MCOE Final

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“TATA MOTORS (TATA NANO) : AN ORGANIZATION PROPENSITY TO CHANGE”

Submitted towards the partial fulfillment of the

Requirements for the certificate of the

Post-Graduate Diploma in Business Management

2009-2011

Report on

Management of Change

SUBMITTED TO: SUBMITTED BY:

Prof. Anita Singh Anamika Lohumi : 09034

Faculty of IMS Ghaziabad Animita Chakrabarty : 09037

Astha Uttam : 09050

Pratima Gupta : 09148

Ritu Chaudhary : 09175

Swati Garg : 09222

INSTITUTE OF MANAGEMENT STUDIES

LAL QUAN, GHAZIABAD – 201 009

DATE: 26-07-2010

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DECLARATION

We hereby declare that content presented in the project entitled “ TATA MOTORS (TATA NANO)

: AN ORGANIZATION PROPENSITY TO CHANGE ” submitted by the group in the partial

fulfillment of the requirement for the award of the degree of POST GRADUATE DIPLOMA INMANGEMENT from IMS, GHAZIABD is an authentic record of our own work and effort, carried

out under the guidance of our project guide Prof. Anita Singh. The matter embodied in the project

has not been copied by us from any resources. It has not been published in any magazine, book or

newspaper yet. All other sources of information have been duly acknowledged.

Anamika Lohumi : 09034

Animita Chakrabarty : 09037Astha Uttam : 09050

Pratima Gupta : 09148

Ritu Chaudhary : 09175

Swati Garg : 09222

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ACKNOWLEDGEMENT

No task whatever big or small can be completed without proper guidance and

encouragement. It gives us a great pleasure to our deep sense of gratitude and reverence to

every person who created a congenial atmosphere for successful completion of this project.

We would like to express our gratitude and profound thanks to Prof. Anita Singh,

Faculty, Institute of Management Studies, Ghaziabad for her valuable sustained, guidance,

invaluable suggestions and constant encouragement without which it would not have been

possible for us to complete this project.

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INTRODUCTION

Change is the only constant thing in life. The automotive industry, like every other sphere of

business, is going through a period of significant transition. A number of changes are being worked

out with respect to customer expectations, regulations governing safety and environmental protection, and continual competitiveness in terms of cost. These changes cannot be brought to pass

unless the company systematically drives its processes ahead through a high level of product and

process innovation.

"Tata Motors has a long history of investment in R&D," states Dr V. Sumantran, executive director,

passenger car business unit and Engineering Research Centre (ERC), Tata Motors. It is a statement

that has been collaborated by a very large number of business successes.

Most of these innovations have been, over the years, incorporated into automobiles, ensuring driver

and passenger safety and convenience while driving. "The facilities in our ERC have been

repeatedly identified as benchmarks for the Indian industry," Dr Sumantran asserts.

The design of the Tata Indica, India’s first indigenous car, is an accomplishment that has established

the country’s position in an elite group of countries that have proved their capability in designing,

developing and manufacturing a world-class car. Tata Motors has made significant new investments

in new facilities to support its product-development needs. It has hired new talent and instituted

new methods such as computer-aided design, computer-aided manufacture and computer-aided

engineering to help it in its research endeavours.

Some of the other technologies that are part of Tata Motors’ arsenal are those that offer improved

electronic controls for engine systems, aimed at improving emission standards, and other vehicle

drive-train and chassis systems, besides fuel efficiency.

The work on safety engineering also occupies a large part of the R&D focus. The company is

currently working on equipping the vehicles of the future with technologies for improved

communication, navigation and entertainment. The use of all these technologies will go a long way

towards ensuring the quality of all the vehicles that roll out of the company’s plants.

In the absence of a strong and active R&D department, an automobile company aspiring to be in the

league of globally competitive companies will find itself lagging far behind. Besides, the growing

number of regulations in the field of auto safety demands that a company invest highly in research.

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Tata Motors has achieved much progress in terms of accessing advanced systems and technologies

and using them to equip their products with various conveniences and features. The resultant

advances have enabled the company to meet the highly stringent performance specifications that are

expected from any world-class manufacturer of cars.

The road ahead will require Tata Motors to take some crucial decisions. The company will have to

learn a number of lessons from the environment, the competition, the expectations of consumers,

current and upcoming regulations, and the evolution of technology. These lessons will then have to

be ploughed into research that will help design and improve the vehicle of the future.

Dr Sumantran believes a roadmap will go a long way towards making the process of research easier.

"A roadmap that charts a systematic cadence of development and projects allows us to pace the

development of needed skills and technologies. Admittedly, some of these projects are intended toserve long-term objectives and, through their stages of development, may lead to results that prove

that technology to be unfeasible or uneconomical. Modern management of R&D uses measures

such as harvest ratio to evaluate the efficacy of their R&D investment and with this we are able to

prioritise work in the needed areas and encourage innovation."

Whatever the outcome, the company has shown its willingness to take risks and to drive itself

aggressively ahead. There is no doubt that Tata Motors will be at the forefront of the changes that

will be evident in the automobile industry of the future.

TATA MOTORS

Tata Motors, division of one of the largest business houses in India has grown significantly over the

last 64 years since its establishment in 1945. Tata Motors Ltd is India’s largest automobile company

with revenue of about 14 billion dollars. It is the first company from India’s engineering sector to

be listed in the New York stock exchange. Tata motors presence indeed cuts across the length and

breadth of India. Over 4 million Tata vehicles ply on the Indian roads since the first rolled out in

1954. The company is going strong with its 23000 employees guided by the vision to be “the best in

the manner in which we operate, best in the products we deliver and best in our value systems and

ethics.” The Tatas are known and are always sought to be a value driven organization. The 5 core

Tata values being Integrity, understanding, excellence, unity and responsibility.

The TELCO saga started off with Tatas acquiring an Eastern railway workshop to build boilers and

steam locomotives for railways. Then they ventured into commercial vehicles in 1954 having

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entered into a partnership with Daimler-Benz in Germany. In global context it caters to three main

market segments: Passenger cars, utility vehicles and commercial vehicles.

They followed the strategy of acquisition and joint ventures in its mid-stage and launched new

products at a rapid pace in different market segments. Through subsidiaries and associate

companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them

is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in

2008. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second

largest truck maker.

Tata Motors is also expanding its international footprint, established through exports since 1961.

The company's commercial and passenger vehicles are already being marketed in several countriesin Europe, Africa, the Middle East, South East Asia, South Asia and South America. It has

franchisee/joint venture assembly operations in Kenya, Bangladesh, Ukraine, Russia and Senegal.

A significant breakthrough for the company was the development and commercialization of the

truly Indian cars – Tata Indica and Tata Indigo. Within 2 years of the launch, Indica became the

India’s largest selling car in its segment. Ratan Tata had always been keen on entering the lower-

end of the market as he believed the big market lay there. He initiated steps to develop the Indica.

Billed as India's first indigenous car and kept as a secret for a long period of time, the Indica promised much.

Unfortunately for the Tatas, the development of the Indica coincided with one of the worst phases in

the company’s history. During the period 1995-1998, the commercial vehicle business had been

doing well and Tata Motors grew at 30-40 per cent. Then came the downturn in the economy and

the market for commercial vehicles suddenly shrank by 40%. The lost sales compounded by the

heavy investment for its entry into passenger car business, the cost of complying with new emission

standards and increasing threat from overseas competitors caused Tata motors to shock the market

by 5 billion rupees loss for the year 2001. Realizing the urgent need to cut costs, the Tatas embarked

on a major restructuring exercise

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OBJECTIVES

1. Finding the necessities behind the introduction of Tata Nano

2. Study the obligations that aroused during the implementation of the concept of launching the

people's car.3. Determining the change agent.

4. Comparison of a change brought in by the Tata's with change management in order (Lewin

Model).

5. To determine the type of change.

Change Management in Tata Motors

Tata Motors marks the biggest turn arounds in the history of Indian automobile manufacturing

industry which happened in 2001. This success story of Tata Motors can be entirely attributed to the

timely change adopted by the Tatas and the then M.D Ravi Kant who led the change.

Drastic action was required. Over the next two years, the company shaved around 8 billion rupees

from its cost base and nursed itself back to corporate health. Even while keeping a tight grip on

costs, Tata Motors moved to the offensive by refocusing its investments on less cyclical products,

including light commercial vehicles, buses, and spare parts; making a successful entry into

passenger cars; and responding to opportunities presented by favourable social and economic

trends. These included the new mobility of young Indians, the government’s substantial road-

building program, and generally buoyant GDP growth.

Today Tata Motors ranks as the world’s fifth-largest manufacturer of medium and heavy trucks—it

has a 61 percent domestic market share in this segment—and has taken the number-two position for

sales of passenger vehicles in the Indian market. It has also built a significant global presence, both

through sales efforts in overseas markets (such as the former Soviet republics, the Middle East,

South Africa, South Asia, and Turkey) and through acquisitions such as the takeover of Daewoo’s

commercial-vehicle business in South Korea and the purchase of a 21 percent stake in the Spanish

bus manufacturer Hispano Carrocera. In addition, Tata Motors has formed a joint venture with

Marcopolo, the Brazilian bus manufacturer. With an agreement in early 2006 to distribute Fiat cars

in the Indian market and a more recent memorandum of understanding with Fiat to establish a joint

manufacturing facility near the Indian city of Pune, Tata Motors has embarked on a wide-ranging

global partnership with the Italian group—an arrangement that both sides expect to flourish.

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Tata Motors was predominantly a manufacturer of commercial vehicles, and that is a very cyclical

business. The commercial-vehicle market in India shrank by more than 40 percent, with massive

consequences for both the top and, more particularly, the bottom lines of the company. The 5 billion

rupee loss in 2001 was the first time something on this scale had happened in the company’s

history, and it really shook everybody within the organization.

They tried to understand what had gone wrong and wanted to create a path for the future to ensure

that they never got into such a situation again. So in 2001 they decided on a recovery strategy that

had three distinct phases, each of which was intended to last for around two years—six years in all.

Phase one was intended to stem the bleeding. Costs had to be reduced in a big way, and that was

going to be a huge challenge for a company that was not only the market leader but had been used

to operating in a seller’s market and employing a cost-plus approach to pricing. Phase two was to beabout consolidating their position in India, and phase three was to involve going outside India and

expanding our operations internationally.

Phase 1:

The key objectives were to move to a system of market pricing and to reduce their break-even point,

both of which called for major reductions in costs—variable costs, fixed costs, and interest costs.

They used many approaches to cost reduction, including bench-marking our rivals. For example,they took apart vehicles to see what they could do to modify the products and to lower costs. They

went in for e-sourcing, and today they are the largest company doing e-sourcing in India and one of

the leading ones in the automobile industry worldwide. In two and a half years, they reduced the

break-even from nearly two-thirds of capacity utilization to around one-third, which meant that

even if the market shrank by close to 60 percent, they would still be in the black. The whole

organization really got together to ensure that the bleeding stopped.

One of the major drivers of success at Tata Motors Ltd. (TML) was its ability to fully exploit

information technology to drive business goals and reduce cost. The company was an early adopter

of CAD and CAM systems. The company also uses Siebel Systems to manage its vast customer

relationship network and SAP for all critical business services, such as logistics, supplier relations

management, customer relationship management, human resources (HR), and finance. A remote

training network was utilized to deliver audio-video feeds for training, thus saving costs on network

and bandwidth. In order to support growth and globalization, effectively manage its dealers, and

gain downstream visibility, Tata Motors launched a customer and dealer management (CRM-DMS)

program in 2003. It is this type of demand network, one that senses and shapes demand based on

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regional differences, which differentiates the leaders from the laggards. Throughout its

transformation effort, the company partnered with Tata Consultancy Services (TCS) for consulting

and IT services.

Phase 2:

The concentration in phase one was indeed on cost reduction, but while this was going on they

thought about taking action in areas that would have an impact during the other phases. For phase

two, the concentration was on improving product quality and upgrading product features so as to

make the products more competitive. They also started work on new products that would be

required by the market after three to five years and strengthened the position in the marketplace by

setting up a new sales-planning process, tightening credit norms, improving the liquidity and

profitability of the dealers, reorienting toward customer satisfaction, and extending the reach of thedistribution network. For phase three, the concentration was on starting work on international

markets by identifying key markets and segments and developing a comprehensive plan to improve

our competitive position so as to get a respectable market share. They also started looking at

opportunities for inorganic growth.

Phase 3:

In phase the concentration was on starting work on international markets by identifying key marketsand segments and developing a comprehensive plan to improve Tata Motor’s competitive position

so as to get a respectable market share. They also started looking at opportunities for inorganic

growth. International diversification was such a key part of the transformation strategy. It was all

part of first, reducing the impact of domestic cyclicity – cyclicity is present across the world but in

different phases in different places - and, second, seeking new geographies for growth in the face of

the limitations of the domestic market, especially in commercial vehicles, where we enjoy a very

high market share of over 60 percent. Tata Motors wanted to leverage the market-leading productsinternationally. By identifying about 12 countries as priority markets, rather than the 60 to 70

countries they tried to tap previously. They grew international sales to some 50,000 vehicles,

against 7,000 to 8,000 four years earlier.

To facilitate globalisation, Ratan Tata reorganised the company. The previously independent export

division was merged into the passenger car and commercial vehicle divisions. The independent

international division that looked after exports and overseas business was dismantled. In the early

2000s, Tata Motors made several important moves in its efforts to expand and consolidate its global

presence. In October 2003, Tata Motors forged a tie up with MG Rover of UK for supplying petrol-

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powered cars with the Rover badge and styling, labelled as the City Rover. A major step in Tata

Motors’ globalization efforts was a bid for Daewoo Commercial Vehicles Ltd (DCVL), South

Korea. Tata Motors had started exploring the South African market under a taxi recapitalisation

programme. The Tatas were also setting up an assembly unit in Thailand which had emerged as the

largest manufacturer of pickup trucks in the Asian region and the second-largest market in theworld. The Tatas tied up with Khodro of Iran for passenger cars, which promised a potential off take

of around 20,000 vehicles per year. The Tatas also had a presence in Ukraine, Malaysia and

Bangladesh.

CHANGES :

Generally, people with greater experience, especially in a successful company, are often resistant to

change because they have been successful doing things the way they have been used to, not

realizing that the context has changed.

The people were very dedicated, but the organization had become very inward looking. The trick

was how to expose people to the outside world to allow them to see what is happening there rather

than drilling change into them through speeches and letters. They felt that would be very artificial

and would upset intelligent people. The most effective way to sustain change is to make those

involved internalize it rather than just getting somebody to come and talk about it. For example,

they had people listen to customers talk about the problems they were facing and the suggestions

they had for product improvement. They exposed people to products of competitors by tearing those

products apart and analyzing the good and bad and comparing them with their own, thereby making

people see why customers buy someone else’s products rather than theirs.

Youth Playing a Major Role in Change Management:

The most frozen layer in any organization is the people with experience who think they know best;who believe that nothing can be changed. When they started to connect with the younger high

performers, it was very different. They used to have breakfast meetings with a dozen of them, and

would invite them to give very frank views. They soon realized that they were suffocated and that

they wanted change. So they started picking out some of these individuals and giving them

challenges.

In fact, the whole cost initiative came from one of the breakfast meetings at an operation in Pune.

Everyone had been talking about cost reductions and thinking in terms of one-half of a percent or 1

percent, but these young employees indicated that they thought a target of 10 percent was possible

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they made the senior people sit in front of the presentation, and it quickly became clear that 10

percent target was indeed achievable. After this, the young employees to put together a bigger team

from Jamshedpur and Lucknow, to include representatives from sales and marketing, and spend ten

days working on the plan. That was the defining moment because if they had tried to go only

through the top, they might not have succeeded as well, and the transformation might have takenmuch longer.

Despite initial hiccups, they succeeded in establishing a strong presence in the car market through

the launch of the Indica hatchback, followed by the Indigo sedan and the station wagon. Today they

are the second-largest manufacturer of passenger vehicles in India. This has been achieved in an

environment of intense competition with most well-known brands in the world.

TATA NANO

SWEEPING CHANGE :

Tata Nano, the new model introduced by Tata motors, hailed as "the people's car", is an amazingly

cheap car. With a price tag of US$ 2500, Tata Nano is indeed an affordable middle class family car.

Tata Nano is a dream comes true for an average Indian. His /her ideas about owning and driving a

car will become a reality soon. An analysis of the new car seems necessary as it is bringing mobility

to the masses in an efficient and economic manner.

Achieving the cost objective :

Tata has defied the conventional odds and sceptics in the industry through the innovation of the

world's cheapest car. Tata Nano is a marvel of a product yet audaciously economical and

mechanically simple. It is a breakthrough in frugal engineering where innovation is driven by cost

savings and sheer ingenuity. Tata managed to reorient the basic tenets of efficiency and practicality

to meet the cost target. Tata Nano's efficiency comes from including only those items that are

necessary for basic transportation and eliminating the not so relevant ones i.e. having one

part/component that can perform a task just as good as two parts/ components can do, thus resulting

in cost savings, e.g. one windscreen wiper and one side mirror. Tata also refrains from including

items that are not feasible due to monetary reasons. Radio, air conditioner, power steering are not

included while the instrument panel consists of only a speedometer, odometer, and fuel gauge

similar to that of the two-wheelers- basic, yet functional.

In addition, Tata has come up with practical ways to reduce car weight and thereby trim down the

overall cost. It uses comparatively small and light engine, a 623cc two- cylinder petrol engine made

of aluminium, unlike conventional engines which are made out of cast iron. The engine of Tata

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Nano is strategically placed at the back of f the car leaving the front section for luggage, that too

with the capacity of a briefcase. This is the most significant element in bringing down the weight

and the overall cost of the car. Other factors that contribute towards the weight reduction are the

usage of hollow steering wheel shafts, plastic body panels and smaller tubeless tyres. As a result of

these measures, Tata Nano weighs only about 590kg. Lesser weight and fewer parts mean less rawmaterial and lower cost for Tata Nano.

Safety in mind:

Besides having the right parts to meet the cost objective, Tata Nano has adequate features that

exceed current regulatory requirements and meet minimum safety standards. It has a sheet-metal

body with strong passenger compartment equipped with safety features such as crumple zones,

intrusion-resistant doors, seat belts, strong seats and anchorages. The rear tailgate glass is fixed tothe body and tubeless tyres enhance safety further.

Ownership cost:

It is quite obvious that Tata Nano is cheap to manufacture, but the question is, does owning and

operating a Nano over a period of time yield significant savings and benefits? While the low-price

tag of Nano looks attractive, it is important to look at certain other factors like the running cost of

the car in the long run. Potential buyers need to consider the rising price of petrol. Petrol prices

have breached the US$ 100 mark with no sign of abating as global demand skyrocketed. The influx

of thousands of Tata Nano on Indian roads would elevate the demand for petrol and this might bring

a new dimension to the continuous hike of petrol price in India, which still depends on the Middle

East for oil. Petrol prices may reach a point where owners of Tata Nano could no longer afford to

buy petrol to run it. If that is the case, Tata Nano owners may leave their cars behind and resort to

riding two-wheelers. In such a scenario, Tata Nano's value proposition may no longer make an

economic sense. The low cost of ownership model championed by Tata may not remain successful

at times of surging energy prices.

The would-be owners of Tata Nano have to consider the cost of replacement parts and service

maintenance for the car during the period of ownership. Tata Nano is built from scratch and most of

the component parts are new and do not share platform with other models in the Tata family. As a

result, it is difficult to assess the vehicle's reliability, durability and parts' longevity. These factors

along with unavailability of the model have made it difficult to estimate the cost of ownership of

Tata Nano and the frequency of service trips. The overall cost of parts and services of Tata Nano is

likely to be at the range of similarly sized car like Maruti 800. The perception of frequent parts

breakdown and shorter service interval due to sub-standard parts and inferior materials on budget

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cars may not hold true for Tata Nano. Tata Nano's component parts are developed and manufactured

by reputable component manufacturers like Bosch, Rico Auto, Lumax Group, Rane Group, Asahi

Glass etc. Moreover, the cost of parts and services is likely to decline as more Tata Nano cars are

driven on the road.

Nano overseas:

The rise in petrol prices makes consumers around the world to look for a low cost car. Tata seems to

capture this trend and is looking forward to introduce Tata Nano beyond Indian shores. One of the

countries where Tata Nano is likely to make inroads is Thailand, dubbed as the 'Detroit of Asia', due

to its extensive vehicle manufacturing activities in ASEAN region.

Thailand has introduced the 'Eco-Car' project, a framework laid by the government to build greencars that are fuel efficient and cost effective. Vehicle manufacturers all over the world are invited to

submit plans for the Eco-car investment project in Thailand. Various incentives have been provided

for manufacturers of green cars in Thailand, including exemption from corporate tax for up to eight

years and duty exemption for imported machinery. However, the investment should yield an output

of 100,000 units by the fifth year of production. Such initiative bodes well for Tata Nano. Tata is

one of the seven manufacturers that have submitted applications for the Eco-Car project and its

application has already been approved. Tata might use this plan to export to other ASEAN countries

through the ASEAN free trade area agreement (AFTA).

TATA MOTORS’ BIG PLANS

Tata Motors has decided to make some strategic changes. The first and foremost is that it is entering

into the combat vehicle manufacturing business. The other is that the company is planning to sell

some of its stake from its vehicle sales division. The auto company is now going to make combat

vehicles which are mine protected. MD Tata Motors (Indian Operations) PM Telang informed that

the aim of Tata Motors was to be present in every level of defense sector's value chain. It is going to

do this by consolidating its traditional supply chains and entering into higher level of equipment

manufacturing. Tata Motors will be looking forward to form partnerships. The company already has

its presence in defense sector ever since 1985. Meanwhile, it is also eager to sell some stake in Tata

Motors Finance Ltd. While no partner has been finalized till now, latest developments suggest that

SBI my go ahead and buy stake. India's largest bank wants to have a unit for giving loans to trucks

and buses and this requirement can be fulfilled by having a share in TMFL.

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NEED FOR THE CHANGE AT TATA MOTORS :

Change should not be done for the sake of change -- it's a strategy to accomplish some overall goal.

Usually organizational change is provoked by some major outside driving force, e.g., substantial

cuts in funding, address major new markets/clients, need for dramatic increases in

productivity/services, etc. Typically, organizations must undertake organization-wide change toevolve to a different level in their life cycle, e.g., going from a highly reactive, entrepreneurial

organization to more stable and planned development. Transition to a new chief executive can

provoke organization-wide change when his or her new and unique personality pervades the entire

organization.

RELEVANCE OF THE MODELS OF CHANGE

Kurt Lewin theorized that there are three stages to change:

Unfreezing :

Old ideals and processes must be tossed aside so that new ones may be learned. Often, getting rid of

the old processes is just as difficult as learning new ones due to the power of habits. Just as a

teacher erases the old lessons off the chalkboard before beginning a new lesson, so must a leader

help to clear out the old practices before beginning the new. During this part of the process you

need to provide just a little bit of coaching as they are unlearning not learning and a lot of

cheerleading (emotional support) to break the old habits.

Changing :

The steps to the new ideals are learned by practicing:

What I hear, I forget.

What I see, I remember.

What I do, I understand.

Although there will be confusion, overload and despair, there will also be hope, discovery, and

excitement. This period requires a lot of coaching as they are learning and just a little bit of

cheerleading due to the affect of Arousal Overloading.

Refreezing :

The new processes are now intellectually and emotionally accepted. What has been learned is now

actually being practiced on the job. Just a little bit of coaching is required and a lot of cheerleading

is used to set up the next change process, it is continuous process improvement.

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CHANGE IN WORKFORCE AND CULTURE

1. Formulation of a clear strategic vision: In order to make a cultural change effective a clear

vision of the firm’s new strategy, shared values and behaviors is needed. This vision provides the

intention and direction for the culture change.

2. Display Top-management commitment: It is very important to keep in mind that culture

change must be managed from the top of the organization, as willingness to change of the senior

management is an important indicator (Cummings & Worley, 2005, page 490). The top of the

organization should be very much in favor of the change in order to actually implement the change

in the rest of the organization. De Caluwé & Vermaak (2004, p 9) provide a framework with five

different ways of thinking about change.

3. Model culture change at the highest level: In order to show that the management team is in

favor of the change, the change has to be notable at first at this level. The behavior of the

management needs to symbolize the kinds of values and behaviors that should be realized in the rest

of the company. It is important that the management shows the strengths of the current culture as

well, it must be made clear that the current organizational does not need radical changes, but just a

few adjustments.

4. Modify the organization to support organizational change: The fourth step is to modify the

organization to support organizational change.

5. Select and socialize newcomers and terminate deviants: A way to implement a culture is to

connect it to organizational membership, people can be selected and terminate in terms of their fit

with the new culture.

6. Develop ethical and legal sensitivity: Changes in culture can lead to tensions between

organizational and individual interests, which can result in ethical and legal problems for

practitioners. This is particularly relevant for changes in employee integrity, control, equitable

treatment and job security.

Change of culture in the organizations is very important and inevitable. Culture innovations is

bound to be because it entails introducing something new and substantially different from what

prevails in existing cultures. Cultural innovation is bound to be more difficult than cultural

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maintenance. People often resist changes hence it is the duty of the management to convince people

that likely gain will outweigh the losses. Besides institutionalization, deification is another process

that tends to occur in strongly developed organizational cultures.

ROLE OF LEADERSHIP IN CHANGE MANAGEMENT

To be an effective leader of an organization requires you to do five things:

Understand and interpret the environment in which he operate Develop winning strategies Execute them brilliantly; Measure the impact of your strategies followers. If you get results, people will

support you, systematically, adjusting strategies as often without caring too

much about how you got indicated. Develop organizational, departmental; the world won't retain the support of

your followers’ team and personal capabilities.

Analyze theenvironmentthoroughly

Evaluate themsystematically

Evaluate thembrilliantly

Improve personal, team andorganization capabilities

Formulate winningstrategies

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Resistance to change :

• Inadequate Culture-shift Planning: Most companies are good at planning changes in

structure, work area placement, job responsibilities and administrative structure.

Organizational charts are periodically revised. Timelines, benchmarks are set and transition

teams are appointed. Failure to foresee the cultural change. Feelings of employees are

overlooked the result is deep resentment because some unrecognized tradition has not been

duly respected.

• Lack of Employee Involvement: People have an inherent fear of change. In most strategic

organizational change, at least some employees will be asked to assume different

responsibilities or focus on different aspects of their knowledge or skill. The greater the

change a person is asked to make, more pervasive thet person’s fear will be. There is fear of failure in the new role. As employees understand the reasons for the change and have an

opportunity to “try the change on for size” they more readily accept and support the change.

• Flawed Communication Strategies: Communication strategies in situations of significant

organizational change must attend to the message, the method of delivery, the timing, and

the importance of information shared with various parts of th eorganization. Many leaders

believe that if they tell people what they feel they need to know about the change, then

everyone will be on board and ready to move forward. A strategy of engaging direct

supervision and allowing them to manage the communication process is the key to a

successful change communication plan.

• Experience: Greatly experienced people resisted the changes as they were habituated to do

things the way they have been used to.

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PLANNING THE CHANGE AT TATA MOTORS

Tata Motors look at his eight steps for leading change below.

Step One: Create Urgency

For change to happen, it helps if the whole company really wants it. Develop a sense of urgency

around the need for change. This may help you spark the initial motivation to get things moving.

This isn't simply a matter of showing people poor sales statistics or talking about increased

competition. Open an honest and convincing dialogue about what's happening in the marketplace

and with your competition. If many people start talking about the change you propose, the urgency

can build and feed on itself.

What to do is:

• Identify potential threats, and develop scenarios showing what could happen in the future.

• Examine opportunities that should be, or could be, exploited.

• Start honest discussions, and give dynamic and convincing reasons to get people talking and

thinking.• Request support from customers, outside stakeholders and industry people to strengthen your

argument.

Step Two: Form a Powerful Coalition

Convince people that change is necessary. This often takes strong leadership and visible support

from key people within your organization. Managing change isn't enough - one has to lead it. It can

find effective change leaders throughout an organization - they don't necessarily follow the

traditional company hierarchy. To lead change, one need to bring together a coalition, or team, of

influential people whose power comes from a variety of

sources, including job title, status, expertise, and political importance. Once formed, “change

coalition" needs to work as a team, continuing to build urgency and momentum around the need for

change.

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What to do is:

• Identify the true leaders in your organization.

• Ask for an emotional commitment from these key people.

• Work on team building within your change coalition.• Check your team for weak areas, and ensure that you have a good mix of people from different

departments and different levels within your company.

Step Three: Create a Vision for Change

When we first start thinking about change, there will probably be many great ideas and solutions

floating around. Link these concepts to an overall vision that people can grasp easily and remember.A clear vision can help everyone understand why you're asking them to do something. When people

see for themselves what you're trying to achieve, then the directives they're given tend to make

more sense.

What to do is:

• Determine the values that are central to the change.

• Develop a short summary (one or two sentences) that captures what you "see" as the future of your

organization.

• Create a strategy to execute that vision.

• Ensure that your change coalition can describe the vision in five minutes or less.

• Practice your "vision speech" often.

Step Four: Communicate the Vision

What you do with your vision after you create it will determine your success. Your message will

probably have strong competition from other day-to-day communications within the company, so

you need to communicate it frequently and powerfully, and embed it within everything that you do.

Don't just call special meetings to communicate your vision. Instead, talk about it every chance you

get. Use the vision daily to make decisions and solve problems. When you keep it fresh on

everyone's minds, they'll remember it and respond to it. It's also important to "walk the talk." What

you do is far more important - and believable - than what you say. Demonstrate the kind of

behaviour that you want from others.

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What to do is:

• Talk often about your change vision.

• Openly and honestly address peoples' concerns and anxieties.• Apply your vision to all aspects of operations - from training to performance reviews. Tie

everything back to the vision.

• Lead by example.

Step Five: Remove Obstacles

If we follow these steps and reach this point in the change process, we've been talking about our vision and building buy-in from all levels of the organization. Hopefully, our staffs want to get busy

and achieve the benefits that you've been promoting. Put in place the structure for change, and

continually check for barriers to it. Removing obstacles can empower the people you need to

execute your vision, and it can help the change move forward.

What to do is:

• Identify, or hire, change leaders whose main roles are to deliver the change.

• Look at your organizational structure, job descriptions, and performance and compensation

systems to ensure they're in line with your vision.

• Recognize and reward people for making change happen.

• Identify people who are resisting the change, and help them see what's needed.

• Take action to quickly remove barriers (human or otherwise).

Step Six: Create Short-term Wins

Nothing motivates more than success. Give a company a taste of victory early in the change

process. Within a short time frame (this could be a month or a year, depending on the type of

change), one want to have results that your staff can see. Without this, critics and negative thinkers

might hurt your progress. Create short-term targets - not just one long-term goal. You want each

smaller target to be achievable, with little room for failure. Your change team may have to work

very hard to come up with these targets, but each "win" that you produce can further motivate the

entire staff.

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What to do is:

• Look for sure-fire projects that you can implement without help from any strong critics of the

change.• Don't choose early targets that are expensive. You want to be able to justify the investment in each

project.

• Thoroughly analyze the potential pros and cons of your targets. If you don't succeed with an early

goal, it can hurt your entire change initiative.

• Reward the people who help you meet the targets.

Step Seven: Build on the Change

Change projects fail because victory is declared too early. Real change runs deep. Quick wins are

only the beginning of what needs to be done to achieve long-term change. Launching one new

product using a new system is great. But if you can launch 10 products, that means the new system

is working. To reach that 10th success, you need to keep looking for improvements. Each success

provides an opportunity to build on what went right and identify what you can improve.

What to do is:

• After every win, analyze what went right and what needs improving.

• Set goals to continue building on the momentum you've achieved.

• Learn about kaizen, the idea of continuous improvement.

• Keep ideas fresh by bringing in new change agents and leaders for your change coalition.

Step Eight: Anchor the Changes in Corporate Culture

Finally, to make any change stick; it should become part of the core of your organization. Your

corporate culture often determines what gets done, so the values behind your vision must show in

day-to-day work. Make continuous efforts to ensure that the change is seen in every aspect of your

organization. This will help give that change a solid place in your organization's culture. It's also

important that your company's leaders continue to support the change. This includes existing staff

and new leaders who are brought in. If you lose the support of these people, you might end up back

where you started.

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What to do is:

Talk about progress every chance you get. Tell success stories about the change process, and repeat

other stories that you hear.• Include the change ideals and values when hiring and training new staff.

• Publicly recognize key members of your original change coalition, and make sure the rest of the

staff - new and old - remembers their contributions.

• Create plans to replace key leaders of change as they move on. This will help ensure that their

legacy is not lost or forgotten.

EMPLOYEES MOTIVATION TO ACCEPT THE CHANGE

It implies a tactical "quick fix" approach.

To achieve a peak performance from the people and in so doing, to create a genuine source of

competitive advantage demands a strategic approach that embraces Leadership style, corporate

cultures and the supporting business and management processes. It is all about the emotional

dimension - specifically the emotional commitment of employees and achieving an alignment and

maintaining the balance between corporate performance and individual employee fulfillment. In

practise this means establishing what is important to the people, communicating to them what is

important to you and the organization, and finding ways of meeting both their and organizational

goals.

There are 4 techniques to be taken care of for motivating employees in change management:

1. Clarity in all areas- especially of the business needs for the change, of the specifics of the

change, the benefits of the change, and most importantly the impacts of the change. Also, at an

individual level ensuring that people know precisely what is expected of them - i.e. you translate the

vision into actionable steps.

2. Communication – constant communication; two-way communication; communication that

explains clearly what is happening or not happening and why, that listens actively and demonstrates

to people through the impacts of the change on them.

3. Consistency - in all aspects of the way in which you lead the change, manage the delivery,

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handle the communication, and ensure the realization of the benefits.

4. Capability - constant attention to the management of the projects and initiatives that are

delivering the capabilities into your organization that will deliver the benefits.

EVALUATING THE CHANGE PROCESS AT TATA MOTORS

Evaluating the organizational change in culture, Tata Motors follow different approaches such as,

analysing the fundamental assumptions, investigating the cultural gaps and managerial behavior in

the organization.

There are different models provided for investigating and analyzing the organizational culture. But

in our researches we applied the “Denison” model. This model is one of the most comprehensivemodels that divide the organizational culture into four parts based on two axels (degree of focus and

degree of stability).

On the basis of organizational concentration It is possible to divide this model into two parts by

horizontal dissection. Cooperation and compatibility pay attention to organization internal

dynamism, but they don’t care about their relations with external environment. Yet adaptability and

mission consider organization’s connection with the external environment. It is also possible to

divide the model into two parts by vertical dissection. Involvement and partnership enforce onorganization’s capacity for flexibility and change, although compatibility and mission enforce on

stability and having a specific path. Regarding to researches these four cultural characteristics have

a positive influence on organization performance.

Characteristics have its own specifications that will be described below:

Adaptability: Making the demand of market practical is called adaptability. Belief and normsystems of the organization perform the related behavioral changes by supporting organization’s

opportunities and it will increase the organization’s chance for survival, development and expansion

with the help of perception, explanation and rendition of environmental signals, and. There are three

aspects of adaptability considered in Denison model which affect the organization’s effectiveness.

The First aspect is called the ability of realization and reacting to the external environment.

Nowadays successful organizations are the ones which has a special emphasis on their customers

and competitor’s behaviors. Second aspect is the ability to reacting to internal events withoutconsidering level, department, function and output. And the third aspect is the capacity and ability

to organize and reengineer processes and behavioral structures which help the organization to adapt

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with new conditions. Without this ability the organization will miss its effectiveness.

The standards for adaptability are:• Making the changes,•

Customer focus,• Organizational learning.

Constancy: defines the values and systems which form a strong culture. Constancy provides a

central force for organizational solidarity and harmony. Organizations provide constancy by

developing a set of organizational systems that establishes an internal management system on the

basis of bilateral support of employees and employers. These organizations have committed

employees, core values, different ways to perform business, tendency for promotion and an obviousset of rules that determine things musts and mustn’t. Constancy creates a powerful organizational

culture based on joint beliefs, values and symbols which are reasonable and perceivable for the

employees. Internal control systems that are based on organization’s values are more effective

tools in order to reach integrity and coordination than external control systems that are on the basis

of rules.

Standards for this cultural characteristic are:• Integrity and coordination• Core values• Agreement.

Involvement: What we mean by involvement is to increase responsibility in employees.

According to organizational culture when employees are highly attached to their work, they are

encouraged to involve in performance and have responsibilities. These organizations have informal,volunteer controls instead of formal, obvious ones. Responsibility causes commitment and

independency in employees and improves employees’ decisions quality.

Standards of involvement are:• Empowerment• Capability development• Team orientation

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Mission: defines a long term direction for the organization. Mission distinguishes goals of the

organization with defining social role and external objectives of the organization. With the help of

the direction and these distinct goals, mission specifies the activities that should be performed by

the employees. Considering the position where organization is planned to reach, activities and

strategies will be identified. Probability of organization’s success will be increased by convergingemployees and the organization.

Standards of this section are:• Strategic direction and intent• Goals and objectives• Vision

OD INTERVENTIONS AND ITS IMPLEMENTATION

Organization Development (OD) interventions techniques are the methods created by OD

professionals and others. Single organization or consultant cannot use all the interventions. They

use these interventions depending upon the need or requirement.

The most important interventions are:• Survey feedback.

• Process Consultation.

• Sensitivity Training.

• The Managerial grid.

• Goal setting and Planning.

• Team Building and management by objectives.

• Job enrichment, changes in organizational structure and participative managementand Quality circles, ISO, TQM.

RELEVANCE OF OD INTERVENTION

OD interventions are basically behavioural science interventions, it has got great impact in

improving the operational efficiency of TATA MOTORS. It has to be specially noted that different

OD interventions do not differ much in their effect.

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Application of OD interventions helps in the following aspects:

1. Behaviour Modification: It is a programme where managers identify performance- related

employee behaviours in tourism destinations and then implement an intervention strategy like MBO

to strengthen desirable performance behaviours and weaken undesirable behaviours.

2. Encounter Groups: Encounter groups aim to provide participants with

intense experiences to help them their ways of interacting with tourists, their

styles of self presentation, their values, etc.

3. Role playing: Role playing develops certain competencies such as perceiving

the feelings and ideas of tourists, learning skill of relating a situation, gaining better insight into inter-personal relations.

STRATEGIES TO MANAGE CHANGE PROCESS

• There must be situational awareness so that the employees adapt such organizational changes

and get motivated to accept a change.•

There must be supporting structure so that employees manage a change in a organizationeasily and top level management people support him for that.

• Strategy analysis must be done so that employee would aware about what would be the

change and what step must be taken to manage the change.• Training program must be there before the change exactly take place.• Proper communication must be there among the top level management and the employees

working in an organization.•

Career opportunities must be given to the employees as a non-financial benefits so that theyget motivated.

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CONCLUSION

Tata motors have fulfilled the customer’s satisfaction. This was the key factor that drived

Tata motors towards success. They have met their customer’s expectation by providing customized

and low cost products & services. In the mid of resistance from both organizational forces and

individual forces, Tata motors implemented change strategies in order to survive and compete in the

changing market scenarios. Tata motors employed Levin’s model to bring the desired changes.

The changes were mainly Third –Order i.e. changes were made in the organization’s structure,

processes, roles& responsibilities and technology. External environment forces and customers needs

& demands were the major Change- agents. Tata Nano should meet the consumer's expectations by

providing a reliable and modestly safe vehicle to drive. The car, with its immense recognition

gained even before its launch, is expected to fulfil the dreams of common people.

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