ORGANIZATIONAL BEHAVIOUR – II

PROJECT REPORT

CHANGE IN ORGANISATIONAL CULTURE

IN INDIA

Submitted To, Submitted by

Dr. Shabu B Raj Jabin Shihab

CET SCHOOL OF MANAGEMENT

COLLEGE OF ENGINEERING TRIVANDRUM
 INTRODUCTION
An organisation’s culture, which is its soul, comprises the collective
values of the individuals that make up the organisation. Each individual
has his/her beliefs that translate into personal values which, expressed
collectively, shape an organisation’s culture (Haines, 2000). Culture also
operates as a ‘social control system’ (O’Reilly, 1989). It communicates
how things ought to be and defines the “unwritten rules of the game”
(Scott-Morgan, 1994). Culture can be felt in the implicit rules and
expectations of behaviour wherein employees know what is expected of
them, even in the absence of written rules (Saxena and Shah, 2008).
A clear understanding of organisational culture is important for all
organisational managers and leaders because it influences the way their
organisations react to the changing demands of the business environment.
At any given time, the culture of an organisation is strongly influenced by
the past successes and past learnings about how to adapt and survive. As
the business environment changes, leaders must constantly anticipate the
necessary changes and actively monitor the relationship between the
demands of the environment and the capabilities of the organisation.
However, most successful changes also require changes in mindset, in
values and in behaviours of organisation members. Without creating these
changes, changes in basic capabilities of the organisation are impossible.
Many organisations are discovering that successful change requires
careful attention to the ‘soft’ side of organisations – the values and beliefs
that are the ‘heart of the company’, the policies and practices that put
those values into action, and the importance of teaching organisational
members an understanding of how they create value for their customers
Organisational culture has been perceived to have a great impact on a
range of organisationally and individually desired outcomes. When
organisation members identify with the culture, the work environment
tends to be more enjoyable, boosting morale. This leads to increased
levels of team work, sharing of information and openness to new ideas
Organisational culture also affects the way in which people consciously
and subconsciously think, make decisions and ultimately the way in
which they perceive, feel and act (Hansen and Wernerfelt, 1989; Schein,
1990). Koh and Boo (2001) found that three measures of organisational
culture (top management support, ethical behaviour and career success)
 Organizational Culture
The current interest in organizational culture stems from the 1970s work
on 'organizational climate' which aimed to identify the organizational
'qualities' in the form of attitudes and beliefs that employees hold about
their organization (Wiley & Brooks, 2000). The initial research on culture
was generally focused on developing dimensions of culture or on
empirically describing the culture of various organizational settings with
respect to some dimensions. Culture involves beliefs and behavior,
existing at various levels, and manifests itself in a wide range of
processes and practices of organizational life (Hofstede et al., 1990).
Organizational culture refers to a set of shared values, beliefs,
assumptions, and practices that shape and guide members’ attitudes and
behavior in the organization (Daft, 1998; Davis, 1984; Kotter and
Heskett, 1992; Trice & Beyer, 1993; O’Reilly and Chatman, 1996).
Schein (1992) defined organization culture as a pattern of shared basic
assumptions that the group learned as it solved its problems of external
adaptation and internal integration that had worked well enough to be
considered valid and, therefore, to be taught to new members as the
correct way to perceive, think, and feel in relation to these problems.
Culture is a real part of an organization which individuals can see and
feel when they enter an organization, that is, culture tends to be very
"visible and feel-able," (Schein, 2004). Barney (1996) further added that
the culture of an organization elucidates the way in which an organization
conducts its business and could be a source of sustained competitive
advantage if it is valuable and rare. In the same vein, Peters and
Waterman (1981) emphasized that a strong and a well-developed culture
could be a distinguishing characteristic of a highly successful
organization. The culture facilitates in setting the attitudinal and
behavioral norms for the whole organization which provides a sense of
direction for the employees of the organization.
McShane & Glinow (2002) described organization culture as a ‘social
glue’ that bonds people together to build cohesive relationships and
involves them emotionally that helps in building readiness of the people
to exert extraordinary effort to achieve organizational goals. However,
Kotter and Heskett (1992) opined that strong cultures which are not
compatible with practices that attempt to satisfy the needs of the market
can be a liability. Martins and Martins (2003) further added that strong
organization cultures could thus, become a liability for reasons like:
barrier to change, barrier to diversity, barrier to acquisitions and mergers.
Therefore, organizations strive to develop strong cultures in their effort to
be competitive in today’s dynamic environment; however, the same
strong culture can be a liability when the culture becomes a barrier to
change. The leaders of the organization have a very significant role to
play to achieve a balance between having a strong culture and at the same
time being adaptable and agile.
Process of Organizational Culture Change
In any organizational culture change effort, the leaders of the
organization play a very crucial role. The leaders unfreeze the present
situation by highlighting the threatening issues and thereby provide a
compelling reason for the change (Miller, 1998; Schein, 2004). It is
essential for the leaders to articulate the necessary changes in an
organization’s culture by communicating as well as being a role model
for the new behaviors. These new behaviors then need to be rewarded by
the leaders and adherence to old behaviors needs to be penalized. An
organization that wants to involve its employees to the fullest may
highlight its ‘participative’ style of leadership. Desired role models of
leadership begin at the top and are encouraged at each successive level
below. The behavior of top-level leaders becomes a beginning of change
from old culture to the new culture (Avolio & Bass, 1994).
As the external environment changes, it forces the organization to
question its deeply rooted assumptions and values which become a barrier
to the change process. Consequently, it is imperative upon the leaders in
the organization to view the development of assumptions and values as an
evolutionary process — a process that periodically challenges the
organization to question its assumptions, and to change them if the
conditions warrant such change (Avolio & Bass, 1994). Culture change
process might be initiated by the change leaders but for it to sustain, it
needs to be internalized by individual employees.
CASE OF CHANGES IN ORGANISATION CULTURE
AT INFOSYS

CASE OVERVIEW
Infosys Technologies Ltd., a world leader in consulting and Information
Technology (IT) services, partners with Global 2000 companies to
provide business-consulting, systems integration, application
development, maintenance, re-engineering and product engineering
services. Infosys enables its clients to fully exploit technology for
business transformation. Clients leverage Infosys’ Global Delivery Model
to achieve higher quality, improved time-to-market and cost-effective
solutions. Infosys has partnered with several “Fortune 500” and emerging
companies in building their next generation information infrastructure for
competitive advantage.
Now a publicly held company, Infosys was founded in July 1981 by
seven visionary software professionals with a paid up capital of Rs.
10,000 and a deeply held value system (Core-values). Today, it is one of
the most admired companies, known for its execution excellence,
innovative, pioneering business practices and its social consciousness.
Infosys is a provider of offshore IT services and is based in Bangalore,
India. It competed against multinational firms including IBM and
Accenture. The company has a state of art training center and one of the
best HR professionals in the world managing its human capital. It’s
known for cutting edge human resource practices since the early 1990s
and was considered a model for success in developing countries. In 2002
Infosys was considered by Business Today as best employer and
strongest fi nancial performer in India. But in 2003 Infosys found that
there was signifi cant discontent in its workforce. The internal employee
satisfaction scores showed a 31% decrease in employee satisfaction, a
28% decrease in advocacy, a 28% decrease in loyalty, and a 28%
decrease in confi dence in senior leadership within the fi rm. All these
caught Infosys to fall from the best employer rankings
Change agent:
Hema Ravichandar, Infosys head of the human resources, was called
upon to restore the company to top 10 status as an employer. First she
analyzed the reasons for this drop. Except for objective and unchangeable
reasons, she found the most serious problem is the increasing disconnect
between Infoscions and their middle and upper managers. Employees felt
that managers were out of touch.
Actions
Immediately Hema Ravichandar and her team began working on a
several initiatives, including improving communication, fostering
empowerment and trust, strengthening internal communication, and
compensation reform. The effort began by creating a policy council,
chaired by HR, to deliberate all future proposed policies from the
employees’ perspective. Its responsibilities included taking feedback
from employees and vetting the policy defi nition and communication
that went out to employees. Since many managers within Infosys had
very little management experience, Hema created training programs
including training in cross-cultural management, dealing with sexual
harassment, creating safe work environments, and listening and
responding to employee concerns. HR staff members were also assigned
to business groups effectively decentralizing the role of HR and making it
part of line operations. These staff members reported directly to line
managers, but reported indirectly to the HR group as well, providing HR
support directly to those managing large numbers of people
Employees had also reported feeling a lack of empowerment within
Infosys. So a team was formed that to research issues and make
recommendations on how to improve the compensation system. They
discovered that Infosys’ promotion system was too hierarchical and
decided that flexibility needed to be added so that employees could
choose the most appropriate career paths. Finally, managers were given
more authority to make decisions regarding their subordinates and their
assignment to overseas projects, which had been seen as a major perk
among employees.
Results
By 2004 these initiatives had resulted in significant changes within
Infosys, with the company returning to Business Today’s Best Employer
list at No. 2. Not content to rest this, Hema continued to “future proof”
the organisation, preparing it for continued growth by anticipating new
demands as the company continued to grow. In 2005 Infosys was once
again number one on the Best Employer list.