ICICI where he used his management skills.
These skills plays an essential role when an individual working in an organization have
reflected his progress time and further development of an organization which needs to
become a successful qualified manager.
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INTRODUCTION
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution
and was its wholly-owned subsidiary. ICICI Bank is India’s #2 banks. But only after state
bank of India and its largest private bank, with some 2500 branches and 6000 ATMs national
wide. It also has locations in about 20 other countries. ICICI's retail banking group offers
lending and deposit services to small businesses and individuals; larger businesses are served
by the corporate banking group, which offers finance services and treasury products. The
rural and government banking unit offers micro-loans and agricultural banking. Foreign
operations, as well as services related to international trade finance and expatriate Indians,
fall under the international banking group. Other offerings include online banking, asset
management, and insurance. The chair man of ICICI is kundapur v. (k.v) kamath.Managing
director and ceo is Mr. Chandra D.kochhar.executive director and cfo is N.S kannan. It is a
financial sector and industry of foreign banks.
VISION STATEMENT:-
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To be the preferred bank for total financial and banking solutions for both corporate and
Individuals.
MISSION STATEMENT:-
Perfection in Power.
THE TOP COMPETITORS OF ICICI BANK ARE:-
Canara Bank.
Punjab National Bank.
State Bank of India.
OBJECTIVE:-
To assist in the creation, expansion and modernization
To encourage and promote the participation of private capital.
To encourage and promote private ownership.
STRATEGY:-
Focus on Underserved Segments
ICICI Bank has taken up specific initiatives to ramp up financial literacy as well as
Intermediation to the underserved and under banked segments in both rural and urban.
PART- A
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THE CHANGE FOCUS OF ICICI TO BECOME A ONE STOP SHOP
FOR FINANCIAL SERVICE NECCESSITATED THE CHANGE IN
THE ORGANISATION CULTURE AND GOALS.ANALYZE THE
CHANGES IMPLEMENTED BY KAMATH IN MID-1990S AND
COMMENT BRIEFLY ON THE NECESSITIES AND EFFICIENCY OF
THESE CHANGES.
Change management:-The process of maximizing performance throughout the People
Soft implementation by minimizing disruption and accelerating the acceptance of change.
This is being accomplished at UMass through four change management work streams:
Training, Communications, Liaison Program/Site Readiness, and Sponsorship. It is a methods
and processes that assist individuals in adjusting constructively to new systems, procedures,
processes, workflow, organizational relationships and other differences as they occur. It is a
Process of planning, controlling, and managing enterprise system changes.
In 1996, when kamath took charge over ICICI, he introduced massive changes in the
organization structure. He wanted to charge the development bank into a market driven
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financial organization conglomerate. He restructured the organization (basically removal of
atrophy and status quo).
He brought the following changes in an organization
1.‘Infrastructure group (IIG)’ ‘oil and gas group (O&G)’ – The first change was initiated
within the organization by forming infrastructure group (IIG), oil & gas group (O&G),
planning and treasury department and the structured products group.
Necessity:-This was necessary because the leading practices were quite different for all of
these groups. He picked the efficient people from various departments for these groups.
Efficacy: - These groups can work effectively but internally the strategy was not effective
because the employees who were not a apart of these group did not felt their importance
within the organization diminished.
2. New technologies - He had implementated new technologies like Atm's, internet banking
and software (oracle) in organization.
Necessity: - To introduce flexibility in the organization to increase its ability to respond to
market changes.
Efficacy: -After implementation of these technologies the organization changed – from a
development bank more to that of a market driven financial conglomerate.
3. Customer oriented - The next move by Kamath was to focus its operations much more
around its customers i.e. they wanted to be customer oriented. For this ICICI set up 3 new
departments:
Major client group.
Growth client group.
Personal finance group
Necessity: - It was necessary to make such changes because previously the customers had to
approach the relevant departments separately which was ultimately time consuming. This
step also resists the customers to move to other competitors.
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Efficacy: - Now ICICI wanted to provide almost every financial service, separating the
customer service people from the product development groups. The MCG & GCG person
understood the clients need and possessed the required.
4. Better communication – He created Better environment of communication between the
top level management to employees and customer to representative.
Necessity: - It had much better structured business that allowed it to take advantage of being
a Universal bank.
Efficacy: -Now the customer would communicate to his representative group i.e. MCG &
GCG who understand the client need and employees can communicate to the top
management who help them to identify the required department to do the job.
5. Appraisal - He made 360-degree appraisal system through which an individual was
assessed by his peers, seniors and subordinates.
Necessity: - It helped the organization to identify the individual performance of employees
and also helped for work comparison with other employees.
Efficacy: - Now the employees can work in the organization wherever they required or
wherever they fit for specific job.
6. Tie up: -ICICI tied up with JP Morgan of the US.
Necessity: - To forms an investment banking company, ICICI securities limited.
Efficacy:- ICICI was able to diversify into different forms of asset financing (leasing, asset credit, deferred credit) as well as financing for non project activities
7. Reconstructed its business: - ICICI reconstructed its business based on the
recommendations of Mc Kinsey& Co in 1998.
Necessity: - It had the vision of becoming a universal bank.
Efficacy: - It had much better structured business that allowed it to take advantage of being a
Universal bank.
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PART- B
COMPARE AND CONTRAST THE CHANGE MANAGEMENT
PROCESS AT ICICI INITIATED AFTER KAMATH BECAME THE
CEO WITH THE ONE FOLLOWING THE ICICI-BOM MERGER.
ALSO EXPLAIN THE RATIONALE BEHIND THE EMPLOYEE
RESISTANCE IN BOTH THE CASES.
A Change Process, or Change Management Process, is a set of procedures that help teams to
control change effectively. It's not that you have to prevent change from happening; it's how
you manage change once it occurs that really matters. This is where a Change Process is
invaluable. The Change Process allows you to record change requests, and review and
approve those requests, before implementing them. This Change Process makes change
management easy.
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K.V Kamath wanted to initiate change in an ICICI so he has gone through from this process.
It helped him to implement the change very efficiently. In May 1996, K.V. Kamath (Kamath)
became CEO of India's leading financial services company Industrial Credit and Investment
Corporation of India (ICICI). After taking charge, he introduced massive changes in the
organizational structure and the emphasis of the organization changed - from a development
bank mode to that of a market-driven financial.
Comparison and contrast of PRE AND POST BOM merger:
ICICI MERGER(when Mr. kamath became CEO)
1. ICICI reorganization the perception of their
diminished importance was not addressed (when they
picked people for the new group creation IIG, O&G
etc.)
2. ICICI never conducted behavioral pattern
studies when implementing changes pre- BOM
merger.
3. ICICI did not established HR blue print before the
merger to ensure a smooth integration of Human
resources.
4. Before merger there were no clear communication
channels to avoid any kind of wrong message.
5. Training programs were not conducted to upgard
skills of employees before merger.
POST- BOM MERGER
1. BOM merger the company ensured that the
importance of employees was preserved by upgrading
the technological standards of the BOM banks to that
of ICICI ones.
2. In this case post-BOM merger stages they
conducted these studies to understand the fears and
apprehension typically experienced by their
employees.
3. A clear HR blue-print was established to ensure a
smooth integration of Human resources after merger.
4. After merger there were a lot of involvement of
employee participation and decrease resistance to
change. A clear communication channels were
established by management to avoid any kind of
wrong messages.
5. Training programs were conducted to upgrade
skills of the employees after merger.
Effective management of the people dimension of change requires
managing five key goals that form the basis of the ADKAR
model:
1. Awareness of the need to change
2. Desire to participate and support the change
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3. Knowledge of how to change (and what the change looks like)
4. Ability to implement the change on a day-to-day basis
5. Reinforcement to keep the change in place
Rational behind ICICI merger resistance toward change:-
1. Economic factor: - Employees were dependent upon productivity. They had fear that
if productivity will low then their pay scale will also come down.
2. Habit: - To cope up with the complexity of life each one rely on habits like in ICICI
atrophy was deep rooted in the organization. As they encountered with change, they
resist to it as per their tendency to respond in their accustomed way.
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3. Fear of unknown: - They had fear from unknown and change substitute’s ambiguity
and uncertainty.
4. Inconsistency: - They did not want any inconsistency in work or in organization.
5. Conflict: - conflict may arise in group or between the management people and
employees.
6. Technological Factors:-The technological factors represent the conditions created by
man which have a profound influence on his life. They had fear that if there is change
in technology then they need to put afford for training and seminars.
7. Cultural Factor:-
Cultural Factor influences the direction and character of technological change Culture not
only influences our social relationships, it also influences the direction and character of
technological change.
Rational behind BOM merger resistance toward change:-
1. Security- Employees had feared to lose their job. BoM employees feared that their
positions would come in for a closer scrutiny.
2. Authority- Employees felt that their responsibilities were not being suitably upgraded and
they were also not being paid fairly.
3. Self-satisfaction – They were not satisfied with change.
4. Sense of loss and Confusion
5. Fear of letting-go-off the experience which led to success in the past
6. High uncertainty, Low stability, high emotional stress.
PART-C
‘THE VERY ESSENCE OF LEADERSHIP IS THAT YOU HAVE TO HAVE
VISION.’ WITH REFERENCE TO THE ABOVE CASE, ENUNCIATE THE
IMPORTANCE OF IMPORTANCE OF LEADERSHIP IN MANAGING CHANGE IN
THE ORGANIZATION AND JUSTIFY YOUR REASONING.
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“The very essence of leadership is that you have to have vision”. According to this
statement a leader must have a good vision. If a leader does not have vision, then he/she
cannot be a successful leader. So, this is one of the important characteristics of leader.
Leadership:-
It is defined as “Process of social influence in which one person can enlist the aid and
support of others in the accomplishment of a common task.”
Leadership is an important function of management which helps to maximize efficiency
and to achieve organizational goals. Similarly Kamath was also a successful leader who has
increases the efficiency of ICICI.
Importance of Leadership
Initiates action- Leader is a person who starts the work by communicating the policies and
plans to the subordinates from where the work actually starts.
Motivation- A leader proves to be playing an incentive role in the concern’s working. He
motivates the employees with economic and non-economic rewards and thereby gets the
work from the subordinates.
Providing guidance- A leader has to not only supervise but also play a guiding role for the
subordinates. Guidance here means instructing the subordinates the way they have to perform
their work effectively and efficiently.
Creating confidence- Confidence is an important factor which can be achieved through
expressing the work efforts to the subordinates, explaining them clearly their role and giving
them guidelines to achieve the goals effectively. It is also important to hear the employees
with regards to their complaints and problems.
Building morale- Morale denotes willing co-operation of the employees towards their work
and getting them into confidence and winning their trust. A leader can be a morale booster by
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achieving full co-operation so that they perform with best of their abilities as they work to
achieve goals.
Builds work environment- Management is getting things done from people. An efficient
work environment helps in sound and stable growth. Therefore, human relations should be
kept into mind by a leader. He should have personal contacts with employees and should
listen to their problems and solve them. He should treat employees on humanitarian terms.
Importance of leadership in change management
(MR.Chadha acted as democratic leader in ICICI)
Confident:-
This could be the most important characteristic of a leader. If you don’t believe in yourself
and the success of your Venture, no one else will. Show others that you are dedicated,
intelligent, and proud of what you are doing.
Co-ordination- Co-ordination can be achieved through reconciling personal interests with
organizational goals. This synchronization can be achieved through proper and effective co-
ordination which should be primary motive of a leader.
Focused:-
Constantly remind yourself and the group of your Venture’s goals and mission. If you stay on
track and keep others on track, the team will stay motivated and be more productive. As
leader of the group, it is important that you schedule time to meet with your Venture Team to
establish and check-in about the goals you hope to achieve.
Organized:-
A leader can set the tone for the team. A leader who is organized helps motivate team
members to be organized as well.
Available:-
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As a leader, you’re responsible for a lot and you’re probably going to be very busy at times.
However, you still need to find time to talk with your team. A good way to do this is to set
frequent group meetings, so that no question or concern goes too long without attention.
Include others:-
A leader should not do all the work. Doing everything yourself is a poor use of time and
prevents your Venture from growing. Instead, a leader should work with his/her teammates
and learn how to delegate responsibility while being mindful of everyone’s interests, goals,
and strengths.
Decisive:-
Mr.Chadha involved listening to the people around him, remember that they are not always
going to be able to reach a compromise.
Required at all levels- Mr. Chadha was involved at all levels of management. In the top
level, it is important for getting co-operation in formulation of plans and policies. In the
middle and lower level, it is required for interpretation and execution of plans and
programmers’ framed by the top management.
CONCLUSION
The ability of organizations to manage change effectively has become more important
because of the rapid advances in technology and the increasing uncertainty and risk
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associated with the business environment. Managing change requires flexibility, good
planning, an effective decision making system and an efficient management information
system, as well as effective communication systems and channels. Managers must show
leadership, have behavioral knowledge, especially with regards to the management of teams,
demonstrate analytical skills in basic economic reasoning, be agents of change, proactive
rather than reactive; be able to tolerate ambiguity and uncertainty, and understand why
change is so often perceived as threatening. The possibility of change tends to provoke
resistance among the employees that the change will affect. This is due to a very natural fear
and mistrust of the unknown. This resistance will manifest itself indifferent ways, ranging
from outright refusal to cooperate through to a covert undermining of proposals
REFRENCES
Books
.A. Church and W. Burke,T 2005, Practitioner Attitude about the Field of
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Organization Development,Greenwich, JAI Press.
Burnes, B. , T 2004, Managing Change (4th edn), Harlow: Pearson Education.
Burnes, T. and Stalker, G. M. , T 1961, The Management of Innovation, London:
Tavistock.
Carnall, C.A., T 2003, Managing Change in Organizations (4th edn), Harlow: Pearson
Education.
D. Goleman, T 1995, Emotional Intelligence, Bantam Books, New York.
Furze, D. and Gale, C., T 1996, Interpreting Management:
Exploring Change and Complexity, London: Thompson International.
Hayes, J., T 2002, The Theory and Practice of Change Management,
Chippenham: Palgrave
M. McCaskey, T 1997, Framework for Analyzing Work Groups, Harvard
Business School Boston.
R. Walton, T 1973, Ethical Issues in the Practice of Organization
Development,Harvard University Graduate School of Business Administration,
Boston.
Journals Abraham Zaleznik, T 1992, Managers and Leaders: Are They Different?,Harvard
Business Review
C. Lundberg and C. Young, A Note on Emotions and Consultancy, Journal of
Organization
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MANAGING CHANGE AND LEADERSHIP
John Mathieu, M. Travis Maynard, Tammy Rapp, and Lucy Gibson, T 2008 Team
Effectiveness: A Review of Recent Advancements and a Glimpse into the Future,
Journal
Management.
John P. Kotter, T 1990, What Leaders Do, Harvard Business Review.
M. Lacey, T 1995, Internal Consulting: Perspectives on the Process of Planned
Change,
Journal of Organizational Change Management.
Michelle Marks, M. Sabella, C. Shawn Burke, and Stephen Zaccaro, T 2002, The
Impact
Of Cross- Training on Team Effectiveness, Journal of Applied Psychology.
Manz and Sims,T 2007, The Effects of Team Diversity on Team Outcomes:
A Meta- Analytic Review of Team Demography, Journal of Management.
WEBSITES:-
Available from:www.icicibank.com/,[ accessed -15-12-2011]
Available from: https://infinity.icicibank.co.in/BANKAWAY?[accessed -15-12-2011]
Available from:https://infinity.icicibank.co.in/web/services/jsp/Locateus.jsp
www.icicidirect.com/ [accessed -15-12-2011]
APPENDIX
ADKAR MODEL:-
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The image below shows the connection between the change management tools developed in
the organizational change management process and the phases of individual change described
by the ADKAR model. This picture is the essence of effective change management and is the
core of Prosci's change management methodology.
Connecting organizational and individual change management
The democratic leadership:-
The democratic leadership style is a very open and collegial style of running a team. Ideas
move freely amongst the group and are discussed openly. Everyone is given a seat at the
table, and discussion is relatively free-flowing. The democratic leadership style means
facilitating the conversation, encouraging people to share their ideas, and then synthesizing
all the available information into the best possible decision. The democratic leader must also
be able to communicate that decision back to the group to bring unity the plan is chosen.
When situations change frequently, democratic leadership offers a great deal of flexibility to
adapt to better ways of doing things. Unfortunately, it is also somewhat slow to make a
decision in this structure, so while it may embrace newer and better methods; it might not do
so very quickly.
1. Democratic leadership style can bring the best out of an experienced and professional
team. It capitalizes on their skills and talents by letting them share their views, rather than
simply expecting them to conform.
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2.If a decision is very complex and broad, it is important to have the different areas of
expertise represented and contributing input – this is where democratic leader shines.
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