REHANA SHAIKH -102

FAHIM THAMBE-105
SANDEEP MISHRA-91
TWINKLE DEEWANI-71
DEEPAK YADAV-114
 INTRODUCTION
Change management is a common procedure
that is followed and used in any business
environment in any vertical.
It is a way to manage the changes that are

requested in the project modules or any process.

The impact of the change in each of the

department using it should be studied carefully

before implementing the change requested.
Change management is essential to business

success in this rapidly changing economic

environment.
 NEED
When there is a process in an organization it is not an easy
task to make changes to this process immediately.
Sometimes a single organization may have varied business
entities and changes in an entity may be reflected in another
entity.
In such organizations changes are not so easy.
There are different types of organizations which have many
branches across the world with varied cultures.
Implementing a change in such organizations is a task by
itself.
The change process can be thought of a process which stops
the current process, makes the necessary changes to the
current process and the run the new process.
It is easy said than implemented.
ROLE OF CHANGE MANAGEMENT
Change management plays an important role
in any organization since the task of managing
change is not an easy one.
When we say managing change we mean to
say that making changes in a planned and
systemic fashion.
With reference to the IT projects we can say
the change in the versions of a project and
managing these versions properly. Changes in
the organization or a project can be initiated
from within the organization or externally.
 For example a product that is popular among the
customers may undergo a change in design based
on the triggering factor like a competitive product
from some other manufacturer.
This is an example of external factor that triggers a

change within the organization.

How the organization responds to these changes is

what that is more concerned.

Managing these changes come under change

management.
Reactive and proactive responses to these changes

are possible from an organization.

Background Note

ICICI was established by the Government of India in 1955 as a

public limited company to promote industrial development in
India.
The major institutional shareholders were the Unit Trust of India
(UTI), the Life Insurance Corporation of India (LIC) and the
General Insurance Corporation of India (GIC) and its subsidiaries.
The equity of the corporation was supplemented by borrowings
from the Government of India, the World Bank, the Development
Loan Fund (now merged with the Agency for International
Development), Kreditanstalt fur Wiederaufbau (an agency of the
Government of Germany), the UK government and the Industrial
Development
Bank of India (IDBI).
Basic Objectives of ICICI

The basic objectives of the ICICI were to

assist in creation, expansion and
modernization of enterprises
encourage and promote the participation
of private capital, both internal and external
take up the ownership of industrial
investment; and
expand the investment markets.
The Change Leader

In May 1996, K.V. Kamath (Kamath) replaced Narayan

Vaghul (Vaghul), CEO of India's leading financial
services company Industrial Credit and Investment
Corporation of India (ICICI). Immediately after taking
charge, Kamath introduced massive changes in the
organizational structure and the emphasis of the
organization changed - from a development bank
mode to that of a market-driven financial
conglomerate.
Kamath's moves were prompted by his decision to

create new divisions to tap new markets and to

introduce flexibility in the organization to increase its
ability to respond to market changes.
Risen Problems due to a thought of change

Necessitated because of the organization's

new-found aim of becoming a financial
powerhouse the large-scale changes caused
enormous tension within the organization.
The systems within the company soon were

in a state of stress.
Employees were finding the changes

unacceptable as learning new skills and

adapting to the process orientation was
proving difficult.
 The changes also brought in a lot of confusion among
the employees with media reports frequently carrying
quotes from disgruntled ICICI employees.
According to analysts a large section of employees

began feeling alienated.

The discontentment among employees further

increased when Kamath formed specialist groups within

ICICI like the 'structured projects' and 'infrastructure'
group.
Doubts were soon raised regarding whether Kamath

had gone 'too fast too soon' and more importantly

whether he would be able to steer the employees and
the organization through the changes he had initiated.
 Change Challenges Part I

ICICI was a part of the club of developmental

finance institutions (DFIs ICICI, IDBI and IFCI)
.
However, the deregulation beginning in the

early 1990s, allowed Indian corporates' to

raise long term funds abroad, putting an end
to the DFI monopoly.
The government also stopped giving DFIs

subsidized funds. Eventually in 1997, the

practice of consortium lending by DFIs was
phased out.
 It was amidst this newfound independent status
that Kamath, who had been away from ICICI for
eight years working abroad, returned to the helm.
At this point of time, ICICI had limited expertise,

with its key activity being the disbursement of

eight year loans to big clients like Reliance
Industries and Telco through its nine zonal offices.
In effect, the company had one basic product,

and a customer orientation, which was largely

regional in nature.
 Kamath, having seen the changes occurring in the
financial sector abroad, wanted ICICI to become a one
stop shop for financial services.
He realized that in the deregulated environment ICICI
was neither a low cost player nor was it a differentiator
in terms of customer service.
The Indian commercial banks' cost of funds was much
lower, and the foreign banks were much more savvy
when it came to understanding customer needs and
developing solutions.
Kamath identified the main problem as the company's
ignorance regarding the nuances of lending practices in
newly opened sectors like infrastructure
 ACTIONS
The change program was initiated within the
organization the first move being the creation of
the 'infrastructure group (IIG) ' ,'oil & gas group
(O&G) , 'planning and treasury department (PTD)'
and the 'structured products group (SPG) as the
lending practices were quite different for all of
these.
Kamath picked up people from various

departments who he was told were good for these

groups.
The approach towards creating these new skill sets

however led to one unintended consequence.

 RESULTS
As these new groups took on the key tasks a majority of the
work along with a lot of good talent shifted to the corporate
center.
While the zonal offices continued to do the same work -

disbursing loans to corporates in the same region - their

importance within the organization seemed to have diminished.
An ex-employee remarked

"The way to get noticed inside ICICI after 1996 has been
to attach yourself to people who were heading these
(IIGPTDSPGO&G) departments. These groups were seen as the
thrust areas and if you worked in the zones it was difficult to be
noticed.
However this was just the beginning of change-resistance at

ICICI.
 Change Challenges Part II

Another change management problem

surfaced as a result of ICICI's decision to
focus its operations much more sharply
around its customers.
Client had three different requirements from

ICICI he had to approach the relevant

departments separately.
 Action Plan
Three new departments:
Major client group (MCG)
Growth client group (GCG)
Personal finance group
 Results
People within the organization found it
unacceptable.
The MCG executive ended up doing more

business than the GCG executive

 A middle level manager at ICICI
commented
"The bosses may call it handling
growth clients but the GCG manager is
actually chasing non performing assets
(NPA) and Board of Industrial and Financial
Restructuring (BIFR)cases."
 The manner, which ICICI recognized an
individual's efforts , the feedback process
was also questioned.
A manager remarked,
"Last year the bonuses varied
from Rs 30,000 to Rs 250,000 depending on
the performance. In many cases the
appraisal scores were same but the bonus
amount was not. And we were not told
why."
 Change Challenges Part III

Product development groups was another

problem area.
Unlike foreign banks there were no

demarcations between these internal skill

groups and client service person.
With no such systems in place at ICICI this

distorted the compensation packages

between the competing divisions.
 ACTION
One of the first initiatives was regarding
imparting new skills to existing employees.
Training programmes and seminars were

conducted for around 257 officers by

external agencies, covering different areas.
In addition, in-house training programmes

were conducted in Pune and Mumbai.

 During 1995-96, around 35 officers were
nominated for overseas training
programmes organized by universities in
the US and Europe.
ICICI also introduced a two-year Graduates'

Management Training Programme (GMTP)

for officers in the Junior Management
grades.
 CONCLUSION
Manage change effectively .
What Managing change requires?

Managers must show leadership.

The possibility of change tends to provoke

resistance among the employees that the

change will affect.
This mistrust can be best overcome by a

deliberate policy of keeping people informed

about what is being proposed and getting them
involved as far as possible in the discussions
and decision making.