project report - role of communication in effective change management (a case study of godrej group)
TRANSCRIPT
Role of Communication in Effective Change Management
Role of Communication in Effective Change Management
ROLE OF COMMUNICATION IN EFFECTIVE CHANGE MANAGEMENT
Abstract
A plethora of theory, research and
practice in change management has
evolved considerably over decades,
and experienced a major
transformation in form and function
amid a rapidly changing environment.
Oftentimes, many organizations with
radical change transition sent angle
themselves in the mess of chronic
management impediments. In recent
years, the role of communication
strategies emerges to solve the puzzle
of the change upheaval by providing a
comprehensive mechanism to
facilitate a change process. Based on
a case study of Godrej Group – brand
and business status introduction, this
research has two aims. First, a
conceptualized framework of the
integrated role of communication
strategies formulation in conjunction
with change management process is
mapped out. Also, it intends to
investigate some depth of understanding of how the executives at different management levels perceive
the internal communication process surrounding the change in the Godrej Group. Second, such a
framework has been theoretically explored and empirically demonstrated to examine the process of
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Role of Communication in Effective Change Management(A Case Study of Godrej Group)
Research Paper
Rashmi RawatPGD in Strategic Human Resource Management (PGDSHRM)Department of Business AdministrationFaculty of CommerceThe Maharaja Sayajirao University of Baroda17/01/2012
Role of Communication in Effective Change Management
strategic formulation of corporate communications in accordance with diverse phases of changes to the
Godrej Group. The research paper is attributable to a double-edged management contribution. It can
reflect a new construct of academic theories and suggest a gap which the firm may leave unaddressed in
the first place. Due to time and space constraints, a number of relevant issues are selected for succinct
discussion on a basis of theoretical and practical perspectives. Last but not least, implications,
limitations, and further research are discussed.
The structure of the paper incorporates six chapters addressing both foundational grounds of theories and
practices. This chapter is particularly devoted to an introduction of the study rationale on change, change
management, issues of change management. Chapter Two features a review of literature on the
fundamental concepts of communication strategies and change management processes. For Chapter
Three, the Godrej Group Case background, together with significant findings from the fieldwork, reveals
the underpinning reasons of which the brand and business status changes are expedited. The key findings
are derived from an analysis of the secondary data. Moreover, the obtained findings attempt to answer
the author’s questions regarding the purpose of the research. A conceptualized framework of the study is
thereafter developed. Chapter Four includes in-depth discussions about the findings pertaining to the
literature. Last but not least, Chapter Five comprises concluding remarks, implications and limitations,
and further research.
Keywords
Change Management, Effective Communication, Role of Communication, Case Study of Godrej Group
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Role of Communication in Effective Change Management
Letter of Submission
Ms. Rashmi Vijay Kunwar Singh Rawat Examination Seat Number. 38 PG Diploma in Strategic Human Resource Management Faculty of Commerce, The M S University of Baroda Vadodara-390 005
Date: 12/01/2012
To,
The Course DirectorPG Diploma in Strategic Human Resource Management Centre for PG Studies in Commerce Deep Building Faculty of Commerce The M S University of Baroda Vadodara-390 005.
Sub: Submission of Project Report Entitled “Role of Communication in Effective Change Management”
Sir,
As desired, I am pleased to submit herewith the Soft Copy [CD] and a Hard Copy of the Project Report
entitled “ROLE OF COMMUNICATION IN EFFECTIVE CHANGE MANAGEMENT [A Case Study
4
Role of Communication in Effective Change Management
of GODREJ GROUP]” as a partial fulfillment for the award of for PG Diploma in Strategic Human
Resource Management to our esteemed The M S University of Baroda for your perusal and necessary action
please.
Thanking you,
Yours faithfully,
(Ms. Rashmi Rawat)
Enclosure: As Above
THE M S UNIVERSITY OF BARODA
FACULTY OF COMMERCE
CERTIFICATECERTIFICATEThis is to certify that Ms. Rashmi Rawat (Exam Seat This is to certify that Ms. Rashmi Rawat (Exam Seat
Number. 38)Number. 38)
of of
PGDSHRM PGDSHRM
(First Semester: 2011 – 2012) (First Semester: 2011 – 2012)
has satisfactorily completed her project work onhas satisfactorily completed her project work on
““ROLE OF COMMUNICATION IN EFFECTIVE CHANGE MANAGEMENT
[A CASE STUDY OF GODREJ GROUP]”
forfor
Partial fulfillment of the degree ofPartial fulfillment of the degree of5
Role of Communication in Effective Change Management
Post Graduate Diploma in Strategic Human ResourcePost Graduate Diploma in Strategic Human Resource
ManagementManagement
ofof
The M.S.University of Baroda.The M.S.University of Baroda.
(Mr. Kalpesh Purohit) (Prof. Parimal H. Vyas)
Project Guide Course Director (Ms. Rashmi Rawat)
Acknowledgements
This report could not have been completed without the ideas, encouragement,This report could not have been completed without the ideas, encouragement, cooperation, and assistance of numerous individuals. First, and foremost, mycooperation, and assistance of numerous individuals. First, and foremost, my
project guide Mr. Kalpesh Purohit, has been an inexhaustible source of advice andproject guide Mr. Kalpesh Purohit, has been an inexhaustible source of advice and knowledge not only throughout the completion of the research project but alsoknowledge not only throughout the completion of the research project but also
throughout my entire PGDSHRM Program at the Centre for PG Studies, Faculty ofthroughout my entire PGDSHRM Program at the Centre for PG Studies, Faculty of Commerce,Commerce, The Maharaja Sayajirao University of Baroda.The Maharaja Sayajirao University of Baroda.
I owe a great debt of gratitude to Dr. Parimal Vyas, Director of Centre for PGI owe a great debt of gratitude to Dr. Parimal Vyas, Director of Centre for PG Studies, Faculty of Commerce, , who have been instrumental in facilitatingStudies, Faculty of Commerce, , who have been instrumental in facilitating
accessibility to the institution and providing necessary information at the outset ofaccessibility to the institution and providing necessary information at the outset of the project. Additionally, their comments have directed my critical attention tothe project. Additionally, their comments have directed my critical attention to
the theories and thinking that are the foundation of case research in changethe theories and thinking that are the foundation of case research in change management.management.
Finally, I am profoundly grateful to my parents, family members, and friends forFinally, I am profoundly grateful to my parents, family members, and friends for their support and understanding during this intensive challenging research projecttheir support and understanding during this intensive challenging research project
and throughout my post graduation career.and throughout my post graduation career.
6
Role of Communication in Effective Change Management
Certificate of Originality
This is to certify that this project Report entitled "Role of
Communication in Effective Change Management ( A Case
Study on Godrej Group)” which is to be submitted to the
Course Director, PG Diploma in Strategic Human Resource
Management, Faculty of Commerce, The M S University of
Baroda has been prepared by Ms. Rashmi Rawat,
Examination Seat Number.38) in partial fulfillment of
requirement for the PG Diploma in Strategic Human
Resource Management.
She has carried out this work under my personal
supervision and guidance. The work is an original one and
has not been submitted earlier to this university or to any
other institution / organization for fulfillment of the
requirement of a course or for award of any other Degree /
Diploma / Certificate Course.
7
Role of Communication in Effective Change Management
(Mr. Kalpesh Purohit) (Ms. Rashmi Rawat)
Project Guide Student
Table of Contents
Chapter I Introduction
Chapter II Literature Review: Theoretical Perspectives
2.1 Change Management Theories
2.2 Communication Strategy Theories
Chapter III Case Study
3.1 Case Overview
3.2 Issues and Observations
Chapter IV Discussions
4.1 Practical Views of Change Management
4.2 Communication Strategies Reinvigorated
4.3 Integrative Communication Strategies in Change Process
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Role of Communication in Effective Change Management
Chapter V Conclusion and Further Research
5.1 Concluding Remarks
5.2 Implications
5.3 Research Limitations
5.4 Further Research
Bibliography
CHAPTER I
Introduction
“It is not the strongest of the species that survives, nor the most intelligent; it is the one that is most
adaptable to change“
- Charles Darwin (1808-1892)
In a highly competitive environment, the dynamism for changes in any large organizations becomes
indispensable for greater success and excellence. Most business leaders and top executives in various
industries have been vigilant toward the modification of business strategies along with “effective and
continuous” changes up to reach their potential. In addition, nowadays, pressures for change are not
merely stemmed from the organizational elements but also the international forces galvanized by the
notion of globalization, technology, and competition. Therefore, revolutionary changes have been
prioritized as one of the most important agendas needed for discussion in a parallel relationship with other
management issues.
Organizational scholars have long acknowledged the importance of communication processes in
explanations of organizational change (Lewis and Seibold, 1996; Rogers, 1995; Fairhurst and Wendt,
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Role of Communication in Effective Change Management
1993). Nonetheless, Lewis (2000a) argues that the systematic research about the effectiveness of
communication strategies about change is sparse. Connected to that, though the various research on
change management has been produced in reflection of diverse organizational angles, the communication
strategy, which serves as a critical instrument in facilitating changes, falls short of academics’ attention.
Additionally, the extant literature has insufficiently provided a wide range of case examples, which may
broaden horizons of change on real business circumstances. If changes are expected to occur over a long
period and are likely to involve high ambiguity at some points, then this should be clearly communicated
in advance in order to avoid potential loss of momentum, disappointment, and cynicism in certain groups
of employees (Heracleous and Langham, 1996).
From the aforementioned aspects, it triggers the author’s interest to conduct research on how the
communication strategies help effectively facilitate change management processes, especially in a large
organization. Since this integrative study of the subjects is under researched, an exploratory case
approach is considered an appropriate tool to be employed on the basis of empirical research
methodologies. In terms of the case selection, Godrej Group proves to be an intriguing case of an
organization in transition where both change management and communication strategy theories play
major roles in bringing out successful change. Of the voluminous issues of changes within Godrej Group,
the new brand and business status introduction has received much attention from both internal employees
and external stakeholders but not been yet well researched. Basically, it has undergone some extensive
changes on the purpose of image improvement, particularly in the international market. Owing to some
constraints, the research project in fact tends to focus on how the senior managers generally perceive the
internal communication in light of changes within Godrej Group and, thereafter, how the communication
strategies are formulated so as to enhance the change management process.
In relation to that, the first research question aims to investigate some depth of understanding of how
senior managers at different management levels perceive the internal communication process surrounding
the change in the Godrej Group and the strategies they formulate to respond to change. From this initial
question, a fundamental ground of the critical inquiry tends to be addressed in the first place, thereby
leading to a further quest asserted in the following question. The nature of the second question is to
examine the process of strategic formulation of corporate communications in accordance with diverse
phases of changes to Godrej Group.
Once synonymous with locks and safes today it has presence in FMCG, consumer electronics,
engineering, IT and other fields. Safely ensconced in the protective environment of the license raj, the
liberalization of 1991 and the ensuing challenges from the MNCs provided yet another stimulus for
change. The company shed its image of a closely held family business and moved from a family-owned
family managed to family- owned professionally managed organization. The movement has been gradual
and marked with a number of hindrances. This can be attributed to the organizational inertia which tries
to maintain the status quo. 10
Role of Communication in Effective Change Management
The two major companies of Godrej group – Godrej & Boyce and Godrej Industries Limited,
have sea change of difference in organizational culture and focus areas. While, Godrej & Boyce
continues to focus on consumer, industrial and office equipment products, Godrej Industries
Limited is more dynamic and focuses on range of sectors including FMCG, retailing, food, IT, real
estate, etc. It gives a lot of independence to its affiliate companies and subsidiaries in decision-making.
However, the control of Godrej family exists with family members having full control or as board
members in some of the companies. The company had other shares of troubles as well, for
instance unsuccessful partnership with P&G.
Godrej has since 1990 deliberately undertaken a process of self-improvement. The main problem faced
by the group in 1991 was that it was getting too bureaucratic with slow pace, getting bogged down in
routine matters, too many slow-moving products and a reluctance to do away with old practices.
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Role of Communication in Effective Change Management
CHAPTER II
Literature Review
In this chapter, voluminous streams of literature on change management and communication strategy are
reviewed. Though both issues have been extensively researched and empirically demonstrated in the
organizational level, many extant studies have left an integrative pattern of those constructs unheeded,
particularly on how communication strategies are formulated to enhance the change efforts. Not only are
some theoretical aspects of communication and change processes presented, but certain case examples
also are illustrated to mirror their practicability.
The outline of the literature review is divided into two main sections: change management theories and
communication strategy theories. In each section, a foundational ground of theories aims to provide the
comprehensive evolution of the constructs to be studied in this research.
2.1 Change Management Theories
2.1.1 Definition of Changes
Prior to delving into the complexity of change management, it is imperative to highlight the fundamental
definition of changes, including organizational change, to seek for a common standpoint. Burnes (2000)
depicts that change is a multi-level, cross-organization process that unveils an iterative and messy fashion
over a period of time and comprises a series of interlocking projects. Berger (1994: p. 7) defines change
management as “the continuous process of aligning an organization with its marketplace and doing it
more responsively and effectively than competitors.” Thus, organizational change management is a
continuous process of experiment and adaptation aimed at matching an organization’s capabilities to the
needs and dictates of a volatile environment (Burnes, 2000). By the same token, Lichtenstein (2000)
views organizational change as a transformative change through a complex adaptive system model of
change, which consists of three stages: increased organizing, tension and a threshold, and newly emerging
configuration.
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Role of Communication in Effective Change Management
Nonetheless, in the article, Managing Rapid Change: From Theory to Practice, written by McDonald
(2000), theoretical and practical perspectives on organizational change are distinguished. He notes that
some academics have applied Darwin’s “survival of the fittest” theory to the organizational change theory
(Vaill, 1989). It means that any organizations which fail to make changes are likely to be eliminated by
the competition. In practice, several organizations have put an emphasis on measurable ‘results driven
change’ because it serves as one of the most powerful approaches to change management. Such
evaluation results primarily purport to spell out the level of corporate performance improvement.
Scrutinized from those perspectives, both academics and practitioners have contributed to the notion of
changes that aims to help the firm outperform competitors.
Burke and Litwin (1992) argue that, despite the complexity of change issues, the notion of
transformational and transactional dynamics inherent in successful change efforts can be identified (see
Appendix1). Transformational factors deal with areas that require new employee behaviors as a
consequence of external and internal environmental pressures, such as leadership, culture, and mission.
On the contrary, transactional factors deal with psychological and organizational variables that predict
and control the motivational and performance consequences of a work group’s climate. These variables
include management practices, structure, systems (policies and procedures), and task requirements.
2.1.2 Significance of Change Management
The concept of change in organizations has captured both academics’ and practitioners’ attention for
decades. Kennerfalk and Klefsjo (1995) suggest that the fundamental changes in organizations can be
categorized into two main dimensions: changes in culture (Silvester et al., 1999; Brown, 1998) and
changes in structure (Daft, 2001; Bloodgood and Morrow, 2000). As for the structural change in
organization, Fenton and Pettigrew (2000) study about the evolution of the theoretical perspectives of
organization design, ranging from bureaucratic organization (Weber, 1947) to network organization
(Uzzi, 1997) during the past 50 years. In their work, empirical evidence on change management
constructs is emphasized. On the other hand, Chandler (1994) comments that the importance of change
management in 1990s can be better comprehended if it is viewed in the context of corporate expansion,
contraction, and restructuring.
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Role of Communication in Effective Change Management
In a general perspective of a change management model, major organizational characteristics, underlying
systems and business strategies are rigorously investigated and essential to accommodating
transformation (Laud, 1994). The Andersen Consulting’s Organizational Change Model in Figure 1
draws on a classic outcome of research and experience from the fields of management and organizational
behavior, whereby corporate culture is placed at the heart of the change management process. It is
theoretically derived from an input-process-output model.
Figure 1: Andersen Consulting’s Organizational Change Model
Source: Adapted from Laud, R. L. (1994). “The Tortoise and the Hare: Cultural Change and Corporate Strategy.”
In The Change Management Handbook: A Road Map to Corporate Transformation. Edited by Berger, Sikora, and
Berger McGraw-Hill.
If strategic change is to be succeeded, the important changes should take place in the cultural beliefs and
assumptions of the organization (Heracleous and Langham, 1996) leading to the cultivation of employee
commitment (Unzicker et al., 2000). Ellis (1998) conducts research on a new role and reveals three
underpinning dimensions for the strategic change: organizational culture, change management and
technology-enabled change.
Oftentimes, change agents, or persons who trigger and mobilize the change schemes, raise an issue of
how the change effort can be assessed (Reichheld, 1994). Practically, the magnitude of change is difficult
to be measured due to unprecedented situations and organizational environments involved (Burnes, 2000;
Brown 1998; Peters, 1998; Kanter et al., 1997; Brown 1995). In the existing literature, Burnes (2000)
asserts that there are three current models addressing the characteristics of change magnitudes; the
incremental model of change (Miller and Friesen, 1984), the punctuated equilibrium model of
organizational transformation (Romanelli and Tushman, 1994), and the continuous transformation model
of change (Brown and Eisenhardt, 1997).
External Environment Culture
Competitive Environment
Structure
Leadership
Work Force
ProcessVision/ Strategy
Output
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Role of Communication in Effective Change Management
In the work of Pettigrew and Fenton (2000), change initiatives such as delayering, decentralizing,
networking and information technology investment will not succeed if done piecemeal. To reap the
benefits of organizational change, particularly galvanized by innovation, firms must think and act
holistically and make changes on several fronts in careful alignment.
Furthermore, ample evidence shows that managers have a good reason to be anxious about
organizational change (Stickland, 1998; Sastry, 1997; Stace and Dunphy, 1994). If managers and change
agents utilize a well-orchestrated, integrated design that responds to needs for learning, realignment,
negotiation, and grieving, they might find themselves in the fast lane toward success and improvement
(Bolman and Deal, 1999). For example, John Sunderland of Cadbury Schweppes successfully
communicates his change message across a multinational corporation in various countries where working
cultures and environments are enormously disparate (McCune, 1999).
The road to change is never paved with roses, no matter how good the intentions or far-reaching the
support will be. As the successes and failures of companies have been enumerated, it is clear that any
organization that needs to succeed in the 1990s and beyond must have a systematic and well-lubricated
change management process in place. Given the frequency and potency of change, the system is no frill
but a radical life-support network (Berger, 1994).
2.1.3 Forces for Change
An amalgam of industrial and organizational challenges has much contributed to a new pace of change
with multidimensional facets. Essentially, the forces impacting change are powerful and pervasive
(Sikora, 1994). It is imperative to conduct an organizational analysis of external conditions and internal
forces that affect the need for change and the development of change strategies (Kanter et al., 1992). As
such, the interrelationships among internal forces for change, external forces for change, and
organizational characteristics can be cooperating initiators of a change process (Witherspoon and Wohlert
1996; Levy and Merry, Somboon Kulvisaechana 1986). External forces for change include market
forces, legislation, tax structures, new technologies, and political reasons. Whereas internal forces for
change are profitability, reorganization, conflicts between organizational components (departments), and
changes in culture/social environment (Anonymous, 1999).
Harari (1999a) and McCune (1999) reiterate that various uncontrollable factors emerge to shake up the
majority of the business organizations. Some of them are the explosion of technological advances, the
crumbling of global barriers to entry, the swarm of new competitor, the antipathy of the most talented
employees toward bureaucratic controls, and the insistence of customers on being treated as individuals,
not as part of a mass market (Sikora, 1994).
15
Unfreeze Change Refreeze
Ensure that employees are ready for changeExecute the intended changeEnsure that the change becomes permanent
Role of Communication in Effective Change Management
2.1.4 Kurt Lewin’s model for Change Management
The work of Kurt Lewin dominated the theory and practice of change management for over 40 years. His
is an approach to understanding group behaviour by trying to map out the totality and complexity of the
field in which the behaviour takes place (Back, 1992). Lewin maintained that to understand any
situation it was necessary that: ‘One should view the present situation – the status quo – as being
maintained by certain conditions or forces’ (Lewin, 1943a, p. 172). Lewin (1947b) postulated that group
behaviour is an intricate set of symbolic interactions and forces that not only affect group structures, but
also modify individual behaviour. Therefore, individual behaviour is a function of the group environment
or ‘field’, as he termed it.
Consequently, any changes in behaviour stem from changes are small or large, in the forces within the
field (Lewin, 1947a). Lewin defined a field as ‘a totality of coexisting facts which are conceived of as
mutually interdependent . . .’ (Lewin,1946, p. 240). Lewin believed that a field was in a continuous state
of adaptation and that ‘Change and constancy are relative concepts; group life is never without change,
merely differences in the amount and type of change exist’ (Lewin, 1947a,p. 199). This is why Lewin
used the term ‘quasi-stationary equilibrium’ to indicate that whilst there might be a rhythm and pattern to
the behaviour and processes of a group, these tended to fluctuate constantly owing to changes in the
forces or circumstances that impinge on the group.
Lewin’s view was that if one could identify, plot and establish the potency of these forces, then it would
be possible not only to understand why individuals, diminished or strengthened in order to bring
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Role of Communication in Effective Change Management
about change. In the main, Lewin saw behavioural change as a slow process; however, he did recognize
that under certain circumstances, such as a personal, organizational or societal crisis, the various
forces in the field can shift quickly and radically. In such situations, established routines and behaviours
break down and the status quo is no longer viable; new patterns of activity can rapidly emerge and a
new equilibrium (or quasi- stationary equilibrium) is formed (Kippenberger, 1998a; Lewin, 1947a).
Despite its obvious value as a vehicle for understanding and changing group behaviour, with
Lewin’s death, the general interest in Field Theory waned (Back, 1992; Gold, 1992; Hendry, 1996).
However, in recent years, with the work of Argyris (1990) and Hirschhorn (1988) on
understanding and overcoming resistance to change, Lewin’s work on Field Theory has once again
begun to attract interest. According to Hendry (1996), even critics of Lewin’s work have drawn on Field
Theory to develop their own models of change (see Pettigrew et al., 1989, 1992).
Indeed, parallels have even been drawn between Lewin’s work and the work of complexity theorists
(Kippenberger, 1998a). Back (1992), for example, arguedthat the formulation and behaviour of
complex systems as described by Chaos and Catastrophe theorists bear striking similarities to Lewin’s
conceptualization of Field Theory. Nevertheless, Field Theory is now probably the least understood
element of Lewin’s work, yet, because of its potential to map the forces impinging on an individual,
group or organization, it underpinned the other elements of his work.
Group Dynamics
. . . the word ‘dynamics’ . . . comes from a Greek word meaning force . . . ‘group dynamics’ refers to the
forces operating in groups . . . it is a study of these forces: what gives rise to them, what conditions
modify them, what consequences they have, etc. (Cartwright, 1951, p. 382)
Lewin was the first psychologist to write about ‘group dynamics’ and the importance of the group in
shaping the behaviour of its members (Allport, 1948; Bargal et al., 1992). Indeed, Lewin’s (1939, p. 165)
definition of a ‘group’ is still gener-ally accepted: ‘. . . it is not the similarity or dissimilarity of
individuals that constitutes a group, but interdependence of fate’.
In addition, Dervitsiotis (1998) embarks on the major forces for organizational change, which are
attributed to the following characteristics:
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Role of Communication in Effective Change Management
• A sufficient dissatisfaction with the status quo as described by current performance levels and their
trends;
• A strong attraction towards moving to a more desirable condition or improvement; and
• The appeal of a well-thought-out strategy for realizing the vision.
In the absence of any one of the three forces, there is no motivation to provoke management to act for
bringing about organizational change.
With the aforementioned factors to change, their ramifications tend to be of constructive benefits to the
organization at the expense of the hurdle of employees’ response to change in the first place (Lewis,
2000a; Markus, 1983). Though some studies reveal that, due to a strong desire to remain the status quo,
employees attempt not to change from what they are currently doing, the hindsight of change resistance is
still under-researched.
2.1.5 Resistance to Change
Of the many studies on change efforts, the issue of change resistance has always been included as part of
notorious impediments throughout the change stages. In fact, it is argued that employees do not resist all
change, only change that they do not understand or that they see as psychologically or economically
threatening (Hayes, 1996; Baird et al., 1990). As such, they usually respond to contradictory messages
with displeasure, frustration, confusionand anxiety (Stohl, 1995). Connected to that, the change
resistance, which may occur during change efforts – reduction of productivity, work slowdowns, hostility
and pessimism regarding goal attainment, can be attributed to several political, cultural, normative, and
individual causes (Miller et al., 1994). As for understanding the notion of resistance to change, Hayes
(1996) asserts that one needs to identify the factors underpinning such resistance. They are self-interest,
fear, group pressures, and inertia.
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Role of Communication in Effective Change Management
In the review of empirical research, Piderit (2000) posits that there are three different emphases in
conceptualizations of resistance: as a cognitive state, as an emotional state, and as a behavior. These
constructs might be well understood through the sources of change resistance, which are individual and
organization levels (Hellriegel et al., 2001; Dent et al., 1998; Strebel, 1996; Brown, 1995) as shown in
Figure 2.
In the work of Stoltz (1997), three categories of peoples’ reactions to change are: quitters who disagree
with change; campers, who simply sit things out, and climbers, who actively seek change. From his
study, it shows that the majority of the employees fall into the ‘campers’ category, whereby the desire to
remain status quo is initially prevalent.
Interestingly, in the article, Why Do Leaders Avoid Change?, written by Harari (1999a), some managers
try to keep themselves away from any kinds of change. Not only does their fear of failure become the
primary issue, but also loads of work, additional to what they currently have, appears to be an unpleasant
consequence.
Figure 2: Sources of Change Resistance
Source: Hellriegel, D., Slocum, J. W. & Woodman, R. W. (2001). “Organizational Behavior” Ninth Edition. South-Western College Publishing.
Individual Resistance
Perception
Personality
Habit
Threat to power and influence
Fear of the unknown
Economic Reasons
Organisational Resistance
Organisation Structure
Organisational Culture
Resource Limitation
Fixed Investments
Inter organisational agreements
Resistance to Change
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Role of Communication in Effective Change Management
As for optimizing the change resistance, managers are required to observe employee readiness for change.
Normally, their readiness emerges when the employees perceive little personal risk from change and feel
highly dissatisfied with the status quo (Hellriegel et al., 2001). With this respect, resistance to change
seems to be submerged. In addition, successful organizational adaptation is increasingly reliant on
generating employee support and enthusiasm for proposed changes, rather than merely overcoming
resistance (Pederit, 2000).Hayes (1996) proposes that resistance to change can be optimized by utilizing
the following strategies:
Participation and involvement (Daft, 1995; Smith, 1995);
Facilitation and support (Daft, 1995; Kirkpatrick, 1985);
Negotiation (Daft, 1995; Ivancevich et al., 1994);
Coercion (Humphreys, 1996).
Because some employees will already have formed ambivalence or an attitude toward the current point,
they may be able to infer their attitude toward the proposed shift for change in accordance with the extant
ambivalence. In other words, most employees’ responses to a proposed change will involve some
ambivalence. Thus, Piderit (2000) comments that their resistance to change does not always spell out the
antagonistic attitude against change, rather than expressing their responses along emotional, cognitive,
and intentional dimensions. For this reason, the phrase “resistance to change” should be retired and a new
wave of research on “employees’ responses to change” is to be emphasized. Hellriegel et al. (2000)
supports the idea of replacing the above phrase with “pressure to change.”
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Role of Communication in Effective Change Management
2.1.6 Change Formulation and Implementation
After examining the thrust for change and potential resistance to change within the organization, the
formulation of change strategies serves as a subsequent pivotal step to be undertaken. Fundamentally,
there are diverse ways to formulate change strategies, depending upon the extent of potential change, the
time and the information available and the power distribution in the organization (Heracleous and
Langham, 1996). According to the literature, a change management team with high credibility and
intellectual ability should be identified in the first place (Heracleous and Langham, 1996). Such a team
normally comprises change agents, or top managers, and other key persons to trigger and mobilize the
change engines throughout the organization. Not only do the top managers play this critical role, but
middle-level managers can also bring about profound change since they are the ones who directly involve
in day-to-day business operations (Harari, 1999b).
Although a debate between general managers and change specialists in taking charge of the change drives
is substantial, there is usually one individual, regardless of those titles, who takes charge of ensuring the
change effort takes place and is well carried out (Burnes, 2000). With this respect, Hartley et al. (1997)
and Beer (1994) argue that there has been relatively little empirical research on the clear-cut roles played
by change agents. However, Buchanan and Boddy (1992), cited by Burnes (2000: p. 298), analyze the
skills and competency essential to be a successful change agent by depicting that “a picture of the change
agent is a highly skilled and well-trained political operator who has not only an in-depth knowledge of
change processes and tools, but also the personal qualities an experiences to use them both in the open,
and especially, behind the scenes
In order to formulate change strategies, a series of change stages needs to be closely scrutinized.
Traditionally, Lewin (1947), cited by Burnes (2000), provides a classic framework of change levels:
unfreezing, moving and refreezing. Each phase is consistent with certain social behaviors and a particular
cognitive state (Brown, 1995). A better understanding of change has been supported by empirical
evidence from various authors, namely Weiss (2001), Bloodgood and Morrow (2000), Bolman and Deal
(1999), and Day (1999). In the recent work of Armenakis and Bedeian (1999), employee behaviors in the
change process have been extensively studied. Furthermore, Isabella (1990) and Jaffe et al. (1994)
propose a relatively similar model of change stages as to the employee’s reaction as shown in Figure 3
21
Role of Communication in Effective Change Management
Figure 3: Stages of Change
.”
Source: Adapted from Armenakis, A. A. & Bedeian, A. G. (1999). “Organizational Change: A Review of Theory and Research in the 1990s.” Journal of Management, vol. 25, iss. 3, p. 300
Throughout the aforementioned stages of changes, the change messages have to be conveyed to
employees in a strategic manner. As such, the accuracy and clarity of the contents are regarded as
significant components of the strategic change messages. In relation to that, Armenakis et al. (1999)
propose two models of change management. The first model considers creating a message for change
readiness so that resistance is minimized. The other model is about facilitating the adoption and
institutionalization of desired change. Both models are associated with the notion of change messages as
depicted in Figure 4.
Figure 4: Five Components of the Change Messages
Components Descriptive Meaning
1. Discrepancy We need to change
2. Self Efficacy We have the capability to successfully change
3. Personal Valence It is in our best interest to change
4. Principal support Those affected are behind the change
5. Appropriateness The desired change is right for the focal organisation
Source: Adapted from Armenakis, A. A. & Bedeian, A. G. (1999). “Organizational Change: A Review of Theory and Research in the 1990s.” Journal of Management, vol. 25, iss. 3, p. 300.\
22
Jaffe et al. (1994)
DenialRefuse to accept changes as solutions
ResistancePostpone participation and implementation
ExplorationTest new behaviours with promised results
CommitmentAccept the proposed change
Isabella 1990
AnticipationAssemble the rumor about change
ConfirmationConfirm the rumor with reality
CulminationCompare pre and post change events
AftermathEvaluate the consequences of change
Role of Communication in Effective Change Management
No matter how well change strategies are formulated, the implementation of change still accounts for
success. The substantial volume of evidence indicating change implementation failure has confirmed an
underlying reason why people are anxious about organizational change (Stickland, 1998; Cummings and
Worley, 1997). Perhaps, this seems to be consistent with the work of management consultant Rick
Maurer, President of Maurer & Associates. He addresses that only about one-third of major
reengineering efforts and 29 percent of mergers and acquisitions are successes in the United States
(McCune, 1999).
In another aspect, Lewis (2000a) denotes that some change implementers struggle with how to publicize
what they perceived as positive results of their programs. The implementers learn over time that the
success of the program depends, in large part, on the perception among employees that it is accomplished.
Spencer and Mountford (1997) point out that the gain from a well-managed change effort brings out
growth and prosperity to organizations and stakeholders. Among the outcomes that can be expected are:
1. Employees deliver or exceed target levels of performance on time and on budget.
2. Stakeholders remain loyal and new stakeholders are attracted.
3. Risks associated with change are eliminated or minimized.
4. The organization is left better able to change rapidly and effectively in the future.
As is evident from many of the studies reviewed, Armenakis and Bedeian (1999) posit that the
implementation models of Galpin (1996) and Judson (1991) are similar in concept and parallel to the
model of Kotter (1995), which is illustrated in Figure 5.
Figure 5: Eight Steps of Change Implementation for Change Agents
23
Role of Communication in Effective Change Management
Source: Adapted from Kotter, J. (1995). “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review, vol. 73, iss. 2.
To recapitulate the importance of change formulation and implementation, words and actions are
indispensable to create images and meanings that will focus attention on the need for change, to establish
an environment receptive to change efforts, to communicate change messages and to encourage
participation in the strategies designed to achieve it (Witherspoon and Wohlert, 1996). The formulation
and implementation of change strategies could be perceived as a united entity and an ongoing process.
Framing the change targets with comprehensive schemes or meanings of change is of radical challenges
to overcoming the obstacle of organizational changes (Gilsdorf, 1998). On the ground of these facts, a
communication tends to be considered as a bloodstream that helps transmit the change messages
throughout both change formulation and implementation stages.
Establishing a sense of urgency by relating to potential crisis and opportunities facing the firm
Forming a powerful coalition of change – oriented individuals
Creating a vision to achieve the desired end- result
Communicating the vision through numerous channels of communication
Empowering others to change structures or policies in the way that will facilitate
Planning to publicise short term wins or successes so as to encourage change continuity
Consolidating improvements and changing some policies that are not associated with the vision
Institutionalising the new approaches by publicizing the firm’s success of changes
Phase I
Phase II
Phase III
Phase IV
Phase V
Phase VI
Phase VII
Phase VIII
24
Role of Communication in Effective Change Management
2.2 Communication Strategy Theories
2.2.1 Fundamentals of Communication
Undoubtedly, communication proves to be of the most significant tools in social life and business
management. It also plays a pivotal role in collaboration of all human activities that link people together
and create relationships (Duncan and Moriarty, 1998). Moreover, in the organizational level, Barker and
Camarata (1998) assert that communication is embedded in every aspect of becoming an effective
organization and of continuing to be a learning organization. As such, organizational communication is
essentially viewed as the collective interactive process of generating and interpreting messages between
people within the organization through either directional (one-way) or bidirectional (two-way) manner of
communication (Stohl, 1995). For instance, the nature of hierarchical relationships with communication
patterns is examined in the research of Stohl (1995). It is found that a high bureaucratic organization
tends to shape its communication practices in a vertical formal way, such as a top-down chain of
command through written forms of communication, while personal interactions may not be well exposed.
Originally, Kreitner and Kinicki (1995: p. 368), quoted from Bowditch and Buono (1994), define
communication as “the exchange of information between a sender and a receiver, and the inference
(perception) of meaning between the individuals involved” so as to reach a common understanding
(George and Jones, 1998).
Recently, a description of communication theories has expanded to cover more of psychological and
cognitive aspects. In the literature of Weiss (2001) and Kreitner and Kinicki (1995), a perceptual model
of communication is basically elaborated from a traditional communication process model
(Schermerhorn, 1998; Baguley, 1994). In the perceptual model, the cognitive interpretation of messages
is focused by which the miscommunication becomes better understood (Kreitner and Kinicki, 1995).
According to the work of Kreitner and Kinicki (1995) in Figure 6, a perceptual model of communication
begins with a sender cognitively encodes an idea or thought by using verbal and non-verbal cues,
including attitudes. The output of encoding is a message transmitted on medium selected by the sender.
Then the receiver cognitively decodes that idea or thought based on his/her understanding and perception
toward the message. A message for feedback is created and transmitted on medium of the new sender
(receiver)’s choice. The process of communication tends to be completed after the original sender
interprets the message received and acts upon. Barriers of communication, such as loud noise, poor
handwriting, and inaccurate statistics in a memo, can distort the quality of the perceptual communication
process at any stages.
25
Role of Communication in Effective Change Management
Figure 6: A Perceptual Model of Communication
Source: Kreitner, R. & Kinicki, A. (1995). “Organizational Behavior.” Third Edition. Irwin.
Source: Kreitner, R. & Kinicki, A. (1995). “Organizational Behavior” Third Edition. Irwin.
2.2.2 The Elements of Effective Communication Strategy
Effective communication is important for both managerial and organizational success (Dawson, 1996;
Kreitner and Kinicki, 1995). It can be witnessed from the viewpoint where employees collaborate,
interact, and engage with others in ways which help them understand the importance and meaning of the
engagement and achieve certain goals (Barker and Camarata, 1998; Pace and Faules, 1989). According
to the literature, the notion of effectiveness communication is not merely confined with an interactive
collaboration between employees, but it also has an impact on organizational issues. For instance,
Clampitt and Downs (1993) demonstrate a close link between effective communication and productivity.
Whereas Pettit et al. (1997) examine how effective organizational communication relates to job
performance and job satisfaction. Moreover, an empirical study shows that employees’ commitment to
the organization correlates positively with organizational clarity and is maintained even when changes are
occurring in the organization (Guzley, 1992). As such, the communication strategy can be perceived as a
mechanism to clarify the facts to various stakeholders of what is going to change, why, and what benefits
they can expect to derive from the change (See Appendix 2).
Source Decodes
Transmitted on medium
Message Encoding
Receiver Decodes
Transmitted on medium
MessageEncoding
Sender Receiver
creates meaning
Barrier (Noise)
Feedback Loop
26
Role of Communication in Effective Change Management
Partially drawn from the marketing communication literature, the underlying philosophy of effective
communication strategy is held true and proves to be literally practical to other contexts. With this
regard, Mohr and Nevin (1990) define a communication strategy as the use of a combination of
communication facets, which include frequency and formality of communication (Maltz and Kohli, 1996;
Mohr and Nevin, 1990), and content of communication (Mohr and Nevin, 1990; Jablin et al., 1987), and
channel of communication (Carlson and Davis, 1998). For example, one communication strategy might
be frequent communication through informal modes, with indirect content. In the following section, each
facet of communication strategy will be elaborated as part of the key constructs for this study.
2.2.2.1 Frequency of Communication
Normally, dissemination frequency is measured as the number of dissemination events or the amount of
communication between a sender and a receiver during a given period of time or duration of contact
(Maltz, 2000; Maltz and Kohli, 1996; Mohr and Nevin, 1990). In assessing the frequency of
communication, one should examine the amount of contact necessary to achieve a particular activity, not
simply including the amount of contact per se. Because most empirical research has used frequency as
the indicator of the amount of communication, the author tends to adopt the frequency of communication
rather than the duration of contact.
Formality of Communication
Maltz and Kohli (1996: p. 48) comment that the dissemination formality has not been empirically
explored in the communication literature; though a number of researchers have noted that organizational
“intelligence may be disseminated through formal or informal channels.” Moreover, some scholars might
not explicitly define what is meant by formal and informal channels. Johnson et al. (1994) address the
issue of distinctive clarification between them. Formal communication basically refers to communication
that flows through written channels, though “formal” meetings or training sessions also may be
considered a formal mode. However, “informal” communication refers to the communication that occurs
in a non-structured manner, such as a normal conversation or social discussion.
The aforementioned definitions have been reiterated in the findings of the research work conducted by
Johnson et al. (1994). Such a project is studied in a large midwestern state governmental agency to
compare formal and informal organizational communication structures, specially focusing on salience,
channel factors, and channel usage.
27
Role of Communication in Effective Change Management
2.2.2.3 Content of Communication
The content of communication refers to “the message that is transmitted – or what is said” (Mohr and
Nevin, 1990: p. 39). It can be verbal or non-verbal, intentional or unintentional. Shelby (1998) points out
that the content in the message is considered the central part of the communication. Furthermore, the
complexity of the language appeared in the message can determine the success or failure of the
communication effort (Anonymous, 2000). As such, simple words and clear structures of the context can
essentially overcome the complex issues.
In relation to that, Mohr and Nevin (1990) and Frazier and Summers (1984) attempt to distinguish
between direct and indirect influence strategies embedded in the exchanged information. Direct
communication strategies are designed to change behaviors of the target by implying or requesting the
specific action that the source wants the target to take. For instance, recommendations, requests and
appeals to legal obligations fall into this type of influence strategy. Whereas indirect communication
strategies are designed to change the target’s beliefs and attitudes about the desirability of the intended
behavior; no specific action is requested directly. An example of indirect communication content is
information exchange, whereby the source uses discussions on general business issues and operates
procedures to alter the target’s attitude about desirable behaviors.
Sengupta et al. (2000) address that the communication quality, which refers to the content of the
communication received and understood by the other party in the relationship, marks a desirable outcome
of communication. It also associates with the context of developing and maintaining personal
relationships. However, Shelby (1998) comments that “appropriate choices of channel communication”
are those most likely to result in communication effectiveness and efficiency – for both message senders
and receivers; they are those that provide perceived quality to communication process.
2.2.2.2 Channel of Communication
Channels of communication are regarded as the vessels of the message delivery (Anonymous, 2000).
According to the literature, they have been broadly discussed in the notion of the flow of information,
(Johnson et al.,1994) and information richness (Krietner and Kinicki, 1995). Editorial tone and
communication potentials are of important characteristics determining the flow of information (Johnson
et al.,1994). Basically, editorial tone mirrors an individual’s perception of the credibility and
trustworthiness of the source, which has an impact on the upward flow of information in the organisations
(Glauser, 1984). Whereas communication potential refers to “an individual’s perception of the manner in
which the information is presented.” (Johnson et al., 1994: p.114).
This is relating to the issues and of styles and comprehension of the documents, such as newsletters.
Information richness is the amount of information carried out between senders to receivers to reach a
28
Role of Communication in Effective Change Management
common understanding (Carlson and Davis, 1998).
Media that are high in information richness are capable of transmitting more information and are more
likely to generate a common understanding than are media that are low in richness (George and Jones,
1998).
2.2.3 Issues of Communication for Change
Organizational scholars have long acknowledged the importance of communication processes in
explanations of organizational change processes (Lewis and Seibold, 1996; Rogers, 1995; Fairhurst and
Wendt, 1993). Nonetheless, Lewis (2000a) argues that the systematic research about the effectiveness of
communication strategies about change is scant. Carmichael (1996) supports Lewis’s argument by
depicting that academics and practitioners have tried to search for a complete, well-grounded definition of
communication for change, but their efforts primarily have focused on the invention, design, adoption,
and responses to planned organizational change, as well as outcomes of change efforts. In addition,
central communication processes involved in the implementation of planned changes within organizations
have received far less attention by communication scholars (Lewis, 2000a).
2.2.3.1 Impediments of Communication for Change
Communication problems are commonplace when changes are not clearly identified (Lewis, 2000b). Not
only do they cause a drain on profitability, but also the effectiveness of management declines (Gilsdorf,
1998). In the work of Dawson (1996: p. 192), many underlying reasons why communication often falls
short of the ideals, which are “accuracy, reliability, validity, adequacy, and effectiveness,” are addressed
with some general issues within the relationship between information and communication in
organizations. 2
According to Lewis (2000b)’s research findings, the most frequently noted categories of problem
encountered by the company in transition are “communicating vision” and “negative attitudes.” If an
organization’s management does not consider which communication behaviors it wishes to foster for its
success, the signals it sends to employees may be inconsistent or counterproductive. Thus, managers
should consider conveying clear communication-behavior expectations as a fundamental element of
strategy. In doing so, firms might pursue communication audits which involve ethnographic analysis,
including observation and interviewing, to learn exactly what organizational policies are operating
(Gilsdorf, 1998). Moreover, Gilsdorf moves on to argue that analysis of organizational culture should be
conducted in order to help determine the communication strategy used to solve the problem.
2.2.3.2 Formulation and Implementation of Communication for Change
29
Role of Communication in Effective Change Management
At the outset of the business competition for the 21’st century, there is a trend of increasingly rapid
change in organizations. Viable communication counts for an increase in not only individual
receptiveness but also organizational change preparedness (Sinetar, 1988). It is axiomatic that good
communication has become an essential component in successful change (McGill, 1996). Because any
change schemes require ample communication to reduce confusion and to realign structural patterns to
support the new direction (Bolman and Deal, 1999), both formulation and implementation plans of
communication in change plays a crucial role in helping navigate change to the planned direction (Axley,
2000).
The formulation of communication change plans seems to be relatively scarce in academic research
journals. Since there is no clear distinction between the formulation and implementation planning in
principle, the formulation part is included into the notion of the implementation plan of communication
change. Tornatzky and Johnson (1982), quoted by Lewis (2000a: p. 193), define implementation as “the
translation of any tool or technique, process, or method of doing, from knowledge to practice.
It encompasses that range of activities which take place between “adoption” of a tool or technique
(defined as a decision to use the technology) and its stable incorporation into on-going organizational
practice.”
The importance of communication for change is not only informing, motivating and coordinating but also
managing employee expectations (Heracleous and Langham, 1996). Covin and Kilmann (1990) suggest
that it is critical to communicating information (e.g., mission statements and goal achievement status)
during change. They find that “failure to share information or to inform people adequately of what
changes are necessary and why they are necessary viewed as having a highly negative impact.” (p. 239)
Feedback gathering from employees, which is pertinent to implementation issues, serves a significant
evaluative function for organizational leaders. Additionally, it may be radical for managers to provide
channels and opportunities for employees to gather feedback about their own participation in change
programs (Lewis, 2000a). In relation to that, face-to-face communication in seeking employees’ views
and concerns is highly recommended (Heracleous and Langham, 1996). By the same token, Sinetar
(1988) suggests the informal communication program, which refers to a mechanism to help various
corporate stakeholders become comfortable with change and with the organization’s long-term goals, to
be extensively conducted so as to create mutual understandings among change agents and employees.
At the outset of the business competition for the 21’st century, there is a trend of increasingly rapid
change in organizations. Viable communication counts for an increase in not only individual
receptiveness but also organizational change preparedness (Sinetar, 1988). It is axiomatic that good
30
Role of Communication in Effective Change Management
communication has become an essential component in successful change (McGill, 1996). Because any
change schemes require ample communication to reduce confusion and to realign structural patterns to
support the new direction (Bolman and Deal, 1999), both formulation and implementation plans of
communication in change plays a crucial role in helping navigate change to the planned direction (Axley,
2000).
The formulation of communication change plans seems to be relatively scarce in academic research
journals. Since there is no clear distinction between the formulation and implementation planning in
principle, the formulation part is included into the notion of the implementation plan of communication
change. Tornatzky and Johnson (1982), quoted by Lewis (2000a: p. 193), define implementation as “the
translation of any tool or technique, process, or method of doing, from knowledge to practice.
It encompasses that range of activities which take place between “adoption” of a tool or technique
(defined as a decision to use the technology) and its stable incorporation into on-going organizational
practice.”
The importance of communication for change is not only informing, motivating and coordinating but
also managing employee expectations (Heracleous and Langham, 1996). Covin and Kilmann (1990)
suggest that it is critical to communicating information (e.g., mission statements and goal achievement
status) during change. They find that “failure to share information or to inform people adequately of what
changes are necessary and why they are necessary viewed as having a highly negative impact.” (p. 239)
Feedback gathering from employees, which is pertinent to implementation issues, serves a significant
evaluative function for organizational leaders. Additionally, it may be radical for managers to provide
channels and opportunities for employees to gather feedback about their own participation in change
programs (Lewis, 2000a). In relation to that, face-to-face communication in seeking employees’ views
and concerns is highly recommended (Heracleous and Langham, 1996).
By the same token, Sinetar (1988) suggests the informal communication program, which refers to a
mechanism to help various corporate stakeholders become comfortable with change and with the
organization’s long-term goals, to be extensively conducted so as to create mutual understandings among
change agents and employees.
31
Role of Communication in Effective Change Management
Chapter III
GODREJ
3.1 History
The Godrej Group is one of the oldest and most diversified firms in India. From a lock making company
in 1897 to a present day conglomerate – the transformation has been Phenomenal. It
provides us a rich insight into a company that successfully adapted to a dynamically changing
environment. Once synonymous with locks and safes today it has presence in FMCG, consumer
electronics, engineering, IT and other fields. Safely ensconced in the protective environment of the
license raj, the liberalization of 91 and the ensuing challenges from the MNCs provided yet another
stimulus for change. The company shed its image of a closely held family business and moved from a
family-owned family managed to family owned professionally managed organization. The movement
has been gradual and marked with a number of hindrances. This can be attributed to the organizational
inertia which tries to maintain the status quo.
The two major companies of Godrej group – Godrej & Boyce and Godrej Industries Limited, have sea
change of difference in organizational culture and focus areas. While, Godrej & Boyce continues to focus
on consumer, industrial and office equipment products, Godrej Industries Limited is more dynamic
and focuses on range of sectors including FMCG, retailing, food, IT, real estate, etc. It gives a
lot of independence to its affiliate companies and subsidiaries in decision-making. However, the control
of Godrej family exists with family members having full control or as board members in some of the
companies.
32
Role of Communication in Effective Change Management
3.2 Overview
An average Indian starts the day with the use of Godrej soaps and Godrej shaving cream in the
morning, picks up clothes from a Godrej Almirah, sits on Godrej furniture in the office, drinks coffee from
the Godrej vending machines., eats Godrej food products, uses Godrej fax/conferencing equipment for
communication, puts money in Godrej safe, plugs Good Night and goes to sleep at the end of the day.
A recent estimate suggested that 400 million people across India use at least one Godrej product every
day. Godrej Group today is one of the largest diversified industrial corporations in India. It stands in a
strong position today, with annual sales in excess of US$ 1.7 billion, a workforce of approximately
20,000, and a strong diversified portfolio.
The saga of the success of Godrej group is a story which runs into about four generations. From
the humble beginning driven by honesty, integrity and outstanding service to customers now Godrej
is a huge empire, which has come all the way as being know as a lock making company for over more
than 100 years ago and is an epitome for success. This endeavor began in the last century with
Ardeshir Godrej starting at the grass roots level with the manufacture of locks. After mastering the
technology thoroughly he decided to manufacture locks, which could compete with locks imported from
foreign countries. From then on there has been no looking back. He along with his younger brother
Pirojsha went on to make security equipments of a high quality. They kicked off Godrej & Boyce and
successfully began the manufacture of toilet soaps from vegetable oils. Ardeshir moved from locks,
safes, soaps to biscuits and confectionery and canning and processing and Pirojsha focused on growing
businesses. They further diversified into cupboards and furniture. The next generation was dominated by
Naval who forayed into ventures like typewriters and refrigerators. The third generation led by Jamshyd,
took on the challenge as managing director of Godrej & Boyce and is carrying on its business.
33
Role of Communication in Effective Change Management
3.2. 1 Timeline
o 1897 - Godrej & Boyce Mfg. Co. Ltd established
o 1918 - Godrej Soaps Limited incorporated
o 1961- Godrej Started Manufacturing Forklift Trucks in India
o 1971- Godrej Agrovet Limited began as an Animal Feeds division of Godrej Soaps
o 1974 - Veg oils division in Wadala, Mumbai acquired
o 1990 - Godrej Properties Limited, another subsidiary, established
o 1991 - Foods business started
o 1991 - Godrej Agrovet Limited incorporated
o 1994 - Transelektra Domestic Products acquired 1995 - Transelektra forged a strategic alliance with Sara Lee USA
o 1999 - Transelektra renamed Godrej Sara Lee Limited and incorporated Godrej InfoTech Ltd
o 2001 - Godrej Consumer Products was formed as a result of the demerger of Godrej Soaps Limited. Godrej Soaps renamed Godrej Industries Limited
o 2002 - Godrej Tea Limited set up
o 2003 - Entered the BPO solutions and services space with Godrej Global Solutions Limited
o 2004 - Godrej HiCare Limited set up to provide a Safe Healthy Environment to customers by providing professional pest management services
o 2006 - Foods business was merged with Godrej Tea and Godrej Tea renamed Godrej Beverages & Foods Limited
o 2007 - Godrej Beverages & Foods Limited formed a JV with The Hershey Company of North America and the company was renamed Godrej Hershey Foods & Beverages Limited
o 2008 - Godrej relaunched itself with new colorful logo and a fresh identity music
o 2010 - Godrej launched GoJiyo a free, browser based 3D virtual world
34
Role of Communication in Effective Change Management
3.2.2 Companies in the Group
The spirit of entrepreneurship, the vision of a dynamic tomorrow, and the capacity to build and realize
dreams! This is the essence of the Godrej group. No wonder then, Godrej has become the symbol of a
vibrant multi-business enterprise touching the lives of millions and at the same time an icon of enduring
ideals in a changing world.
Godrej & Boyce
From locks to aerospace, furniture to construction, appliances to custom-built critical
equipment, and several more, Godrej & Boyce has a diverse range of products and services.
Godrej Industries
India's leading manufacturer of oleo chemicals making more than a hundred chemicals for use in over two
dozen industries. Its products also include edible oils, vanaspati and bakery fats.
Godrej Properties
One of India’s leading real estate development companies focusing on residential,
commercial and township development.
Godrej Consumer Products
A major player in the Indian FMCG market with leadership in personal care, hair care, household care
and fabric care segments.
Godrej Household Products
Godrej Household Products Limited (GHPL) is a wholly owned subsidiary of Godrej
Consumer Products Limited. With strong brands like Good Knight, HIT, Jet, Ambipur,
Brylcreem and Kiwi, GHPL is the market leader in the Indian household insecticides category and has a
dominant presence in the air care, shoe care and male hair care markets.
Godrej Hershey
A joint venture between the Hershey Company, USA and the Godrej group, it is one of India's leading
businesses operating in Food and Beverages segment.
Godrej Agrovet
It is Diversified agribusiness Company with interests in animal feed, oil, palm plantations, agro chemicals
and poultry. It is India’s largest animal feed company.
35
Role of Communication in Effective Change Management
Other Companies
Godrej InfoTech
Godrej Efacec Automation & Robotics
Geometric
International Operations
3.2.3 Products and services
36
Appliances Agri
Furniture AV Solutions
FMCG Chemicals
Real Estate Construction
Electricals and Electronics Material Handling
IT & Software Solutions Motors
Locks Precision Engineering
Process Equipment Tooling
Security Solutions Vending
Storage SolutionsBatteries
Role of Communication in Effective Change Management
3.3 Change Management and Strategies and Role of Communication in Godrej Industries
Indeed, since their inception 105 years ago, Godrej have consistently and constantly been agents of
change. It has only recently come to light, in papers unearthed after former Chairman Sohrab
Godrej’s death, that the pioneer-founder Ardeshir Godrej not only changed from law to surgical
instruments, to locks and safes and, in a startling departure, vegetable oil soaps, but also established,
and for some time successfully ran, a farm at Nasik, patterned along the lines of agricultural cooperatives
in Europe and America. Ardeshir saw the basic need and great potential for the processing and canning
industries in a country like India, which is the largest producer of fruit after Brazil and America and of
vegetables after China. Ardeshir didn’t live to see his vision come to fruition.
So, change is in the Godrej blood. Change is what has enabled Godrej to survive with a strong value
system and adapt itself to an even faster changing world. In an address on Management of Change to
the Indian Merchants’ Chamber in 1991, industrialist Harishankar Singhania described how the
technology of communication and travel had shrunk the world and how globalisation of production and
financial needs had promoted a closer integration of the economies of nations, making the world highly
interdependent. In this continual state of flux, "in a world which is becoming multi-polar economically
and tending towards uni-polarity politically," change is the only constant and the only resort for us is to
keep pace with it, not let it overtake us.
According to Singhania, there are three levels of response to change — at the national, the
industrial/organisational and the personal levels.
The so-called socialistic pattern of society, with its highly centralised planning process forced upon
reluctant industrialists in the first 45 years of Independence, severely curtailed their individual,
organisational and national freedom as well as the ability to respond rationally to change in any form and
at any level.At the level of industry/organisation, too, it was the same. Government policy created
a highly regulated industrial regime in which competition was conspicuous by its absence.
Insufficient attention was paid to the quality of goods and services. We lacked an outward orientation,
and the global stream passed us by.
37
Role of Communication in Effective Change Management
But our most significant, most dangerous lack of response was at the individual level. Our national trait of
resting on past laurels (at one time we were the 10th highest industrial nation in the world), our chalta hai,
chalne do attitude, our belief in karma that all is ordained, and our lack of a work culture have
irretrievably damaged our present. The increasing lack of individual commitment, our lack of
identification with national goals and failures in personal integrity have reduced usto the status of a
development-striving but poverty-stricken nation.As J. Watson Wilson profoundly understood: "If you
dig deeply into any problem, you will get to ‘people’." We as "people" were the losers, yet "people"
remain our only hope.
Singhania aptly concluded: "Let us vow not to be the proverbial wheelbarrows, which go only as far as
they are pushed, but instead forge ahead like spaceships into the known and yet unexplored destinations
with a dynamism that is the need of the hour."
Godrej Industries and its associate companies have several initiatives in place with a view to improve
both corporate governance and stakeholder returns. Among the many initiatives are:
3.3.1 Initiatives
a) EVA- The Economic Value Added Principle
EVA, short for Economic Value Added, is a financial performance metric developed by the New York-
based consulting firm Stern Stewart & Company. In simple terms, EVA is the true measure of the
value created by a firm, calculated by taking into account the economic profits generated by the firm
and the cost of the resources used to achieve these profits.
Arithmetically, EVA is calculated by subtracting the cost of capital from a firm’s net operating profit after
tax (NOPAT). The EVA framework provides a comprehensive and integrated approach to value-
based management. Further, when integrated with the variable compensation philosophy of a firm, the
EVA framework provides an excellent tool to focus the entire management team’s attention and
energy to creating superior operational efficiencies and improving upon the same each year.
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Role of Communication in Effective Change Management
EVA was implemented at Godrej Industries and its associate companies in four phases from October
2000 to July 2001. All the major businesses were covered: Godrej Agrovet Ltd. (agribusiness), Godrej
Consumer Products Ltd. (FMCG: soaps and personal products), Godrej Industries Ltd. (Oleo-
chemicals), Godrej Properties & Investments Ltd. (Property development), Godrej Sara Lee Ltd. (FMCG:
household insecticides), and the newly acquired Gold Mohur Foods & Feeds Ltd. (agribusiness).EVA and
Performance-Linked Incentives. In the past (1996-2001), performance-linked bonuses at the Group
were a step function in which exceedingly superior performance went unrewarded and poor
performance went unrealized.
Along with the EVA framework, Godrej Industries and its associated companies implemented the EVA-
linked incentive plan. "Performance-Linked Variable Remu-neration" (PLVR) is our EVA-linked
incentive plan. It has no caps, no floors, and a deferred bonus "bank" to encourage long-term thinking and
owner-like behaviour. Under the PLVR plan, achieving target performance yields the target bonus while
exceeding the target bonus leads to additional rewards without any limit to the upside. Similarly, falling
short of the target bonus leads to an erosion of the bonus earned. Further, each year, a part of the bonus
earned by the employee is retained in a notional "bonus bank". Every subsequent year’s bonus paid
out comprises in part the bonus earned in that year and in part a portion of the bank. Thus, the "notional
bank" serves to smoothen out fluctuations in bonus payments which might otherwise occur due to
business cycles.
As with any change process, obtaining the buy-in of key managers and employees was important.
Initially there was skepticism about the "bonus banking" concept and the longer-horizon stretch targets.
Relentless communication and demonstrable results was the key to ensuring that the concept of EVA was
imbibed at all levels of the organisations.
Following EVA implementation, our operating performance has improved significantly. Between
the years 2001 and 2004, Return on Capital Employment has improved by 8 percentage points,
Sales have grown by 15 per cent per annum, and PBT has grown by 42 percent per annum. All the
businesses improved their performance, many of them well ahead of the stretched targets. In
2002, three of the five businesses achieved their respective EVA improvement targets. In 2003,
four out of six achieved their targets - and all had positive EVA improvements.
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Role of Communication in Effective Change Management
To summarize, Godrej Industries Ltd. and its associate companies have been very successful in improving
their operating performance substantially by implementing the EVA framework. It certain that many
other companies can and will benefit in the near future by using the same principle as a management
tool. Between the years 2001 and 2004, Return on Capital Employment has improved by 8
percentage points, Sales have grown by 15 per cent per annum, and PBT has grown by 42 percent per
annum.
Benefits of EVA :
From the Management point of view:
§ Improvements in capital efficiency and operating profitability.
§ Greater focus on optimal capital structure.
§ Improved strategic and scenario planning.
§ More robust acquisition analysis tools.
From a Motivation point of view:
§ Longer-term focus.
§ Greater alignment in shareholders and employees interests.
§ In a recent Gallup employee satisfaction survey, about 80 per cent of Godrej Industries Ltd. and associate companies employees felt that EVA/PLVR (Performance-Linked Variable Remuneration) was the initiative that made the most difference.
b) The Think Tank: This team, comprising senior managers from across the Group, examines long-term
trends in technology, consumer behaviour, distribution, finance, etc., and makes strategic
recommendations to the Group Management Committee.
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Role of Communication in Effective Change Management
c) The Young Executive Board: This team comprises managers under 32 years of age, who are assessed
to have high leadership potential and outstanding performance. Among other things, the YEB works on
strategy for the Group and gives advice to the top management on specific topics of interest, like Human
Resources, Corporate Governance, etc.
d) Red & Blue Teams: These teams, comprising managers from the respective businesses, are unique as
they form a part of the bottom-up strategic planning exercise for each of the businesses. The
recommendations of the Red & Blue Teams are distilled through the management committee and
pursued by the Plum Team.
e) Kaizen: The system has led to significant increase in employee involvement and morale.
Significant savings have also resulted. The organisation is becoming more flexible, with greater
capability to adapt to the rapidly changing needs of the environment.A reduction of over 70 per cent in
changeover time on the shop floor has been achieved in all Plants. Manufacturing has been able to meet
the changing needs of marketing with smaller lot sizes without losing economies of scale. Today, Godrej
enjoys one of the lowest changeover times in the industry. The quick response to marketing’s needs has
reduced finished products inventory by over 40 per cent maintaining the same service level. Introduction
of the first phase of Total Productive Operations has resulted in a continuous decline in the cost of spares
and repairs, to about 50 per cent of that at the introduction of the programme.
Through lower energy consumption, one of the two high pressure boilers in the Vikhroli Factory has now
become redundant. It was a result of hundreds of tiny improvements brought about by everybody in the
organisation. Reducing demands of energy for the same output has become a set pattern in the Company.
Value Analysis exercises has reduced costs of materials while enhancing the quality of output. This runs
into lakhs of rupees every month. Every month, thousands of improvements are occurring company-wide;
they extend to all spheres of activity including Finance, Marketing, and Personnel. An improvement-
oriented culture has set into the organisation with employees looking out for opportunities to make
improvements and savings.
f) Total Quality Management:
1995-96 : TQM Awareness programmes conducted for all employees across all cadres — from the
Chairman and Managing Director to the lowest grade worker.
The first 7 awareness programmes were conducted by Eicher Consultancy Services (ECS).
Train-the-Trainer concept was utilized for creating a pool of 60 ‘‘internal’’ trainers.
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Role of Communication in Effective Change Management
1996-97: ‘‘Visioning’’ session held to select our 10 Corporate Shared Values;No more hand-holding by
ECS (consultant) required; TQM training and facilitation across the organisation done entirely by an
‘‘internal’’ team — TQM Centre created.
1997-98 : Initiation of 5S all across the organisation; Commencement of 5S Audits;Special focus on
integration of business strategy/plans and TQM;Tracking and compiling of monetary benefits from SGAs
initiated; Initiation of Task Forces; Employees start participating in QC Conventions held at various
locations.
1998-99: Introduction of the CII-EXIM Business Excellence Model; 20 employees undergo special
training as ‘‘Assessors’’ for the CII-EXIM BE Award. Kaizen Appreciation Forum held for the first time
to recognise and appreciate Star Kaizens from across the organisation; held regularly every quarter.
1999-00: Self-Assessment of all businesses conducted as per the CII-EXIM Business Excellence Model;
Strengths and Areas for Improvement listed for each of the 9 criteria in the Model.
2000-01: TQM Awareness programmes conducted for our business partners: Suppliers, C&F Agents,
Distributors, etc. TPM initiated at Pondy Factory (GSLL) and Valia Factory (GSL); Six Sigma initiated at
Pondy Factory.
2001-02: TPM initiated in almost all our major factories/units.
“Realizing this need, Godrej adopted Partnership 2000 as a further step, a fresh initiative to meet
the diverse needs of a wide variety of businesses across the Godrej organisation. In terms of
attracting, motivating and retaining talent while remaining focused on performance, it is one bolder step
on the long journey of forging partnerships with "people", who are our biggest asset. It involves a moving
away from a too closed supervisory attitude to a more open-minded, trusting one, the driving motto being
"Entrust and Empower".
Above all, quality continues to be the watchword. "Exceeding the expectations of the consumer" is for
Jamshyd one of the best definitions of quality he has come across: "Expectations are psychological and to
that extent Quality has a philosophical connotation … The challenge is not so much in reducing the defect
rates. It is in manufacturing, engineering, marketing and design with all the elements that describe a
product and how that is going to affect it in the market."
Jamshyd’s words take us back over a hundred years when, working in a lowly shed in the crowded
recesses of Lalbaug, young Ardeshir Godrej, lawyer turned talachaviwalla, devised a lock that provided
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better value than all the locks then being made in the country — a lock that was unpickable, that didn’t
rust because its springs had been replaced by levers and that could be opened only by its own key. He was
the innovator. He set the trend. What was then becoming a household name was transformed by his
successors into a strong brand name.
Change Management in Godrej today is going to call for all Jamshyd’s reserves of personal fortitude. We
too, being empowered, have to join in for the rewards are rich — renewal, reinvigoration. All boils down
to Values (moral) and Value (business). It is not enough for the incumbent management to preserve and
cherish the values laid down by our forefathers who made Godrej a household name and then a strong
brand name — it has constantly to question itself as to what value it is adding for the Company’s growth
and development.” B.K. Karanjia
Pooja Saxena, Assistant Manager, Human Resources Department, makes a case for Riding on the Wings
of Change.
A leading management guru believes that there are two primary reasons for the failure of companies
today:
a) Inability to escape from past success and glory, and
b) Inability to invent/anticipate the future.
Both these causes can be attributed to a failure of leadership. It is leadership that drives change, and the
success or failure of a company depends on the direction of change and how it is managed.
As many a leader or "driver of change" will have found, commitment to and acceptance of
change seldom comes about as soon as it is introduced. Commitment to the process of change
follows from the experience of carrying it out or being a part of it. Commitment is the result of action.
The leadership must, however, have the capacity for tolerance and respect, as well as a spirit of adventure,
as these are essential for the growth of a social organisation.
3.3.2 Personal examination
First things first, they say…When we desire to transform a firm or organisation from one culture to
another, we must recognise that every change starts with personal transformation. A prerequisite for
this is personal examination, which starts with an in-depth exploration of personal beliefs,
unconscious assumptions, values regarding the nature of management, the organisation, purposes
of work and the effectiveness of technology. It also involves an examination of alternative visions of the
future. Effective leaders are motivated by an inner vision, purpose and mission. This is an authentic
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expression of their own being and not a persona they develop to prove to others that they are effective.
These individuals define themselves on the basis of "being" rather than "doing".
Everyone, from economists to psychologists, tries to understand change. Nowadays people also try to
measure change from the turbulence created in the atmosphere. However, exploring the nature of change
is not a new challenge. Just as change requires new ways of thinking, it also involves a rethinking of the
"architecture" of organisational structures and relationships.
We do not hear much any more about overcoming resistance to change, which 10 or 15 years ago was one
of the most popular topics of management books and management seminars. Everybody accepts that
change is unavoidable. But unless an organisation sees that its task is to lead change, that organisation —
whether a business, a university, or a hospital — will not survive. In a period of rapid structural change
the only organisations that survive are the "change leaders".
Organisational change has many sides to it. It is both subtle and dramatic: On the surface, many
organisations appear to be stable, unified and generally efficient in their day-to-day operations. Yet
beneath the cover, the effects of continuous change are creating new patterns and structures, changing the
way organisations define themselves and how they respond to customers, etc. Organisational change can
be planned or unplanned, formal or informal, directed or non -directed, fast or slow, conscious or
subconscious, negative or positive, visible or invisible.
3. 4 Organisational structure
At Godrej and its group companies, there seems to be clarity in the roles and responsibilities of
the employees from middle management to the blue collared workers because of the emphasis on
Standard Operating Procedures. However there is considerable amount of freedom given to each
employee to conceive and implement improvements (kaizen) continuously in the organization.
Organizational culture is also not same across the group companies as the very nature of each company
dictates its style of functioning. For instance, the manager-employee relation in a relatively new and
dynamic organization like Godrej Infotech might be very informal while in a traditional
manufacturing based company like Godrej & Boyce, the relation might be a more formal one.
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In an internal assessment, there exists a clear differentiation across various levels in the
organization with a hierarchy of authority and reporting relationships, the mechanism which Godrej
adopts and the employees. An overwhelmingly large number of respondents (97%) believed that
senior management is easily approachable, though, 40% believed that power distance does exist.
However information on the kind of interaction that happens between the middle management and the
grassroots level employees is not available to draw any judgments.
Owing to the divisionalisation of Godrej that happened in the 90s, organizational tasks have been grouped
into roles and similar roles have been grouped into functions. Each division of Godrej has functions to
take care of the core and support activities. Thus the horizontal differentiation of tasks is achieved in
Godrej and integrating these various functions in the group companies is done through Task forces
that encourage Kaizen practices across Godrej to mitigate this differentiation is by informal
interactions between the top management
3.4.1 Culture
The influence of family-controlled business can be seen on the organizational culture. The mission and
vision statements are clearly defined for the group companies and the family and the senior management
adheres to it.
Vision: Godrej in Every Home and Workplace
Mission: Enriching Quality of Life Everyday Everywhere
Values: Integrity, Trust, To Serve Respect, Environment
About 85% of the respondents rated Godrej above average and above in terms of adherence to
the mission and vision statements. However, 43% of the respondents believed that family control has
reduced dynamism to an extent and that Godrej has not utilized its resources and assets fully. Godrej‘s
recent foray as Godrej Properties is a step towards capitalizing its vast land assets.
3.4.2 HR Practices
The family control has led to greater employee care and employee-friendly work practices at
Godrej (74% of the respondents favored). HR practices followed in Godrej are considered amongst the
best in the industry because of which they have been ranked amongst the Top 20 in the 'Great Places
to Work' in a study conducted by the Grow Talent Company in partnership with the Great Places to Work
Institute, Inc, USA and Business World. Godrej was also honoured with the Best Managed
Workforce Award from Hewitt Associated-CNBC-TV18. People Practices at Godrej are guided by six
strong, well defined principles:
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1. Strong values which have helped in setting high standards of ethics at work place. They form the key
principles of behaviour and belongingness which form the core of any culture that prevails in a company.
There is no compromise of any kind on this front come what may. Every employee joining the company
has to sign a code of conduct which helps in creating awareness about the rules and regulations that are
to be abided by in day to day work. They believe in the policy that ―economic success goes hand
in hand with ethical responsibility‖. Approximately, 66%/24% of the respondents rated Godrej having
excellent/good ethical practices, respectively.
2. Providing employees a wide scope and platform to perform. The diverse portfolio of products and
verticals provide the employees with an opportunity to work across businesses and functions within
the company giving them a great deal of exposure in the business. People are trained to perform multiple
tasks and leaders are developed internally (75% of the respondents favoured).
3. Speed and flexibility in decision making empowering people on the job – A conducive environment to
grow faster, thrive better and succeed together. This has motivated employees to perform better and
deliver faster (63% of the respondents favoured).
4. Freedom and autonomy at work and freedom to promptly recognize and reward performance.
A powerful tool that motivates people to give their best is to link a substantial part of their
compensation to a robust financial measure like Economic Value Added. This incites them to
outperform their expectations as long as they are within the value standards.
5. A specialized ambience at work to thrive. A very competitive work force, professionally
managed entity recruiting talent from top B-schools building professional leaders. Three pronged
strategy followed
a. Set stretch goals
b. Help achieve them by providing development inputs and coaching
c. Recognize achievement through rewards
6. Creating an organization that advocates learning amongst its employees. Feedback from employees is
taken in multiple ways to get an idea about the kind of perception. Know Your Consumer Programs,
internal customer satisfaction surveys, Voice-of-the-Employee Program and 360 degree feedback
programs are some of them. Employees have the flexibility to draft their own development plans and
take them forward after consulting with the seniors. It has defined performance tools.
The group has defined performance tools and processes, which reward top performers disproportionately
and identify weak performers. It offers performance-based variable remuneration, which is dependent on
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EVA of the group. This is essentially a policy of participative management, which instils a sense of
responsibility, accountability and also the ability to take calculated risk in the interest of the
organization, in the employees. The group gives adequate support to the employees’ ideas and say in the
functioning of the organization. Approximately, 67% of the respondents rated Godrej, good and above, in
terms of, support by senior management to the ideas of the employees. However, strategic
decision making lies with the senior management (39% favoured), who get adequate support by the
family (28% favoured) and involves middle-level managers as well.
The learning culture at Godrej is based on a conservative, innovative and risk-free approach. This
can be interpreted, to an extent, as due to the influence of strong initial family control, which defined the
boundaries for the employees. Approximately, 42% of the respondents favoured it as conservative and
37% as innovative and minimal support to the risk taking approach. The group has well defined formal
training procedures, with a focus on on-the-job training. It also has continuous training programs to
hone the competencies and skills of the employees, for instance, through the concept of "GOLD" - the
Godrej Organization for Learning and Development. It helps employees acquire new skills as well as
hone existing skills and strengths. The talent management process at Godrej identifies talented and
passionate people from diverse backgrounds, take them on board and later help them shape their careers.
GCPL has an employee development programme – IDLE (Internal Development of Leaders) through
which it provides MBA education to its talented employees through a tie-up with Symbiosis.
The attrition issue at Godrej has increased in the last few years, due to more opportunities and desire for
higher education. Godrej has taken measures, such as funding the higher education of the employees to
contain the attrition rate to an extent.
Godrej has taken various initiatives for care of its employee and their families. It was one of the early
adopters of employee welfare schemes, such as holiday benefit, provident fund, bonus, gratuity and
medical and food facilities. Some of the other steps include the following:
o Listening, Sharing, Inspiring Employees by using various channels to ensure there is ample
communication across and within teams and the hierarchy. Chairman‘s Tea, voice of the
employee and induction programs are some of them.
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o Enlightened Employment Policies encompass strict code of conduct, such as non
discrimination and whistle blowing and adherence to safety, health and environment standards.
o Balancing Work & Life by flexi - time working wherever operationally possible, company
buses at regular intervals too help reduce commuting stress
Godrej was steeped in traditional values because of the nature of family business. The result was that the
organization was conservative. The group could not avoid bureaucracy due to presence of family
members at the power centers (as board members or at the senior management). Approximately,
49% of the respondents believed the organization to be bureaucratic. Ironically, this goes against the
believed perception of family-run businesses as having lesser bureaucracy. Perhaps, it is the scale
of Godrej group‘s operations, which is responsible for bureaucratic culture.
Therefore, even though the family orientated work culture has been fairly successful in winning loyalty
and trust of employees, there has been instances of conflicts between family and employees. There are
two specific instances to quote, which occurred in 1972 and 1979, when due to aggressive clashes
between labour and the family, Naval Godrej and his daughter-in-law and mother-in-law were stabbed.
This incident eventually led to the death of Naval Godrej.
Some conflicts are necessary for any organization so as to increase its effectiveness and bring
some change. The birth of GCPL from Godrej Soaps Ltd., was a successful consequence of the initial
conflicts, giving the shape to what Godrej Industries Limited is today. Godrej Industries Limited managed
by Adi Godrej has a very dynamic and open culture and has ventured into diverse sectors. However,
Godrej & Boyce continued to follow a conservative attitude and was content with moderate growth rates
(of 30%) and was relegated to an also ran from market leader in many segments like appliances,
home and office furniture and fast moving consumer goods.
It is not sure whether this cautious approach was by design or whether it is the inertia of the pre-
liberalization era that still exists in the system, but it created a lot of frustration in youngsters who were
yearning for part of the action in the markets. A large part of the management trainees who joined in the
nineties have quit the company.
Instances of innovation have been few and far that Godrej has never been identified with innovative
practices. Kaizen has attempted to change that mindset but it has primarily been aiming at improving
existing processes rather than innovation. In fact, Kaizen was implemented in a very traditional manner
and could not attract employees’ interest. The strict adherence to rules and meetings created
psychological pressure losing interest of some of the employees. Godrej had been very slow in adapting
to the uncertainty in the market owing to the mechanistic nature of the organization and it clearly shows
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in the market share of its various traditional businesses when compared with the leadership
position earlier it used to command. Approximately, 66% of the respondents rated Godrej as average
and below it in terms of innovativeness.
The focus on innovativeness is more in GIL as compared to Godrej & Boyce. GIL introduced the
concept of ‘blue’ and ‘red’ team, which worked independently to formulate Godrej‘s future strategies.
The results of their exercise had to be evaluated by a ‘plum’ team, comprising the top management. It
was an innovative concept empowering the employees and providing good quality of work. In
fact, they also invited management guru, Prof. C.K. Prahalad, for addressing the teams and guiding them
on the approach they could follow. The results of this exercise are awaited and it would be
difficult to comment at this time.
3.4.3 Steady transformation
Organisations have always been wary of drastic change. Taking an organisation through the change
process, with the help of experts and at a steady pace, gives employees the necessary momentum and
prepares them for the future. That was how Godrej & Co. was salvaged.
Organisations have always viewed change with trepidation. Change usually involves uncertainties.
Employees are reluctant to make any drastic changes as they find their routine comfortable. So,
organisations either force the change on them or avoid making any serious changes.
However, certain organisations take a middle road. These organisations implement the change at a steady
pace, based on the pulse of the employees.
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3.5 Structural Changes
Godrej has since 1990 deliberately undertaken a process of self-improvement. The main problem faced
by the group in 1991 was that it was getting too bureaucratic with slow pace, getting bogged down in
routine matters, too many slow-moving products and a reluctance to do away with old practices.
The key to break this shackle, Godrej realized is that to make everybody accountable and responsive.
Godrej went all out into incorporating corporate governance in all its subsidiaries and group companies
(both listed and unlisted). Each group company had a CEO or a President (not necessarily
from the family). Full freedom was given to these leaders to devise strategy for the companies and lead
Godrej in the liberalized and open economy. However the board of each company still has some family
members to oversee the working of the top management and the company and there is consultation at
both family and business levels on critical issues.
This change led to the concept of divisionalisation with each division as a profit centre, decentralization
of decision-making and empowerment of managers at the grassroots level, and Quality the watchword.
There was a realization on the part of Godrej that for all their successes in the past, they still fell short of
a world class organization and they had to make up for it. Along with implementing innovative
techniques like TQM for technology, product and process improvement there was a compelling
need to ensure that a balance was maintained between new ideas and enduring wisdom
gathered through the century old experiences, especially on the human side by preserving the
traditional bonds of trust which the owner-top management had always enjoyed with employees at all
levels.
3.6 Product Changes
In the washing machines segment Godrej is catering to all pockets as they manufacture semi- automatic
and fully automatic. In the fully automatic category, Godrej has both front load and top load models with
14 variants of Allure, Enchant etc series having capacity ranging from 5 kg to 7 kg.
The latest washing machine Ergoz, having a capacity of 5.5 kg and 5 kg has a unique tilt open drum
design. This design has been specially created for the comfort and convenience of the users and helpful
for those with back or knee problems. All models have different advancedfeatures like air clean
programme, ozone clean technology, turbulator, fuzzy logic, u sonic technology to name a few.
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In the world of home appliances there is more than enough choice for consumers today, with more and
more new brands entering the market every day. However, one brand that has successfully built and
maintained consumer trust for decades is Godrej. Manufacturing different products, right from
washing machines to refrigerators, from microwaves to air conditioners and now, furniture, Godrej has
proved to be a reliable company in every field.
In the refrigerator market, Godrej isn't a new player and it has a vast collection of refrigerators. It has
been manufacturing refrigerators since 1958. Revamping the cooling technology with PUF, launching
100% CFC free refrigerators, coming up with the Godrej Pentacool with five sides cooling in and Penta-
fresh Technology are all examples of Godrej's style of working. The latest series Eon that has been
recently launched has a got a large number of new and innovative features such as cool shower
technology, swivel shelf, integrated ice hangers, tinted shelves, anti – B technology.
All new semi-automatic washing machines from Godrej, GDS 950, have all the features that one needs.
This machine with 8.5 KG wash capacity is designed with HexaScrub and Pulse4 technology. While,
HexaScrub is a useful blend of powerful pulsator and six micro scrubbers, the Pulse4 refers to the
powerful central pulsator supported by three roto wheels Latest fully-automatic washing
machines from Godrej are equipped with DAC (Dynamic Aqua-Power control) technology. This feature
of the machine is used for controlling the water flow and power cuts. Machine goes into the sleep mode
and resumes its operations whenever supply of water or power restores. In Microwaves, Godrej
uses the latest technology, Microsteam, which helps in keeping all the nutrients of the food intact.
This feature reduces the fat content and makes the food almost fat-free and also helps it.
Godrej soaps: Evita is first launched in 1990’s and later relaunched as age control soap. Godrej soaps
include Cinthol, Evita, Fresco, vigil, Ganga, Fay, Crowning glory, Shikakai, Fairglow, No.1. In 2007
Godrej launched Vigil.
3. 7 Segment changes
Godrej Interio has started designs for young and fun loving customers. They were concentrating on
slightly aged people till date but now they were into new designs.
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3.8 Technology changes
The Godrej story began in 1897 with the manufacture of Locks. Since then, Godrej Locks has set several
benchmarks in the locks industry – from the first spring-less lock in 1907 to the iconic 'NavTal' in 1954 to
the Ultra range in 1995 to the revolutionary 3KS in 2007. The security levels are divided into 5 by Godrej
and by all means, Level 2 locks (at the most level 3) should be the best suited one’s for the doors in the
households. The locks under Level 2 (commonly referred as Godrej Ultra locks) are further divided in
various types such as Ultra Padlocks, Ultra furniture locks, Ultra Rim, Ultra Mortise, Cylindrical locks
and Ultra shutter locks. Among the Level 2 locks, the Ultra Rim type is the most widely used lock which
further has different variations like Ultra Vertibolt, Ultra Nightlatch, Ultra Retrofit Adaptor, Ultra
Latchbolt, Ultra Twin bolt and Ultra Tribolt. All level 2 keys use the Dimple key technology which
provides 10 crore key combinations making extremely difficult (read impossible) to duplicate
the dimples. Level 3 keys are the upgraded version of Level 2 Ultra keys, which beside being easy
to install and upgrade, provide almost 200 crore key combinations.
Refrigerator technologies: Silver shower technology, Anti- B technology, SIF technology, ZOP
technology,
Air conditioners technologies: Gold fin technology, Blue fin technology,
Packaging change: packaging soap is changed for Cinthol soap
Logo change: It changed its logo in 2008.
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3. 9 Organisational Strategies
Godrej group has been active in and outside India in its history of last 100 years. Its progress
has been shaped by number of political and socio-economic changes in India during the same period. The
strategic decisions are driven by the senior management, with the support of the board members of Godrej
family. Some of the salient features of Godrej‘s strategy are the following;
R-Strategy (Blue Ocean Strategy)
Godrej has been a pioneer in number of sectors in India. It has been maintaining its leadership in
security products division since the starting of its operations. The second and third generation of
Godrej family continued to follow the strategy of entering into uncharted territories of its founders.
Godrej enjoyed first mover advantage in most of its ventures, as it directly touched the masses and
endeavored to improve their quality of life.
o Introduced first lock with lever technology – Anchor brand
o Introduced first Indian safe in 1902
o First company to manufacture soaps from Vegetable oil in 1930, which was later followed
by other FMCG players. It manufactured Alpha Olefins from Olechemicals instead of from
Petrochemicals.
o Introduced mechanical typewriters in India in 1955 and electronic typewriters in 1985.
o First organized business house to enter into the material storage solutions in 1956.
o First Indian company to manufacture refrigerators in 1958.
o First to introduce Poly Urethane Technology in India in 1957
o First company in India to manufacture high pressure doors for Marine applications.
o Its brands in the insecticide market – Good Night, Hit and Jet are one of most well
established/organized brands in this sector.
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Role of Communication in Effective Change Management
Unrelated Diversification
Godrej was synonymous with locks for a long time. The lock making business has evolved to a security
products division with products, such as Electronic safetylocks, specialized locks (for example, for
Nuclear Reactors, Marine applications), ATM safes in the market.
The company started to manufacture steel cupboard and cabinets in 1923. It forayed into consumer
appliances sector by manufacturing of refrigerators and microwave ovens, material handling equipment
division by manufacturing of forklift trucks, precision components division by manufacturing of
satellite components, rocket liquid propulsion engine, cryogenic engines. Some of the other sectors in
which Godrej has its operators are life sciences (tissue culture), Life Insurance, Real Estate,
Telecommunications and Medical Diagnostics. Godrej‘s strategy of unrelated diversification is more
prominent in later generations. Essentially, this follows the trend in family-run businesses in India,
such as Dabur, Wadia and Murugappa group, which did not diversify during the control by initial
generations. The factors responsible were restricted Indian economy during the pre-independence times.
The support from government increased during the later generations helped the firms diversify
into unrelated sectors. Unlike Murugappa, Kirloskar and Dabur families which have consolidated in the
last few years, Godrej has adopted an inorganic growth strategy.
Researchers have averred that the strategy of former set of families has been driven by decision-
making through consensus, whereas for Godrej it has been by risk minimization and preservation of
wealth with family keeping a trusteeship role. Godrej acquired Transelaktra to increase its presence in
mosquito repellant market. GCPL made a successful acquisition of Keyline Brands Limited, a
prestigious name in the UK, increasing its international brands portfolio with a total of seven
international brands. It also made a recent acquisition of Rapidol South Africa increasing its market
share to 80% in South African ethnic hair color market.
Some internal restructuring has been taking place as well. Due to independent decision making of various
subsidiaries, this has been referred to as acquisition. For instance, the recent transfer of Godrej Global
Mideast FZE from Godrej International to GCPL is a step in this direction. Godrej properties is also
planning to enter into a joint venture with Godrej Agrovet to develop the land owned by them.
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Role of Communication in Effective Change Management
Globalization Strategy
During the pre-independence period Godrej‘s operations were focused in India. After independence it
started to expand its operations across diverse fields across different geographies. With the
economy opening-up in 1991, it entered into alliances with international players. Almost all the
Godrej groups of companies have alliances with top Multi-national companies for learning from their
best practices in local geographies
Godrej‘s clientele is impressive including institutions, such as BARC, ISRO, Indian Air Force,
Navy, HAL, Indian Parliament and MNCs, such as Hitachi, Reliance, Conoco Philips, Bechtel,
Valero, MOOG, Ion America Lab. The group has 20% revenues from operations outside India and it aims
to increase it to 30% within next 10 years. As per Adi Godrej,
"For us globalization is beyond exports and imports. We have manufacturing facilities abroad in
countries such as Malaysia, Vietnam, South Africa and the U.K. We will globalize in select
businesses where we have the global size and competitive advantage such as Office Equipment, Hair Care
and Household Insecticide. 'Godrej' is an umbrella brand for us and we have decided to invest in long
term brand accretion".
Functional Strategy
Godrej leverages its efficient processes in providing products of low cost and high quality to the
customers. Godrej Soaps (parent company of GCPL) initiated Total Quality Management (TQM)
by implementation of Kaizen in March 1991. At that time, many organizations embarked on ISO
9000 standard as a benchmark for quality improvements. However, it did not cover employee
management and did not reduce operational costs. Godrej Soaps, having identified this issue, switched
to Kaizen. By 2001-02, the success of Kaizen at Godrej Soaps was implemented across all the
factories. GCPL is working to optimize its inventory levels at the distributor and retailer by switching to
an inventory management system based on a Collaborative Planning,
Forecasting and Replenishment (CPFaR) model instead of forecasting and push model. The system,
having implemented, is expected to reduce the inventory levels by 3-4 days. In this manner, Godrej
continues to emphasize the importance of dealers/suppliers in its operations. The image and Godrej brand
has been instrumental in winning suppliers’ trust. Approximately, 74% of the respondents believed that
the family control has led to strong relations with the suppliers and customers, as well.
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Role of Communication in Effective Change Management
Other measures of cost minimization include setting up manufacturing facilities in low tax areas, such as
Baddi in Himachal Pradesh and in Assam. Godrej Soaps used the ERP solution– MFG-PRO in 1998
and then SAP to improve its distributor management process. The system integrated suppliers,
distributors and customers and reduced the lead times. Godrej & Boyce implemented the balanced
score card in 1998 and has achieved operational efficiencies by using it. The lock division of
Godrej & Boyce commercialized the computer-coded dimple-key lock, a feat that has been achieved by a
very few manufacturers worldwide. Godrej has taken advantage of its efficient processes by offering
consumer products specific to medium-income to low-income segments (though it also targets
premium segment). It offers a range of products, with most of the products sold for the common mass.
However, it has not been able to successfully target premium class and has been able to attract the
medium and low income groups. Godrej No 1 is the largest selling toilet soap in the country. The
percentage share of revenue from Soaps segment has reduced as GCPL is focusing more on hair
color and toiletries market in India. This segment is high growth segment having low penetration
markets in India fetching high margin to Godrej. GCPL is focusing on mass market for selling hair color
products. It launched ―Godrej Fashion Hair Colour‖ in sachets of different hair colors costing Rs 10 for
mass market affordability.
Current Positioning
Beginning its journey as a security equipment and soaps company, the Godrej Group has today
diversified into a variety of consumer goods and services sectors. Its entry into new businesses has been
on the back of the sturdy and trusted Godrej brand.
Ashutosh Tiwari, Executive Vice President - Strategic Marketing, Godrej, elaborated, “Godrej is
one of foremost consumer brands in the country for the last 100-plus years, used by 470 million
Indians, with a scope straddling almost 70 per cent of household consumption. Over a period of time,
there was a need felt for the brand to re-energise its bond with a new, optimistic, resurgent India. The
brand adopted a new positioning of ‘Brighter Living’ on the bulwark of core consumer insights anchored
in the territories of freedom, optimism, progress and expression. Thus, there is a need to re-launch the
brand with a new synergistic identity and a cohesive and clear set of values capable of taking the Godrej
brand forward.”
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Role of Communication in Effective Change Management
Tiwari further said, “The journey since then can be divided into three phases: re-launch,
acquisition of new values and acquisition of new franchise. In Phase I, brand Godrej was re-
launched in 2008 in order to communicate the new brand positioning and identity. We initiated the
process of having a coherent portfolio under one Godrej. This was accomplished through the launch
campaign, ‘Good Morning Wall’, which successfully delivered the first step towards changing the
perspective of millions of Indians towards Godrej coinciding with the first season of IPL. This
was the first time that the Godrej master-brand was communicating with its consumers above the
margins of its category portfolio.”
“Phase II saw Godrej work relentlessly towards evolving beyond its traditional brand value of trust
towards new vistas of expression, progression, experience and empathy. This was accompanied by a
slew of initiatives to communicate the change in positioning and identity of various parts of the
portfolio. The first major communication initiative of Phase II was the Godrej Aerospace
campaign, which gave an unprecedented technological sheen to Godrej and helping it resonate with
values of progression and empathy. The second big communication initiative of this phase was production
and launch of India’s first branded lifestyle game show:
‘Godrej Khelo Jeeto Jiyo’, a unique concept showcasing the Godrej range of products wired into a
singular proposition of Godrej Lifestyle. After a long time, Godrej started becoming bigger than the sum
of its parts. The results were stupendous. Godrej started vaulting ahead on expression and experience
too,” he added.
Phase III has just started with the launch of GoJiyo.com, said to be India’s first virtual world. GoJiyo
brings together the power of social networking, virtual worlds and gaming on a simple, developing
country friendly browser based platform.
“Godrej has always believed in going beyond tag lines to imbuing all its communication
endeavours with aunique ethos and essence. The essence that guides us has always been
‘Brighter Living’, though it has manifested itself in a myriad different ways depending on the
communication vehicle used. Thus, ‘Enjoy a brighter Godrej’ or ‘Khelo, Jeeto, Jiyo’ or even ‘Explore,
Experience, Enjoy’, and so on,” Tiwari added.
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Role of Communication in Effective Change Management
The Agency’s Take
Dhunji Wadia, Managing Partner, JWT Mumbai, observed, “Charles Darwin had said: ‘It is not the
strongest of the species that survive, nor the most intelligent, but the one most responsive to
change’. Godrej, a brand trusted and loved by generations of Indians and used by 470 million Indians,
started being perceived as a good heritage brand, ‘but not for me’. It was looked upon as a ‘dated brand’
that the younger generation could not connect with. Thus, there was a need to re-launch the brand and to
build a cohesive and clear set of values that would take the Godrej brand forward.”
Reiterating what Tiwari had said, Wadia added, “Godrej’s journey since then can be divided into 3
phases: Re-launch, Acquisition of new values, Acquisition of new franchise. The launch campaign,
‘Good Morning Wall’, announced Godrej’s new identity and vision of ‘Brighter Living’. It successfull
delivered the first step towards changing the perspective of millions of Indians. Phase II saw Godrej work
relentlessly towards evolving beyond its traditional brand value of trust towards new vistas of expression,
progression, and experience and empathy.
This was accompanied by a slew of initiatives to communicate the change in positioning and identity of
various parts of the portfolio.”
Sonal Saxena, Associate Vice President and Client Services Director, JWT Mumbai, said, “While
individual Godrej portfolio brands have used brand ambassadors for their campaigns, Godrej has
never had a brand ambassador to support its corporate advertising and communication. Since the
re-launch in 2008, all communication done has worked towards strengthening the brands’ ‘Brighter
living’ philosophy. After launching Godrej’s new identity during IPL 2008, the next step was to
strengthen and communicate its technological and innovation edge. Godrej has continuously innovated in
technology. The best proof of this is in their mastery of aerospace technology, where Godrej is one of the
best placed Indian companies.
Godrej is a mission critical partner to ISRO for India’s space programme. This mastery has led to
technology innovation and upgradation across many categories that Godrej is present in. Some of
these innovations are in products formulation others are in the processes used to create these
products. The campaign was developed to help all Godrej businesses benefit from association with
aerospace technology.”
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Role of Communication in Effective Change Management
“The ‘Aerospace campaign’ was launched during IPL 2009. The message communicated was simple –
“The learning from space technology helps Godrej produce products which are superior in
nature”. Almost in parallel, Godrej helped co-produce an advertiser-funded TV property called ‘Godrej
Khelo Jeeto Jiyo’ – India’s first lifestyle show.
Through this show, Godrej showcased the various household and lifestyle products in its portfolio. The
grand prize was a ‘house’ from Godrej Properties. This TV property was extremely successfuland
helped Godrej connect strongly with its existing core franchise. While the above helped up the brand’s
levers in terms of empathy and technology, there was still the need to expand franchise - to reach out to
the optimistic, urban youth in India,” Saxena added.
Onlooker’s perspective
KV Sridhar, NCD, Leo Burnett, said, “I remember the Godrej from the Storewell days, when it used to
given to every girl as part of her wedding gifts. There were a powerful set of TV campaigns that made
millions of people connect with safety and almirahs. TV commercials changed from the earlier stance
and now it is a highly emotional brand. Godrej was one of the first brands to get into sponsored
programmes. They are one of early adapters on TV. Now, they are trying to modernize themselves. The
turning point was when people started bonding with Godrej emotionally in TV commercials. They have
tremendous equity. After Tatas, it is only the Godrej brand that people buy in an unconditional way.
Now, they are targeting the new age audience.”
Key Strength of Godrej Group
We believe that the core strength of the Godrej Group is its value system put in place by the founders and has been nurtured all along. The strong relationships with stakeholders – suppliers, dealers, employees, customers, have established Godrej brand in the market and increased loyalty. Some other factors nurtured on the values are as follows:
o Brand name – very loyal customer base, brand associated with durability and quality (especially
due to the products like steel cupboards, locks, steel furniture, safes)
o National presence – The group has been able to establish itself in virtually every district
of India through a network of dealers, distributors and branches reducing marketing costs tremendously. The trade is nurtured meticulously using a multi-tier approach (local/regional/national contact). The trade partnership sometimes runs into the second generation also.
o People – most valuable asset
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Role of Communication in Effective Change Management
o Relationships – nurtured with dealers and suppliers – drives down traditional marketing
costs
o Financial strength – ability to take up large projects through internal funding
o Resources – land, machinery, technology, competent management teams, social goodwill
3.10 Some Observations
o The family control has ensured that the vision and values of the founders are adhered to
by all the Godrej group of companies. This has set clear goals and objectives for the
employees giving a direction to the growth in interest of family vision and values. As the
group companies have common objectives in the interest of the group, it has reduced agency
costs giving it an advantage over its competitors. The family influence has enabled the group
companies to survive and grow even during adverse external conditions. It is believed that
family-run businesses less respond to economic cycles and have lower cost of capital.
o A resources based analysis of the Godrej group indicates that it is extremely rich in resources of
different types – tangible resources, such as manpower, machinery, technological expertise,
land, and intangible resources, such as brand, customer and supplier loyalty and acquired
knowledge. This is due to the scale of operations of Godrej, and has increased complexity with
time. Some of the long-term goals include investment in quality, infrastructure and enduring
relationship with the employees. Godrej also has had a typically higher duration of tenure of the
family members. This has helped them invest in long term benefits and also invest in next
generation leaders.
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Role of Communication in Effective Change Management
o The decision-making in a family-run business can also have emotional implications based on the
relationships between family members controlling the organizations. The success of such
organizations depends upon the behavior of family members. Many a times, conflict within
the family members, may lead to the downfall of the companies, though sometimes the
companies have emerged stronger as well. Nevertheless, it is always accompanied from
resentment of the employees. With some of the divisions, such as appliances division, which are
still facing the losses due to relaxed attitude of the Godrej, the group might have problems
deciding the fate of the division. There could be a lot of exit barriers that prevail like the family
culture and control, goodwill in the market social and psychological barriers, such as emotional
attachments of family members.
o There should be proper succession plan in place in family-run businesses, so as to maintain the
family control. This requires producing competent leaders capable of continuing the growth
of groups. Godrej has been following a succession plan wherein the younger generation of the
family are groomed under the guidance of the senior family members and outside professionals.
This is important to ensure that there is no crisis for power between professionals and
family members and only competent people reach the helm. In many families, for instance
in Reliance, the family members did their higher education from premier institutions of the
world, such as Kellogg‘s (Mukesh and Anil), which provided them a higher pedestal in
the hierarchical structure of their family business.
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CHAPTER IV
Discussion
Much of the findings in Chapter Four are attributed to the applications of the business phenomenon, reflecting a pragmatic dimension to which the company appeals. In spite of the significant progress that has been made with respect to both the literature reviews of theories and the case findings of Godrej Group, a disparity between these two aspects remains for discussion. This chapter aims to demonstrate a broader context of how the change management process tends to be practically viewed in relation to the integrative communication strategies.
4.1 Practical Views of Change Management
4.1.1 The Nature of Change Patterns
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In general, numerous change mode literatures suggested in past studies stem from more or less similar
grounds of change patterns, which refer to phases or steps in developing the change configuration. From
the findings, the major phases of change formulation appear to be consistent with Andersen Consulting’s
Organizational Change Model or AC Change Model (Figure 1) in principle. The diagnosis of the external
environments, together with internal factors, is of the preliminary maneuver to be undertaken. According
to the literature, the effects of globalization, regulation, technology, and competition become intensified
to which most of the international organizations need to pay very close attention (McCune, 1999).
Likewise, the internal factors, such as corporate identity, brand improvement, etc. also significantly
contribute to the instigation of organizational change. With these regards, the Godrej Group management
team and change agents are required to understand the current status of the organization in order to
determine the need for change, leading to brand and business status introduction. The following thought
in change formulation is to understand the objectives of the change or to identify the destination of
change achievement – competitive advantage, successful business or sustainable change commitment.
The aforementioned steps are explicitly applied to the Godrej Group case. In the process of the AC
Change Model, some components essentially touch upon main issues, such as leadership and workforce,
in which the Godrej brand and business status changes have readjusted where appropriate. In sum, both
the AC Change Model and the Godrej Group change phrases have shared a common rationale of a
systematic framework for change.
Consolidating improvements and changing some policies that are not associated with the vision
Planning to publicise short term wins or successes so as to encourage change continuity
Empowering others to change structures or policies in the way that will facilitate
Phase VI
Communicating the vision through numerous channels of communication
Creating a vision to achieve the desired end- result
Forming a powerful coalition of change – oriented individuals
Establishing a sense of urgency by relating to potential crisis and opportunities facing the firm
Phase V
Phase VII
Phase IV
Phase III
Phase II
Phase I
Identifying the destination for change achievement:
o Continuous change interventions
o Organizational culture and
change commitment
o Successful business
o Sustainable change management
Bridge the gap with communication
strategies
63
Understanding the status –quo of the organisation by considering:
o Environmental scanning
o Leadership attributes
o Top management commitment
o Resistance to change
Role of Communication in Effective Change Management
It is argued that there is no clear distinction between the formulation and implementation plans of change
in principle. This argument has been empirically proven in the case of Godrej Group against Kotter’s
ideas, as diagrammatically shown above. Each phase of the implementation stages closely associates
with the formulation process of the Godrej Group change scheme despite different factors concerned. A
strengthening argument can be made upon the fact that the change mechanism should be perceived as an
amalgamated, ongoing process where an entire series of action plans is logically outlined and developed
at once at the beginning of the process.
4.1.2 Reconsidering Change Resistance
Extensive research reveals that employees may resist change unless they understand the context of
psychological or economical threats (Hayes, 1996; Baird et al., 1990). It seems to be unfair for
employees to assert that their change resistance constantly impedes the change efforts. The underpinning
reasons need to be researched from several cases with different organizational settings since the existing
concepts of change resistance may not be applicable to other circumstances. The majority of employees
of Godrej Group have not completely denied the change. Rather, a great deal of in-depth information
about changes is required to optimize the level of change repercussion. They are basically aware and
understand why the company needs to change. In connection with that, the degree of reactions can be
determined by the degree of the receiver’s understanding of the content.
Moreover, the terminology used in public could have been reconsidered. As Piderit (2000) proposes the
phrase “resistance to change” be replaced with “employee’s responses to change,” this has been supported
by one of the top executives of Godrej Group. The reason is that it seems to be psychologically
Institutionalising the new approaches by publicizing the firm’s success of changesPhase VIII
Identifying the destination for change achievement:
o Continuous change interventions
o Organizational culture and
change commitment
o Successful business
o Sustainable change management
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Role of Communication in Effective Change Management
acceptable and practically applicable to the phenomenon. The employees should be viewed as friends,
not foes for change.
4.1.3 Rethinking Top Management Commitment: A Strategic Spearhead of Change
Generally, top executives are considered “knowledgeable captains” behind the steering wheel of change
in the organizations. Corporate strategic directions mainly reflect upon their determination and courage
to lead changes. However, evidence shows that they are anxious about organizational change due to costs
and time scales involved (Stickland, 1998; Sastry, 1997; Stace and Dunphy, 1994). The aforementioned
statements seem to be paradoxical in a pragmatic sense. On the one hand, they intend to navigate changes
successfully, but on the other hand they live in fear of change failure. Oftentimes, change success is
determined by the degree of risks on which the managers attempt to take. The Godrej Group case reveals
that the top management team’s actions fall into such a paradox. According to a Senior Manager of
Godrej Group, the top executives initiate the general principle of the brand and business status changes
but fail to carry on an efficient engagement of change schemes. They are supposed to demonstrate role
models to show a strong “proactive” commitment to change, such as challenging managers who refuse to
change, reorganizing the structure of the Board of Directors and dismissing unproductive executives from
the Board.
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Role of Communication in Effective Change Management
4.1.4 Final Destination: Organizational Culture and Sustainable Change Management
Creating an effective change management scheme involves creating an environment in which all
organizational members can excel (Weiss, 2001). The notion of corporate culture comes into play
reshaping the organizational climate during and after the change missions are undertaken. As implicitly
scribed in the case findings, changes in organizational culture are highly anticipated upon completion of
the change schemes. A new attitude and behavior toward an increasing degree of competitiveness tends
to facilitate a long-term effect of organizational change in terms of business operations. That is to reform
the extant culture to be much more people-profited, customer-focused, and decision-decentralized.
In spite of being extensively used in various academic contexts, the term “sustainability” suggests much
more than it simply connotes – lasting for a long time. It also conveys the essence of embeddedness to
the change applications for which Godrej Group is striving. Successful business and incremental
profitability are no longer to secure sustainable change management since employees might not have
developed their commitment to change yet. Therefore, the ultimate aims of the Godrej Group changes are
to bring a new organizational culture and a sense of sustainable change management to bear upon the
organizational members, thereby achieving the long-term competitive advantage over other competitors.
4.2 Communication Strategies Reinvigorated
4.2.1 Formulating the Integrative Communication Strategies
By applying the idea of the change initiative development (Pettigrew and Fenton, 2000) tocommunication
strategies, the management team must think and act holistically and communicate as such to several
fronts in careful alignment. In essence, communication strategies will not succeed if done piecemeal.
They should be done in form of an integrating framework, incorporating non-communication factors,
which can yield an enlightening strategy to implement the plan in a broad perspective. And that term
“integrative communication strategy” is specifically given in the Godrej Group case.
Originally, Mohr and Nevin (1990) define a communication strategy as the use of a combination of
communication facets, which include frequency and formality of communication, content of
communication and channel of communication. From the findings, this definition is proven true in
practice. Nevertheless, in order to become systematically integrated, an emphasis on the evaluation
concept of the communication strategies needs to be incorporated, so that the feedback system of the
communication becomes established thereafter. Supported by empirical evidence in the literature, a two-
way communication enables change agents to assess the effectiveness of change strategies and,
simultaneously, rectify unfavorable strategies to promote smooth change efforts.
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Role of Communication in Effective Change Management
In general, the communication strategies in Godrej Group are consistent with past research studies. Most
of significant elements of communication have been closely scrutinized prior to formulating the strategy
accordingly. The findings of the case reveal that the audience-driven focus along with an appropriate
tone of the message have to be identified in the first place. Based upon the notion of “what the employees
need to know,” the content or message is tailored and transmitted through several rich channels of
communication, such as team briefings, executive presentations, launch packs, electronic mail, and
internal publications. One of the communication strategies that have been implemented is to deliver “a
formal message in an informal way.” It proves to be successful in creating awareness and understanding
on the issues, but not commitment as such. Overall, the integrative communication strategy seems to be
well thought out and effectively facilitate these changes. However, further discussions can be made upon
the adverse aspects of such strategies after the implementation takes place.
4.2.2 Unexpected Pitfalls of the Integrative Communication Strategies
Practically, there are numerous factors that might involve in the ineffectiveness of the communication
strategies. According to the literature, psychological filtering, subcultures, and personal perceptions are
of the most common barriers to effective communications (Schermerhorn, 1998). In this case study, the
pitfalls of communication have not only derived from the individual level but also the organizational
level. Information overload in each business unit becomes a chronic impediment for employees because
the unit attempts to create its own identity. At the same time, the problem of information insufficiency on
the holistic picture of Godrej Group remains slackening in some business units. One of the Godrej Group
top executives views that the internal communication is good in parts or “patchy.” The management team
ends up telling rather than listening to what employee’s voice back. Primarily, the strategy focuses on
two-way communication. It turns out to be one dimensional or one-way communication. A large number
of written materials, such as newsletters, memos, etc., are sent to employees but there is no guarantee
whether they are going to read them or understand the issues clearly. In this respect, Sinetar (1988)
suggests that an organization undergoing change transitions should pursue the informal discussion group
as a powerful agent for change. Its underlying philosophy is to communicate the change issues with
parties concerned in an interactive atmosphere. Essentially, face-to-face communication aims to be
reinforced and mobilized by the open discussion in regard to the change issues. The work of Johnson et
al. (1994) posits that the team briefings in each business unit are characterized as a formal mode of
communication, leading to a non-substantial group interaction.
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Role of Communication in Effective Change Management
4.3 Integrative Communication Strategies in Change Process
Change management and communication has been literally considered Siamese twins – sharing
interdependent properties and resources. Communication is not only spread throughout all change
activities, it is at the heart of many organizational transformation aspects. A new verge to facilitating
change management is to infuse the right medicine of communications into the vessel of change
problems. Axiomatically, the degree of impact on the organizational level tends to hinge upon the degree
of a change magnitude with which the top management or change agents reckon.
In the Godrej Group case of brand and business status changes, the integrative communication strategy
plays a pivotal role in bridging the gap between the present and the future change states. The impression
from the study attributes this to a systematic approach to measure the effectiveness of the communication
– encouraging employees to give responses toward the strategies put forth. That is one of the main
elements of the integrative communication strategies at Godrej Group. Within any change process,
communication schemes aim not only to create awareness and understanding of the issues but also to
influence continuous change interventions, including publicizing the change progress report to
employees. Connected to that, the organizational culture change and employee commitment to change
for Godrej Group gear toward reforming the extant culture to become much more competitive in an
atmosphere of harmonized corporate identity.
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Role of Communication in Effective Change Management
CHAPTER V
5.1 Conclusion
Although change may seem ubiquitous, it is an unnatural provision in which most organizations deal.
Normally, change produces a crisis when it significantly disrupts expectations about important issues or
events. As such, the upheaval of change becomes inevitable to the extent that its magnitude has a far-
reaching impact on internal employees and pertinent stakeholders. Most of academics and practitioners
have been tempting to search for a best practice among a repertoire of potential change drivers developed
elsewhere.
It nevertheless appears that each organization is best at adapting and customizing its own distinctive
blend. What works well for some may not be effective for others. For these reasons, a case study
approach about change management tends to be asserted for this uniqueness.
In association with the above rationale, communication strategy, which serves as the key fundamental
part of the change management strategy, challenges the traditional mechanisms in terms of facilitating a
transitional hurdle of change. In essence, communication strategies will not succeed if done piecemeal.
They should be done in the form of an integrated framework, thereby broadening horizons toward a
holistic aspect of the entire organization. Empirical evidence in past research shows that the functions of
organizational communications are analogous to those of human blood vessels. They act as nutritious
substance transmitters or change message carriers throughout the body or the organization so as to
maintain healthy conditions or to arrange the corporate realignment.
Godrej group has been very successful since the last 100 years. Much of the success of the group can be
attributed to the values and vision of Godrej family, which continued as generations passed-by. During
the latter half of the century, Godrej adopted strong corporate governance practices and tried to
shed its image of a family-run business.
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Role of Communication in Effective Change Management
However, looking at the vast scale of its operations, Godrej still has a long way to go to overcome the
existing inertia in the organization, due to the family control. The current strategies adopted by Godrej
Industries Limited are more in line in this direction; however, Godrej & Boyce is still lagging
behind. The group has an enormous potential and with lots of opportunities in the India market, it
will have to be more dynamic to sustain and grow in the future.
5.2 Implications
Academic Implications
Although the literature on change management and communication theories has been prolific in the
academic research, an integrative pattern of both constructs is under investigated. This volume of
research aims to provide a theoretical framework of the integrated role of communication strategy
formulation in conjunction with the change management process.
Based on a case study of Godrej group, such a framework has been theoretically explored and empirically
demonstrated some important aspects of the academic stance. That is, the formulation of communication
strategies must be harmonized with different change stages to ensure the change messages are effectively
conveyed to the right target group of change. A derivative of the framework, the study partially adapts
the work of Armenakis and Bedeian, 1999; Burnes, 2000; Hellriegel et al., 2001; Kreitner and Kinicki,
1995; Kotter, 1995; Maltz and Kohli, 1996; Sikora, 1994; and Sinetar, 1988 as foundational grounds of
theories to apply for the investigation of the change processes as well as communication flows across the
organization.
Practical Implications
In mirror of the Godrej group case, the research study aims to explore how executives in various
management levels perceive the internal communication process and formulate the appropriate strategies
not only to optimize the repercussion of change but also to bring out greater success in the future. By the
same token, it reflects upon which senior managers need to conceptually understand how different
communication practices lead to the desirable organizational change. Additionally, it has shed some light
on a pragmatic process of communicating the change efforts to the internal parties concerned.
The author believes that the practical applications can be extended to other organizations, regardless of
size, and, possibly, across the industry. However, they should at least share a similar pattern of change
issues -- either the brand or the business status change. In this regard, a certain benefit from this study
tends to be reaped in general. Last but not least, an integrative framework, of which numerous factors of
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the communication strategy in the change context are composed, serves as a functional guidance for
managers to navigate a plan of change.
5.3 Research Limitations
Provisional to this research conducted within a limited timeframe and space, the findings could not have
been yielded at a greater extent as anticipated. The constraining boundary of the research hence is
necessary to be revealed for the sake of future research improvement. Also, it helps the readers to
determine the degree of credibility of the research results. The constraining factors are attributable to
1) Inherent limitations of the case study approach and
2) Certain features of the author’s research methodology choices.
First are the inherent limitations of the case study approach. It has been long argued that the single case
study is susceptible to the low level of validity of the findings, although the multiple-method triangulation
employed has ensured that their internal validity is high (Yin, 1994). In this study, the research focus
embarks on exploring the depth of the communication strategy formulation in change issues within a
single organization rather than the breadth of the phenomenon in different organizational settings. As
such, the generalization ability to other organizations is relatively confined. The author believes that,
with a comparatively similar change matter to the case of Godrej group, the partial findings of the
empirical framework can be practically applied to various circumstances, whereby communications play a
major role in facilitating change efforts across the organization.
Second, a certain feature of the author’s research methodology choices has somehow limited the amount
of information obtained for data analysis. The interview arrangement with every senior manager or key
person concerned is perhaps beyond the author’s capability to control over a specified time period.
Therefore, a mixture of interview formats, which are face-to-face interviews and electronic interviews,
are of the best options to cope with this impediment. In regard to the electronic interviews or e-mail
interviews, an interaction between interviewers and interviewees during the course of the interviews,
which may lead to some further insights, does not seem to be technically plausible. Supported by a
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Role of Communication in Effective Change Management
theory of qualitative research methods, the face-to-face interviews tend to bring more fruitful perspectives
on the subjects, and that a greater amount of relevant information is likely to be incremental. In addition,
the interpretations of data in this study are not meant to be superior or exclusive to other potential
interpretations. Despite being undertaken by the author’s best discretion, they are still subject to bias.
Such a bias may be alleviated if the data are to be interpreted by several researchers, thereby achieving a
balance of the viewpoints.
5.4 Further Research
From these research findings, there are several intriguing areas of research left unaddressed and worth
investigating for empirical evidence and elucidating theories. First, this research aims to focus merely on
the formulation part of the communication strategy in change contexts but less attention is paid to the
implementation scheme of the communication strategy. As such, it would be useful to conduct further
research on the implementation part of the communication strategy in a similar circumstance, where
diverse sub-units are focused to strengthen the validity. A holistic and systematic case analysis tends to
provide both academics and practitioners a better understanding of those issues in a broader context.
Second, the longitudinal approach is suggested to be part of the research methods for further research.
Such a method would be very practical in observing the employee’s reaction toward changes. Also, it
helps the researchers to understand how behaviors and attitudes are developed and influenced (Pettigrew,
1990). Since the interviews enable the researchers to comprehend a phenomenon superficially, the
method of observations serves as a powerful tool to delve into the underlying reasons of the observed
reactions. As a result, more in-depth findings can be yielded. In connection with that, the study of how
the brand and business status changes contribute to the organizational culture change should be
empirically researched.
Finally, in order to challenge the framework of the findings, the use of contrasting observations from
multiple cases seems to enhance the notion of replication. Additionally, the external validity of the initial
investigation can be inspected and thereafter either verifies or falsifies the theory (Yin, 1994). A multiple
case approach may be extended to include a comparative study between organizations, whereby similar
research procedures are applied.
Nonetheless, it should be noted that, to select the cases for a comparative study, the characteristics of the
study issues in each organization, regardless of industry, need to be at least comparable in the sense of
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research contributions. For instance, a comparative study in the communication strategies for the brand
change between Godrej group and other family run diversified business (Reliance Industries, Aditya Birla
Group) would be an interesting topic to challenge the current findings and, potentially, attribute the
similarities or differences of change practices.
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