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Organizational change and development in India : A case of strategic organizational change and transformation

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Organizational change and development in India : A case of strategic organizational change and transformation
  Organizational changeand development in India A case of strategic organizational changeand transformation  Jyotsna Bhatnagar  Management Development Institute, Gurgaon, India Pawan Budhwar  Aston Business School, Aston University, Birmingham, UK, and  Pallavi Srivastava and Debi S. Saini  Management Development Institute, Gurgaon, India Abstract Purpose  – The purpose of this paper is to examine developments in the field of organizationalchange (OC) with reference to the context of India. It highlights the need to analyze this topic in thepresent Indian economic environment and discusses the main developments reported in the Indianliterature on the same. Design/methodology/approach  – Empirical evidence based on a qualitative analysis of a casestudy undertaken at a public-private partnership transformation at North Delhi Power Limited(NDPL) in India is presented. Findings  – The findings focus on trust building and belongingness for the employees, establishing ahigh-performance orientation, quality improvements, and the resultant transformations at NDPL.The analysis indicates a number of ways by which NDPL sought to improve its efficiency in order tobetter adapt to the rapidly changing Indian business environment. Practical implications  – Based on the findings, the paper identifies key messages for policymakers and change agents regarding how to transform companies in the rapidly changing businesscontexts of emerging markets such as India. Originality/value  – The paper offers an in-depth analysis of OC practices in a large organization inIndia. Keywords  Organizational change, India, Performance management, Transformational leadership Paper type  Research paper Introduction Over the past 20 years or so, there has been much debate in Western literatureregarding the most appropriate way to manage organizational change (OC) (Beer andNohria,2000;Dawson,2003;Kanter etal. ,1992;Kotter,1996;Pettigrew,1990;Stickland,1998; Stacey, 2003; Wilson, 1992). Over the years, the scope of OC has increased toencompass large-scale interventions, including strategic change (Chapman, 2002).ThisemphasisinOCliteratureonstrategymayaccount forrecentdevelopmentswhichindicate a converging trend in the activities and processes of human resourcemanagement (HRM), human resource development (HRD), and OC and the need toensure coordination and partnership amongst these functions in order to achievecompetitive advantage in the present dynamic business environment (Ramos and The current issue and full text archive of this journal is available at OC anddevelopmentin India 485  Journal of Organizational ChangeManagementVol. 23 No. 5, 2010pp. 485-499 q Emerald Group Publishing Limited0953-4814DOI 10.1108/09534811011071243  Rees, 2008; Ruona and Gibson, 2004; Sparrow and Budhwar, 1997). Considering thatHRMisarelativelynewdiscipline(especiallyinemergingmarkets)andtheexistenceof a strong variation regarding the practice of HRD and OC in different parts of the world,more evidence is needed to confirm observations and claims that this convergence istaking place. Further, keeping in mind the contextual and cultural differences acrossnations (Hofstede, 2001), it is imperative to conduct both country-specific literatureanalysis and in-depth research investigation to obtain a clear picture of OCinterventions and to clarify linkages between OC, HRM, and HRD (Metcalfe and Rees,2005). This study is specifically focused upon OC in the context of India.The main aims of this study are twofold: first to highlight key developments in thefield of OC in the Indian context; and second to provide empirical evidence from arobust case research analysis to explore how OC interventions are implemented in anIndian setting in order to bring about both individual and organizational efficiency andeffectiveness. The study includes a case study of a public-private partnership OCtransformation at North Delhi Power Limited (NDPL) in India. The next sectionconsiders the changing business environment in India and discusses why documentedanalyses ofOCinterventions in the Indian contextare important totheory buildingandpractice. Economic liberalization and OC in India The relatively strong economic performance of the Indian economy in recent years(IMF, 2007) is an outcome of the economic reforms initiated in 1991. India was forced toliberalize its economy as in 1990 it reached its worst position and witnessed adouble-digit rate of inflation, decelerated industrial production, fiscal indiscipline, avery high ratio of borrowing to the gross national product (both internal and external)and a dismally low level of foreign exchange reserves. The World Bank and the IMFagreed to bail out India at that time on the condition that it changed from a regulatedregime to a “free market economy”. In response, the government announced a series of economic policies, followed by a new industrial policy and fiscal and trade policies.A number of reforms were made in the public sector, trade and exchange policy, thebanking sector, and foreign investment was liberalized (Budhwar, 2001).However, the liberalization of the Indian economy has resulted in sudden andincreased levels of competition for Indian firms from international firms. At the sametime,ithasalsocreatedopportunitiesforresourcemobilizationfromnewsources.Inthepresentenvironment,HRMissueshavebecomemoreimportant,withthefirms’adoptionof strategies of expansion, diversification, turnaround, and internationalization. Thehuman resources (HR) function is under severe pressure to bring about large-scalestructural changes in order to cope with these challenges. In such conditions, the corefocusoftheIndianHRfunctionhasbeenonthedevelopmentoftheirhumanresourcesinorder to implement major OCs (Budhwar and Sparrow, 1997; Sparrow and Budhwar,1997;SainiandBudhwar,2004;BudhwarandBhatnagar,2009).Inahaste,someIndiancompanies tried to adopt the readily available Western interventions to facilitate OC(Kalra, 2004), but with limited success (Gupta, 1991). In this regard, scholars (SparrowandBudhwar, 1997)have raisedaseriousneed forrelevant OCinterventionswhichcanenable Indian firms to attain quality improvements, cost efficiency, employeedevelopment, motivation, and successful change programs (Amba-Rao  et al. , 2000;Budhwar, 2003).  JOCM23,5 486  Researchers highlight that the role of economy, the position of the state, the ways of doing business, and the national culture have an impact on the effectiveness of OCinterventions in different settings (Child, 1981; Golembiewski, 2000). For example,Golembiewski (1993) finds the value-laden nature of traditional OC interventions to bea serious constraint faced by OC practitioners in Asia (Dietrichsen, 2006). Interventionsin organizations by OC practitioners and managers are perceived to be culturallybiased, hence, to better understand the diversity of OC practices in India it is necessaryto appreciate the broader socio-economic and cultural environments that shape them,whilealsorecognizingthegrowingdiversityofsub-culturalinfluences(Amba-Rao etal. ,2000). As Ahuja and Khamba (2008) point out, the implementation of OC interventionsin the context of India is often frustrated by the existence of organizational, cultural,and behavioral barriers rather than by the substance of the change intervention itself.India has a high-context culture where work relationships are personalized ratherthan contractual (Sinha, 2000) and many influences such as authoritarian practiceswithin thefamily,theeducationalsystem,society’shierarchicalstructure,andreligiousinstitutions act together to create a strong sense of dependence (Dayal, 1999). Gupta(1991) states that in India power in relationships is maintained through renunciation,givingaway,self-sacrifice,andself-denial.WhileitisdifficulttocharacterizeacommonIndian cultural pattern because of its heterogeneous demographics, some genericattributes are identified (Sinha, 1990). Predominant among these are submissiveness,fatalism, power conciousness, possessiveness towards subordinates, fear of independent decision-making, and resistance to change (Sparrow and Budhwar,1997).Owingtosuchuniquesocio-culturalmilieuofIndia(whichisfurthercomplicatedby its legal, political, and economic set up), it is important to develop specific OD/HRDinterventions to facilitate OC in the present Indian business environment for, as notedby Ranganathan and Kuruvilla (2008), there is currently an apparent inability of firmsto develop integrated organizational cultures that permit a focus on long-termorganizational performance.Research literature on OC in India suggests that terms such as OC, changemanagement and organization development (OD) have been used interchangeably.Similarly, corporate transformation (Singh and Bhandarker, 1990, 2002; Bhandarker,2003) and organizational transformation (Apte, 1998) have also been used as asynonym for change management. A number of scholars have prescribed differentmechanisms, which can facilitate OC in Indian organizations (Blythe  et al. , 1997; Danieland Benjamin, 1992; Prasad and Sayeed, 2006; Sharma, 2007; Singh and Bhandarker,1990; Srivastava, 2003). For example, Ramnarayan (2003) analyzed OC in severalIndian Government organizations and found that a combination of both psychologicaland leadership-related impediments affect the change efforts.Undoubtedly,successfulchangemanagementrequireseffectiveleadershipatthetop(Page and Pearson, 2004; Irani, 2004) and sensitization of the top-level executives(Singh and Bhandarker, 2002; Bandyopadhyay, 1998). Indeed, institutionalizing andinternalizing such efforts is seen as essential when attempting to bring about change(GargandSingh,2005).Institutionalizationmeansmakingthechangeapermanentpartof an organization; internalization of change means stabilization of change(Pareek, 1987). Pareek’s study suggests six main roles need to be performed forsuccessfulOCanddifferentfunctionsneedtobeperformedbyeachrole.Suchproposalsseem to be over prescriptive in nature as they lack clear empirical evidence to highlight OC anddevelopmentin India 487  the applicability of the proposed roles (for a thorough review, see Fisher  et al. , 1997;Gupta, 1991; Nilakant and Ramnarayan, 2006; Ramnarayan and Bhatnagar, 1993;Sharma, 2007; Suyampirakasam, 2006).The evidence surrounding Indian firms’ ability to pursue successful OCprograms ispatchy (Saini and Bhatnagar, 2005; Bhatnagar and Saini, 2007). Although many Indianorganizations have been using OC interventions (either via their managers as internalchange agents or facilitated by external consultants) to bring about changes, very fewcases have been well documented in the existing literature (Bandyopadhyay, 1998).Also, there is a general tendency to document only the successful OD experiencesthough some failures have been highlighted (Gupta, 1991). A well-thought-out strategyof OC intervention as evolving from the Indian OC literature is then sparse (notableexceptions being Rao, 1998; Nilakant and Ramnarayan, 1998; Rao and Vijayalakshmi,2000). For example, Kazmi (2008) has stated that existing strategic change literature isinadequate in respect of procedural and project implementation in the Indian context.Similarly, Bezboruah (2008) has called for the development of action strategies tomanage the resistance to change that is likely to represent a significant part of anychange process in the context of India.In summary, an analysis of the relevant literature highlights that OD interventionshave been practiced in a diversity of Indian organizations over the past few decades.Second,anumberofdifferentOCinterventionshavebeenadoptedintheIndiancontextand there is a scarcity of research relating to transformational OC. Third, there is ascarcityofOCresearchinthenewIndianeconomicenvironment,particularlyasregardspublic-private partnerships (which are a strong emerging phenomenon in the neweconomic environment) and the key issue of how to manage OC in these partnerships.The present study attempts to explore these themes further by means of a casestudy analysis. Reliable information about OC which is drawn from the present Indiancontext will not only contribute to the existing academic literature but will also beuseful for organizations which intend to pursue change programs in order to surviveand excel in the present Indian context. Specifically, the main research questionsrelating to the case study analysis are as follows:  RQ1.  How did the leaders of the organization foster change with a concern forpeople and for institutionalizing strategy, systems, and structure in apublic-private partnership context?  RQ2.  How was the embedded old culture of poor performance replaced by the newexpectation of high-performance orientation?  RQ3.  How did the organization ensure that its HR function was delivering internalcustomer satisfaction, and also helping to foster a forward thinking mind-setof people in the organization?The methodology adopted for the case study is discussed in the next section. Methods To examineourresearchaims and questions, 30unstructured in-depthinterviews wereconducted with different stakeholders of the case company, namely: CEO, Head of HR,HR managers, heads of main functional areas, line managers, and customersof the organization (see Table I for sample characteristics). At least, two authors were  JOCM23,5 488  present in all the interviews and made separate notes. The interviews were also taperecorded and later transcribed verbatim. Each of the two authors independentlycoded the interviews, using a coding scheme that emerged over a period of time andplaced portions of interviews into these codes/themes. Most of the time, these broadcodes/themes mirrored concepts studied in literature, for example, organizationalculture (before NDPL – the case company was formed, and after) from both managers’andemployees’perspectives;thekeyHRandstrategicOCinterventionsusedforchange;key strategic HR themes (for example, flexibility, empowerment, leadership building, job enrichment, work culture interventions, human resource information systems(HRISs), and team building); and the identification of concrete cases and events whichreflect claims of the management in support of these HR/OD interventions.The qualitative data analysis also consisted of decision stories, development of systems, profiles, documentation of historical data, archival data, and snapshots of oldand new documents. To analyze each interview, we used a two-step coding system, inwhich codes are derived inductively from the interviews and agreed upon by authors.Todothis,theauthorscreatedtheirowncasetranscripts.Inthesecondstep,theauthorscompared their independent transcripts in joint coding meetings, wherein independent S. no. Rank Gender1. CEO Male2. CFO Male3. GM (operations) Male4. GM (technical services and project management) Male5. GM (commercial) Male6. GM (HR) Male7. GM (BPR) Male8. DGM (admin) Male9. Management trainee HR Female10. Management trainee- HR Female11. Management trainee- HR Male12. CEO-cell Male13. Managers (admin) Female14. (senior manager: ex-TATA power Mumbai) Male15. HR manager Male16. KM officer Male17. Internal change agent 1 Male18. Internal change agent 2 Male19. AGM – systems, North-West area Male20. BU manager Male21. HOD – IT manager Male22. Senior manager (IT) Male23. Corporate communications Female24. AGM – key consumer cell Male25 Manager (admin) Male26. Manager (industrial engineering) Male27. Manager (personnel) Male28. AGM-finance Male29. Deputy company secretary Male30. Joint interaction forum (JIF) member Male Table I. Sample characteristics OC anddevelopmentin India 489
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