Project Report - Role of Communication in Effective Change Management (a Case Study of Godrej Group)

Role of Communication in Effective Change Management


ROLE OF COMMUNICATION IN EFFECTIVE CHANGE MANAGEMENT

Abstract

A plethora of theory, research and

practice in change management has

evolved considerably over decades,

and experienced a major

transformation in form and function

amid a rapidly changing environment.

Oftentimes, many organizations with

radical change transition sent angle

themselves in the mess of chronic

management impediments. In recent

years, the role of communication

strategies emerges to solve the puzzle

of the change upheaval by providing a

comprehensive mechanism to

facilitate a change process. Based on

a case study of Godrej Group – brand

and business status introduction, this

research has two aims. First, a

conceptualized framework of the

integrated role of communication

strategies formulation in conjunction

with change management process is

mapped out. Also, it intends to

investigate some depth of understanding of how the executives at different management levels perceive

the internal communication process surrounding the change in the Godrej Group. Second, such a

framework has been theoretically explored and empirically demonstrated to examine the process of

2

Role of Communication in Effective Change Management(A Case Study of Godrej Group)

Research Paper

Rashmi RawatPGD in Strategic Human Resource Management (PGDSHRM)Department of Business AdministrationFaculty of CommerceThe Maharaja Sayajirao University of Baroda17/01/2012


strategic formulation of corporate communications in accordance with diverse phases of changes to the

Godrej Group. The research paper is attributable to a double-edged management contribution. It can

reflect a new construct of academic theories and suggest a gap which the firm may leave unaddressed in

the first place. Due to time and space constraints, a number of relevant issues are selected for succinct

discussion on a basis of theoretical and practical perspectives. Last but not least, implications,

limitations, and further research are discussed.

The structure of the paper incorporates six chapters addressing both foundational grounds of theories and

practices. This chapter is particularly devoted to an introduction of the study rationale on change, change

management, issues of change management. Chapter Two features a review of literature on the

fundamental concepts of communication strategies and change management processes. For Chapter

Three, the Godrej Group Case background, together with significant findings from the fieldwork, reveals

the underpinning reasons of which the brand and business status changes are expedited. The key findings

are derived from an analysis of the secondary data. Moreover, the obtained findings attempt to answer

the author’s questions regarding the purpose of the research. A conceptualized framework of the study is

thereafter developed. Chapter Four includes in-depth discussions about the findings pertaining to the

literature. Last but not least, Chapter Five comprises concluding remarks, implications and limitations,

and further research.

Keywords

Change Management, Effective Communication, Role of Communication, Case Study of Godrej Group

3


Letter of Submission

Ms. Rashmi Vijay Kunwar Singh Rawat Examination Seat Number. 38 PG Diploma in Strategic Human Resource Management Faculty of Commerce, The M S University of Baroda Vadodara-390 005

Date: 12/01/2012

To,

The Course DirectorPG Diploma in Strategic Human Resource Management Centre for PG Studies in Commerce Deep Building Faculty of Commerce The M S University of Baroda Vadodara-390 005.

Sub: Submission of Project Report Entitled “Role of Communication in Effective Change Management”

Sir,

As desired, I am pleased to submit herewith the Soft Copy [CD] and a Hard Copy of the Project Report

entitled “ROLE OF COMMUNICATION IN EFFECTIVE CHANGE MANAGEMENT [A Case Study

4


of GODREJ GROUP]” as a partial fulfillment for the award of for PG Diploma in Strategic Human

Resource Management to our esteemed The M S University of Baroda for your perusal and necessary action

please.

Thanking you,

Yours faithfully,

(Ms. Rashmi Rawat)

Enclosure: As Above

THE M S UNIVERSITY OF BARODA

FACULTY OF COMMERCE

CERTIFICATECERTIFICATEThis is to certify that Ms. Rashmi Rawat (Exam Seat This is to certify that Ms. Rashmi Rawat (Exam Seat

Number. 38)Number. 38)

of of

PGDSHRM PGDSHRM

(First Semester: 2011 – 2012) (First Semester: 2011 – 2012)

has satisfactorily completed her project work onhas satisfactorily completed her project work on

““ROLE OF COMMUNICATION IN EFFECTIVE CHANGE MANAGEMENT

[A CASE STUDY OF GODREJ GROUP]”

forfor

Partial fulfillment of the degree ofPartial fulfillment of the degree of5


Post Graduate Diploma in Strategic Human ResourcePost Graduate Diploma in Strategic Human Resource

ManagementManagement

ofof

The M.S.University of Baroda.The M.S.University of Baroda.

(Mr. Kalpesh Purohit) (Prof. Parimal H. Vyas)

Project Guide Course Director (Ms. Rashmi Rawat)

Acknowledgements

This report could not have been completed without the ideas, encouragement,This report could not have been completed without the ideas, encouragement, cooperation, and assistance of numerous individuals. First, and foremost, mycooperation, and assistance of numerous individuals. First, and foremost, my

project guide Mr. Kalpesh Purohit, has been an inexhaustible source of advice andproject guide Mr. Kalpesh Purohit, has been an inexhaustible source of advice and knowledge not only throughout the completion of the research project but alsoknowledge not only throughout the completion of the research project but also

throughout my entire PGDSHRM Program at the Centre for PG Studies, Faculty ofthroughout my entire PGDSHRM Program at the Centre for PG Studies, Faculty of Commerce,Commerce, The Maharaja Sayajirao University of Baroda.The Maharaja Sayajirao University of Baroda.

I owe a great debt of gratitude to Dr. Parimal Vyas, Director of Centre for PGI owe a great debt of gratitude to Dr. Parimal Vyas, Director of Centre for PG Studies, Faculty of Commerce, , who have been instrumental in facilitatingStudies, Faculty of Commerce, , who have been instrumental in facilitating

accessibility to the institution and providing necessary information at the outset ofaccessibility to the institution and providing necessary information at the outset of the project. Additionally, their comments have directed my critical attention tothe project. Additionally, their comments have directed my critical attention to

the theories and thinking that are the foundation of case research in changethe theories and thinking that are the foundation of case research in change management.management.

Finally, I am profoundly grateful to my parents, family members, and friends forFinally, I am profoundly grateful to my parents, family members, and friends for their support and understanding during this intensive challenging research projecttheir support and understanding during this intensive challenging research project

and throughout my post graduation career.and throughout my post graduation career.

6


Certificate of Originality

This is to certify that this project Report entitled "Role of

Communication in Effective Change Management ( A Case

Study on Godrej Group)” which is to be submitted to the

Course Director, PG Diploma in Strategic Human Resource

Management, Faculty of Commerce, The M S University of

Baroda has been prepared by Ms. Rashmi Rawat,

Examination Seat Number.38) in partial fulfillment of

requirement for the PG Diploma in Strategic Human

Resource Management.

She has carried out this work under my personal

supervision and guidance. The work is an original one and

has not been submitted earlier to this university or to any

other institution / organization for fulfillment of the

requirement of a course or for award of any other Degree /

Diploma / Certificate Course.

7


(Mr. Kalpesh Purohit) (Ms. Rashmi Rawat)

Project Guide Student

Table of Contents

Chapter I Introduction

Chapter II Literature Review: Theoretical Perspectives

2.1 Change Management Theories

2.2 Communication Strategy Theories

Chapter III Case Study

3.1 Case Overview

3.2 Issues and Observations

Chapter IV Discussions

4.1 Practical Views of Change Management

4.2 Communication Strategies Reinvigorated

4.3 Integrative Communication Strategies in Change Process

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Chapter V Conclusion and Further Research

5.1 Concluding Remarks

5.2 Implications

5.3 Research Limitations

5.4 Further Research

Bibliography

CHAPTER I

Introduction

“It is not the strongest of the species that survives, nor the most intelligent; it is the one that is most

adaptable to change“

- Charles Darwin (1808-1892)

In a highly competitive environment, the dynamism for changes in any large organizations becomes

indispensable for greater success and excellence. Most business leaders and top executives in various

industries have been vigilant toward the modification of business strategies along with “effective and

continuous” changes up to reach their potential. In addition, nowadays, pressures for change are not

merely stemmed from the organizational elements but also the international forces galvanized by the

notion of globalization, technology, and competition. Therefore, revolutionary changes have been

prioritized as one of the most important agendas needed for discussion in a parallel relationship with other

management issues.

Organizational scholars have long acknowledged the importance of communication processes in

explanations of organizational change (Lewis and Seibold, 1996; Rogers, 1995; Fairhurst and Wendt,

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1993). Nonetheless, Lewis (2000a) argues that the systematic research about the effectiveness of

communication strategies about change is sparse. Connected to that, though the various research on

change management has been produced in reflection of diverse organizational angles, the communication

strategy, which serves as a critical instrument in facilitating changes, falls short of academics’ attention.

Additionally, the extant literature has insufficiently provided a wide range of case examples, which may

broaden horizons of change on real business circumstances. If changes are expected to occur over a long

period and are likely to involve high ambiguity at some points, then this should be clearly communicated

in advance in order to avoid potential loss of momentum, disappointment, and cynicism in certain groups

of employees (Heracleous and Langham, 1996).

From the aforementioned aspects, it triggers the author’s interest to conduct research on how the

communication strategies help effectively facilitate change management processes, especially in a large

organization. Since this integrative study of the subjects is under researched, an exploratory case

approach is considered an appropriate tool to be employed on the basis of empirical research

methodologies. In terms of the case selection, Godrej Group proves to be an intriguing case of an

organization in transition where both change management and communication strategy theories play

major roles in bringing out successful change. Of the voluminous issues of changes within Godrej Group,

the new brand and business status introduction has received much attention from both internal employees

and external stakeholders but not been yet well researched. Basically, it has undergone some extensive

changes on the purpose of image improvement, particularly in the international market. Owing to some

constraints, the research project in fact tends to focus on how the senior managers generally perceive the

internal communication in light of changes within Godrej Group and, thereafter, how the communication

strategies are formulated so as to enhance the change management process.

In relation to that, the first research question aims to investigate some depth of understanding of how

senior managers at different management levels perceive the internal communication process surrounding

the change in the Godrej Group and the strategies they formulate to respond to change. From this initial

question, a fundamental ground of the critical inquiry tends to be addressed in the first place, thereby

leading to a further quest asserted in the following question. The nature of the second question is to

examine the process of strategic formulation of corporate communications in accordance with diverse

phases of changes to Godrej Group.

Once synonymous with locks and safes today it has presence in FMCG, consumer electronics,

engineering, IT and other fields. Safely ensconced in the protective environment of the license raj, the

liberalization of 1991 and the ensuing challenges from the MNCs provided yet another stimulus for

change. The company shed its image of a closely held family business and moved from a family-owned

family managed to family- owned professionally managed organization. The movement has been gradual

and marked with a number of hindrances. This can be attributed to the organizational inertia which tries

to maintain the status quo. 10


The two major companies of Godrej group – Godrej & Boyce and Godrej Industries Limited,

have sea change of difference in organizational culture and focus areas. While, Godrej & Boyce

continues to focus on consumer, industrial and office equipment products, Godrej Industries

Limited is more dynamic and focuses on range of sectors including FMCG, retailing, food, IT, real

estate, etc. It gives a lot of independence to its affiliate companies and subsidiaries in decision-making.

However, the control of Godrej family exists with family members having full control or as board

members in some of the companies. The company had other shares of troubles as well, for

instance unsuccessful partnership with P&G.

Godrej has since 1990 deliberately undertaken a process of self-improvement. The main problem faced

by the group in 1991 was that it was getting too bureaucratic with slow pace, getting bogged down in

routine matters, too many slow-moving products and a reluctance to do away with old practices.

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CHAPTER II

Literature Review

In this chapter, voluminous streams of literature on change management and communication strategy are

reviewed. Though both issues have been extensively researched and empirically demonstrated in the

organizational level, many extant studies have left an integrative pattern of those constructs unheeded,

particularly on how communication strategies are formulated to enhance the change efforts. Not only are

some theoretical aspects of communication and change processes presented, but certain case examples

also are illustrated to mirror their practicability.

The outline of the literature review is divided into two main sections: change management theories and

communication strategy theories. In each section, a foundational ground of theories aims to provide the

comprehensive evolution of the constructs to be studied in this research.

2.1 Change Management Theories

2.1.1 Definition of Changes

Prior to delving into the complexity of change management, it is imperative to highlight the fundamental

definition of changes, including organizational change, to seek for a common standpoint. Burnes (2000)

depicts that change is a multi-level, cross-organization process that unveils an iterative and messy fashion

over a period of time and comprises a series of interlocking projects. Berger (1994: p. 7) defines change

management as “the continuous process of aligning an organization with its marketplace and doing it

more responsively and effectively than competitors.” Thus, organizational change management is a

continuous process of experiment and adaptation aimed at matching an organization’s capabilities to the

needs and dictates of a volatile environment (Burnes, 2000). By the same token, Lichtenstein (2000)

views organizational change as a transformative change through a complex adaptive system model of

change, which consists of three stages: increased organizing, tension and a threshold, and newly emerging

configuration.

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Nonetheless, in the article, Managing Rapid Change: From Theory to Practice, written by McDonald

(2000), theoretical and practical perspectives on organizational change are distinguished. He notes that

some academics have applied Darwin’s “survival of the fittest” theory to the organizational change theory

(Vaill, 1989). It means that any organizations which fail to make changes are likely to be eliminated by

the competition. In practice, several organizations have put an emphasis on measurable ‘results driven

change’ because it serves as one of the most powerful approaches to change management. Such

evaluation results primarily purport to spell out the level of corporate performance improvement.

Scrutinized from those perspectives, both academics and practitioners have contributed to the notion of

changes that aims to help the firm outperform competitors.

Burke and Litwin (1992) argue that, despite the complexity of change issues, the notion of

transformational and transactional dynamics inherent in successful change efforts can be identified (see

Appendix1). Transformational factors deal with areas that require new employee behaviors as a

consequence of external and internal environmental pressures, such as leadership, culture, and mission.

On the contrary, transactional factors deal with psychological and organizational variables that predict

and control the motivational and performance consequences of a work group’s climate. These variables

include management practices, structure, systems (policies and procedures), and task requirements.

2.1.2 Significance of Change Management

The concept of change in organizations has captured both academics’ and practitioners’ attention for

decades. Kennerfalk and Klefsjo (1995) suggest that the fundamental changes in organizations can be

categorized into two main dimensions: changes in culture (Silvester et al., 1999; Brown, 1998) and

changes in structure (Daft, 2001; Bloodgood and Morrow, 2000). As for the structural change in

organization, Fenton and Pettigrew (2000) study about the evolution of the theoretical perspectives of

organization design, ranging from bureaucratic organization (Weber, 1947) to network organization

(Uzzi, 1997) during the past 50 years. In their work, empirical evidence on change management

constructs is emphasized. On the other hand, Chandler (1994) comments that the importance of change

management in 1990s can be better comprehended if it is viewed in the context of corporate expansion,

contraction, and restructuring.

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In a general perspective of a change management model, major organizational characteristics, underlying

systems and business strategies are rigorously investigated and essential to accommodating

transformation (Laud, 1994). The Andersen Consulting’s Organizational Change Model in Figure 1

draws on a classic outcome of research and experience from the fields of management and organizational

behavior, whereby corporate culture is placed at the heart of the change management process. It is

theoretically derived from an input-process-output model.

Figure 1: Andersen Consulting’s Organizational Change Model

Source: Adapted from Laud, R. L. (1994). “The Tortoise and the Hare: Cultural Change and Corporate Strategy.”

In The Change Management Handbook: A Road Map to Corporate Transformation. Edited by Berger, Sikora, and

Berger McGraw-Hill.

If strategic change is to be succeeded, the important changes should take place in the cultural beliefs and

assumptions of the organization (Heracleous and Langham, 1996) leading to the cultivation of employee

commitment (Unzicker et al., 2000). Ellis (1998) conducts research on a new role and reveals three

underpinning dimensions for the strategic change: organizational culture, change management and

technology-enabled change.

Oftentimes, change agents, or persons who trigger and mobilize the change schemes, raise an issue of

how the change effort can be assessed (Reichheld, 1994). Practically, the magnitude of change is difficult

to be measured due to unprecedented situations and organizational environments involved (Burnes, 2000;

Brown 1998; Peters, 1998; Kanter et al., 1997; Brown 1995). In the existing literature, Burnes (2000)

asserts that there are three current models addressing the characteristics of change magnitudes; the

incremental model of change (Miller and Friesen, 1984), the punctuated equilibrium model of

organizational transformation (Romanelli and Tushman, 1994), and the continuous transformation model

of change (Brown and Eisenhardt, 1997).

External Environment Culture

Competitive Environment

Structure

Leadership

Work Force

ProcessVision/ Strategy

Output

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In the work of Pettigrew and Fenton (2000), change initiatives such as delayering, decentralizing,

networking and information technology investment will not succeed if done piecemeal. To reap the

benefits of organizational change, particularly galvanized by innovation, firms must think and act

holistically and make changes on several fronts in careful alignment.

Furthermore, ample evidence shows that managers have a good reason to be anxious about

organizational change (Stickland, 1998; Sastry, 1997; Stace and Dunphy, 1994). If managers and change

agents utilize a well-orchestrated, integrated design that responds to needs for learning, realignment,

negotiation, and grieving, they might find themselves in the fast lane toward success and improvement

(Bolman and Deal, 1999). For example, John Sunderland of Cadbury Schweppes successfully

communicates his change message across a multinational corporation in various countries where working

cultures and environments are enormously disparate (McCune, 1999).

The road to change is never paved with roses, no matter how good the intentions or far-reaching the

support will be. As the successes and failures of companies have been enumerated, it is clear that any

organization that needs to succeed in the 1990s and beyond must have a systematic and well-lubricated

change management process in place. Given the frequency and potency of change, the system is no frill

but a radical life-support network (Berger, 1994).

2.1.3 Forces for Change

An amalgam of industrial and organizational challenges has much contributed to a new pace of change

with multidimensional facets. Essentially, the forces impacting change are powerful and pervasive

(Sikora, 1994). It is imperative to conduct an organizational analysis of external conditions and internal

forces that affect the need for change and the development of change strategies (Kanter et al., 1992). As

such, the interrelationships among internal forces for change, external forces for change, and

organizational characteristics can be cooperating initiators of a change process (Witherspoon and Wohlert

1996; Levy and Merry, Somboon Kulvisaechana 1986). External forces for change include market

forces, legislation, tax structures, new technologies, and political reasons. Whereas internal forces for

change are profitability, reorganization, conflicts between organizational components (departments), and

changes in culture/social environment (Anonymous, 1999).

Harari (1999a) and McCune (1999) reiterate that various uncontrollable factors emerge to shake up the

majority of the business organizations. Some of them are the explosion of technological advances, the

crumbling of global barriers to entry, the swarm of new competitor, the antipathy of the most talented

employees toward bureaucratic controls, and the insistence of customers on being treated as individuals,

not as part of a mass market (Sikora, 1994).

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Unfreeze Change Refreeze

Ensure that employees are ready for changeExecute the intended changeEnsure that the change becomes permanent


2.1.4 Kurt Lewin’s model for Change Management

The work of Kurt Lewin dominated the theory and practice of change management for over 40 years. His

is an approach to understanding group behaviour by trying to map out the totality and complexity of the

field in which the behaviour takes place (Back, 1992). Lewin maintained that to understand any

situation it was necessary that: ‘One should view the present situation – the status quo – as being

maintained by certain conditions or forces’ (Lewin, 1943a, p. 172). Lewin (1947b) postulated that group

behaviour is an intricate set of symbolic interactions and forces that not only affect group structures, but

also modify individual behaviour. Therefore, individual behaviour is a function of the group environment

or ‘field’, as he termed it.

Consequently, any changes in behaviour stem from changes are small or large, in the forces within the

field (Lewin, 1947a). Lewin defined a field as ‘a totality of coexisting facts which are conceived of as

mutually interdependent . . .’ (Lewin,1946, p. 240). Lewin believed that a field was in a continuous state

of adaptation and that ‘Change and constancy are relative concepts; group life is never without change,

merely differences in the amount and type of change exist’ (Lewin, 1947a,p. 199). This is why Lewin

used the term ‘quasi-stationary equilibrium’ to indicate that whilst there might be a rhythm and pattern to

the behaviour and processes of a group, these tended to fluctuate constantly owing to changes in the

forces or circumstances that impinge on the group.

Lewin’s view was that if one could identify, plot and establish the potency of these forces, then it would

be possible not only to understand why individuals, diminished or strengthened in order to bring

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about change. In the main, Lewin saw behavioural change as a slow process; however, he did recognize

that under certain circumstances, such as a personal, organizational or societal crisis, the various

forces in the field can shift quickly and radically. In such situations, established routines and behaviours

break down and the status quo is no longer viable; new patterns of activity can rapidly emerge and a

new equilibrium (or quasi- stationary equilibrium) is formed (Kippenberger, 1998a; Lewin, 1947a).

Despite its obvious value as a vehicle for understanding and changing group behaviour, with

Lewin’s death, the general interest in Field Theory waned (Back, 1992; Gold, 1992; Hendry, 1996).

However, in recent years, with the work of Argyris (1990) and Hirschhorn (1988) on

understanding and overcoming resistance to change, Lewin’s work on Field Theory has once again

begun to attract interest. According to Hendry (1996), even critics of Lewin’s work have drawn on Field

Theory to develop their own models of change (see Pettigrew et al., 1989, 1992).

Indeed, parallels have even been drawn between Lewin’s work and the work of complexity theorists

(Kippenberger, 1998a). Back (1992), for example, arguedthat the formulation and behaviour of

complex systems as described by Chaos and Catastrophe theorists bear striking similarities to Lewin’s

conceptualization of Field Theory. Nevertheless, Field Theory is now probably the least understood

element of Lewin’s work, yet, because of its potential to map the forces impinging on an individual,

group or organization, it underpinned the other elements of his work.

Group Dynamics

. . . the word ‘dynamics’ . . . comes from a Greek word meaning force . . . ‘group dynamics’ refers to the

forces operating in groups . . . it is a study of these forces: what gives rise to them, what conditions

modify them, what consequences they have, etc. (Cartwright, 1951, p. 382)

Lewin was the first psychologist to write about ‘group dynamics’ and the importance of the group in

shaping the behaviour of its members (Allport, 1948; Bargal et al., 1992). Indeed, Lewin’s (1939, p. 165)

definition of a ‘group’ is still gener-ally accepted: ‘. . . it is not the similarity or dissimilarity of

individuals that constitutes a group, but interdependence of fate’.

In addition, Dervitsiotis (1998) embarks on the major forces for organizational change, which are

attributed to the following characteristics:

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• A sufficient dissatisfaction with the status quo as described by current performance levels and their

trends;

• A strong attraction towards moving to a more desirable condition or improvement; and

• The appeal of a well-thought-out strategy for realizing the vision.

In the absence of any one of the three forces, there is no motivation to provoke management to act for

bringing about organizational change.

With the aforementioned factors to change, their ramifications tend to be of constructive benefits to the

organization at the expense of the hurdle of employees’ response to change in the first place (Lewis,

2000a; Markus, 1983). Though some studies reveal that, due to a strong desire to remain the status quo,

employees attempt not to change from what they are currently doing, the hindsight of change resistance is

still under-researched.

2.1.5 Resistance to Change

Of the many studies on change efforts, the issue of change resistance has always been included as part of

notorious impediments throughout the change stages. In fact, it is argued that employees do not resist all

change, only change that they do not understand or that they see as psychologically or economically

threatening (Hayes, 1996; Baird et al., 1990). As such, they usually respond to contradictory messages

with displeasure, frustration, confusionand anxiety (Stohl, 1995). Connected to that, the change

resistance, which may occur during change efforts – reduction of productivity, work slowdowns, hostility

and pessimism regarding goal attainment, can be attributed to several political, cultural, normative, and

individual causes (Miller et al., 1994). As for understanding the notion of resistance to change, Hayes

(1996) asserts that one needs to identify the factors underpinning such resistance. They are self-interest,

fear, group pressures, and inertia.

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In the review of empirical research, Piderit (2000) posits that there are three different emphases in

conceptualizations of resistance: as a cognitive state, as an emotional state, and as a behavior. These

constructs might be well understood through the sources of change resistance, which are individual and

organization levels (Hellriegel et al., 2001; Dent et al., 1998; Strebel, 1996; Brown, 1995) as shown in

Figure 2.

In the work of Stoltz (1997), three categories of peoples’ reactions to change are: quitters who disagree

with change; campers, who simply sit things out, and climbers, who actively seek change. From his

study, it shows that the majority of the employees fall into the ‘campers’ category, whereby the desire to

remain status quo is initially prevalent.

Interestingly, in the article, Why Do Leaders Avoid Change?, written by Harari (1999a), some managers

try to keep themselves away from any kinds of change. Not only does their fear of failure become the

primary issue, but also loads of work, additional to what they currently have, appears to be an unpleasant

consequence.

Figure 2: Sources of Change Resistance

Source: Hellriegel, D., Slocum, J. W. & Woodman, R. W. (2001). “Organizational Behavior” Ninth Edition. South-Western College Publishing.

Individual Resistance

Perception

Personality

Habit

Threat to power and influence

Fear of the unknown

Economic Reasons

Organisational Resistance

Organisation Structure

Organisational Culture

Resource Limitation

Fixed Investments

Inter organisational agreements

Resistance to Change

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As for optimizing the change resistance, managers are required to observe employee readiness for change.

Normally, their readiness emerges when the employees perceive little personal risk from change and feel

highly dissatisfied with the status quo (Hellriegel et al., 2001). With this respect, resistance to change

seems to be submerged. In addition, successful organizational adaptation is increasingly reliant on

generating employee support and enthusiasm for proposed changes, rather than merely overcoming

resistance (Pederit, 2000).Hayes (1996) proposes that resistance to change can be optimized by utilizing

the following strategies:

Participation and involvement (Daft, 1995; Smith, 1995);

Facilitation and support (Daft, 1995; Kirkpatrick, 1985);

Negotiation (Daft, 1995; Ivancevich et al., 1994);

Coercion (Humphreys, 1996).

Because some employees will already have formed ambivalence or an attitude toward the current point,

they may be able to infer their attitude toward the proposed shift for change in accordance with the extant

ambivalence. In other words, most employees’ responses to a proposed change will involve some

ambivalence. Thus, Piderit (2000) comments that their resistance to change does not always spell out the

antagonistic attitude against change, rather than expressing their responses along emotional, cognitive,

and intentional dimensions. For this reason, the phrase “resistance to change” should be retired and a new

wave of research on “employees’ responses to change” is to be emphasized. Hellriegel et al. (2000)

supports the idea of replacing the above phrase with “pressure to change.”

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2.1.6 Change Formulation and Implementation

After examining the thrust for change and potential resistance to change within the organization, the

formulation of change strategies serves as a subsequent pivotal step to be undertaken. Fundamentally,

there are diverse ways to formulate change strategies, depending upon the extent of potential change, the

time and the information available and the power distribution in the organization (Heracleous and

Langham, 1996). According to the literature, a change management team with high credibility and

intellectual ability should be identified in the first place (Heracleous and Langham, 1996). Such a team

normally comprises change agents, or top managers, and other key persons to trigger and mobilize the

change engines throughout the organization. Not only do the top managers play this critical role, but

middle-level managers can also bring about profound change since they are the ones who directly involve

in day-to-day business operations (Harari, 1999b).

Although a debate between general managers and change specialists in taking charge of the change drives

is substantial, there is usually one individual, regardless of those titles, who takes charge of ensuring the

change effort takes place and is well carried out (Burnes, 2000). With this respect, Hartley et al. (1997)

and Beer (1994) argue that there has been relatively little empirical research on the clear-cut roles played

by change agents. However, Buchanan and Boddy (1992), cited by Burnes (2000: p. 298), analyze the

skills and competency essential to be a successful change agent by depicting that “a picture of the change

agent is a highly skilled and well-trained political operator who has not only an in-depth knowledge of

change processes and tools, but also the personal qualities an experiences to use them both in the open,

and especially, behind the scenes

In order to formulate change strategies, a series of change stages needs to be closely scrutinized.

Traditionally, Lewin (1947), cited by Burnes (2000), provides a classic framework of change levels:

unfreezing, moving and refreezing. Each phase is consistent with certain social behaviors and a particular

cognitive state (Brown, 1995). A better understanding of change has been supported by empirical

evidence from various authors, namely Weiss (2001), Bloodgood and Morrow (2000), Bolman and Deal

(1999), and Day (1999). In the recent work of Armenakis and Bedeian (1999), employee behaviors in the

change process have been extensively studied. Furthermore, Isabella (1990) and Jaffe et al. (1994)

propose a relatively similar model of change stages as to the employee’s reaction as shown in Figure 3

21


Figure 3: Stages of Change

.”

Source: Adapted from Armenakis, A. A. & Bedeian, A. G. (1999). “Organizational Change: A Review of Theory and Research in the 1990s.” Journal of Management, vol. 25, iss. 3, p. 300

Throughout the aforementioned stages of changes, the change messages have to be conveyed to

employees in a strategic manner. As such, the accuracy and clarity of the contents are regarded as

significant components of the strategic change messages. In relation to that, Armenakis et al. (1999)

propose two models of change management. The first model considers creating a message for change

readiness so that resistance is minimized. The other model is about facilitating the adoption and

institutionalization of desired change. Both models are associated with the notion of change messages as

depicted in Figure 4.

Figure 4: Five Components of the Change Messages

Components Descriptive Meaning

1. Discrepancy We need to change

2. Self Efficacy We have the capability to successfully change

3. Personal Valence It is in our best interest to change

4. Principal support Those affected are behind the change

5. Appropriateness The desired change is right for the focal organisation

Source: Adapted from Armenakis, A. A. & Bedeian, A. G. (1999). “Organizational Change: A Review of Theory and Research in the 1990s.” Journal of Management, vol. 25, iss. 3, p. 300.\

22

Jaffe et al. (1994)

DenialRefuse to accept changes as solutions

ResistancePostpone participation and implementation

ExplorationTest new behaviours with promised results

CommitmentAccept the proposed change

Isabella 1990

AnticipationAssemble the rumor about change

ConfirmationConfirm the rumor with reality

CulminationCompare pre and post change events

AftermathEvaluate the consequences of change


No matter how well change strategies are formulated, the implementation of change still accounts for

success. The substantial volume of evidence indicating change implementation failure has confirmed an

underlying reason why people are anxious about organizational change (Stickland, 1998; Cummings and

Worley, 1997). Perhaps, this seems to be consistent with the work of management consultant Rick

Maurer, President of Maurer & Associates. He addresses that only about one-third of major

reengineering efforts and 29 percent of mergers and acquisitions are successes in the United States

(McCune, 1999).

In another aspect, Lewis (2000a) denotes that some change implementers struggle with how to publicize

what they perceived as positive results of their programs. The implementers learn over time that the

success of the program depends, in large part, on the perception among employees that it is accomplished.

Spencer and Mountford (1997) point out that the gain from a well-managed change effort brings out

growth and prosperity to organizations and stakeholders. Among the outcomes that can be expected are:

1. Employees deliver or exceed target levels of performance on time and on budget.

2. Stakeholders remain loyal and new stakeholders are attracted.

3. Risks associated with change are eliminated or minimized.

4. The organization is left better able to change rapidly and effectively in the future.

As is evident from many of the studies reviewed, Armenakis and Bedeian (1999) posit that the

implementation models of Galpin (1996) and Judson (1991) are similar in concept and parallel to the

model of Kotter (1995), which is illustrated in Figure 5.

Figure 5: Eight Steps of Change Implementation for Change Agents

23


Source: Adapted from Kotter, J. (1995). “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review, vol. 73, iss. 2.

To recapitulate the importance of change formulation and implementation, words and actions are

indispensable to create images and meanings that will focus attention on the need for change, to establish

an environment receptive to change efforts, to communicate change messages and to encourage

participation in the strategies designed to achieve it (Witherspoon and Wohlert, 1996). The formulation

and implementation of change strategies could be perceived as a united entity and an ongoing process.

Framing the change targets with comprehensive schemes or meanings of change is of radical challenges

to overcoming the obstacle of organizational changes (Gilsdorf, 1998). On the ground of these facts, a

communication tends to be considered as a bloodstream that helps transmit the change messages

throughout both change formulation and implementation stages.

Establishing a sense of urgency by relating to potential crisis and opportunities facing the firm

Forming a powerful coalition of change – oriented individuals

Creating a vision to achieve the desired end- result

Communicating the vision through numerous channels of communication

Empowering others to change structures or policies in the way that will facilitate

Planning to publicise short term wins or successes so as to encourage change continuity

Consolidating improvements and changing some policies that are not associated with the vision

Institutionalising the new approaches by publicizing the firm’s success of changes

Phase I

Phase II

Phase III

Phase IV

Phase V

Phase VI

Phase VII

Phase VIII

24


2.2 Communication Strategy Theories

2.2.1 Fundamentals of Communication

Undoubtedly, communication proves to be of the most significant tools in social life and business

management. It also plays a pivotal role in collaboration of all human activities that link people together

and create relationships (Duncan and Moriarty, 1998). Moreover, in the organizational level, Barker and

Camarata (1998) assert that communication is embedded in every aspect of becoming an effective

organization and of continuing to be a learning organization. As such, organizational communication is

essentially viewed as the collective interactive process of generating and interpreting messages between

people within the organization through either directional (one-way) or bidirectional (two-way) manner of

communication (Stohl, 1995). For instance, the nature of hierarchical relationships with communication

patterns is examined in the research of Stohl (1995). It is found that a high bureaucratic organization

tends to shape its communication practices in a vertical formal way, such as a top-down chain of

command through written forms of communication, while personal interactions may not be well exposed.

Originally, Kreitner and Kinicki (1995: p. 368), quoted from Bowditch and Buono (1994), define

communication as “the exchange of information between a sender and a receiver, and the inference

(perception) of meaning between the individuals involved” so as to reach a common understanding

(George and Jones, 1998).

Recently, a description of communication theories has expanded to cover more of psychological and

cognitive aspects. In the literature of Weiss (2001) and Kreitner and Kinicki (1995), a perceptual model

of communication is basically elaborated from a traditional communication process model

(Schermerhorn, 1998; Baguley, 1994). In the perceptual model, the cognitive interpretation of messages

is focused by which the miscommunication becomes better understood (Kreitner and Kinicki, 1995).

According to the work of Kreitner and Kinicki (1995) in Figure 6, a perceptual model of communication

begins with a sender cognitively encodes an idea or thought by using verbal and non-verbal cues,

including attitudes. The output of encoding is a message transmitted on medium selected by the sender.

Then the receiver cognitively decodes that idea or thought based on his/her understanding and perception

toward the message. A message for feedback is created and transmitted on medium of the new sender

(receiver)’s choice. The process of communication tends to be completed after the original sender

interprets the message received and acts upon. Barriers of communication, such as loud noise, poor

handwriting, and inaccurate statistics in a memo, can distort the quality of the perceptual communication

process at any stages.

25


Figure 6: A Perceptual Model of Communication

Source: Kreitner, R. & Kinicki, A. (1995). “Organizational Behavior.” Third Edition. Irwin.

Source: Kreitner, R. & Kinicki, A. (1995). “Organizational Behavior” Third Edition. Irwin.

2.2.2 The Elements of Effective Communication Strategy

Effective communication is important for both managerial and organizational success (Dawson, 1996;

Kreitner and Kinicki, 1995). It can be witnessed from the viewpoint where employees collaborate,

interact, and engage with others in ways which help them understand the importance and meaning of the

engagement and achieve certain goals (Barker and Camarata, 1998; Pace and Faules, 1989). According

to the literature, the notion of effectiveness communication is not merely confined with an interactive

collaboration between employees, but it also has an impact on organizational issues. For instance,

Clampitt and Downs (1993) demonstrate a close link between effective communication and productivity.

Whereas Pettit et al. (1997) examine how effective organizational communication relates to job

performance and job satisfaction. Moreover, an empirical study shows that employees’ commitment to

the organization correlates positively with organizational clarity and is maintained even when changes are

occurring in the organization (Guzley, 1992). As such, the communication strategy can be perceived as a

mechanism to clarify the facts to various stakeholders of what is going to change, why, and what benefits

they can expect to derive from the change (See Appendix 2).

Source Decodes

Transmitted on medium

Message Encoding

Receiver Decodes

Transmitted on medium

MessageEncoding

Sender Receiver

creates meaning

Barrier (Noise)

Feedback Loop

26


Partially drawn from the marketing communication literature, the underlying philosophy of effective

communication strategy is held true and proves to be literally practical to other contexts. With this

regard, Mohr and Nevin (1990) define a communication strategy as the use of a combination of

communication facets, which include frequency and formality of communication (Maltz and Kohli, 1996;

Mohr and Nevin, 1990), and content of communication (Mohr and Nevin, 1990; Jablin et al., 1987), and

channel of communication (Carlson and Davis, 1998). For example, one communication strategy might

be frequent communication through informal modes, with indirect content. In the following section, each

facet of communication strategy will be elaborated as part of the key constructs for this study.

2.2.2.1 Frequency of Communication

Normally, dissemination frequency is measured as the number of dissemination events or the amount of

communication between a sender and a receiver during a given period of time or duration of contact

(Maltz, 2000; Maltz and Kohli, 1996; Mohr and Nevin, 1990). In assessing the frequency of

communication, one should examine the amount of contact necessary to achieve a particular activity, not

simply including the amount of contact per se. Because most empirical research has used frequency as

the indicator of the amount of communication, the author tends to adopt the frequency of communication

rather than the duration of contact.

Formality of Communication

Maltz and Kohli (1996: p. 48) comment that the dissemination formality has not been empirically

explored in the communication literature; though a number of researchers have noted that organizational

“intelligence may be disseminated through formal or informal channels.” Moreover, some scholars might

not explicitly define what is meant by formal and informal channels. Johnson et al. (1994) address the

issue of distinctive clarification between them. Formal communication basically refers to communication

that flows through written channels, though “formal” meetings or training sessions also may be

considered a formal mode. However, “informal” communication refers to the communication that occurs

in a non-structured manner, such as a normal conversation or social discussion.

The aforementioned definitions have been reiterated in the findings of the research work conducted by

Johnson et al. (1994). Such a project is studied in a large midwestern state governmental agency to

compare formal and informal organizational communication structures, specially focusing on salience,

channel factors, and channel usage.

27


2.2.2.3 Content of Communication

The content of communication refers to “the message that is transmitted – or what is said” (Mohr and

Nevin, 1990: p. 39). It can be verbal or non-verbal, intentional or unintentional. Shelby (1998) points out

that the content in the message is considered the central part of the communication. Furthermore, the

complexity of the language appeared in the message can determine the success or failure of the

communication effort (Anonymous, 2000). As such, simple words and clear structures of the context can

essentially overcome the complex issues.

In relation to that, Mohr and Nevin (1990) and Frazier and Summers (1984) attempt to distinguish

between direct and indirect influence strategies embedded in the exchanged information. Direct

communication strategies are designed to change behaviors of the target by implying or requesting the

specific action that the source wants the target to take. For instance, recommendations, requests and

appeals to legal obligations fall into this type of influence strategy. Whereas indirect communication

strategies are designed to change the target’s beliefs and attitudes about the desirability of the intended

behavior; no specific action is requested directly. An example of indirect communication content is

information exchange, whereby the source uses discussions on general business issues and operates

procedures to alter the target’s attitude about desirable behaviors.

Sengupta et al. (2000) address that the communication quality, which refers to the content of the

communication received and understood by the other party in the relationship, marks a desirable outcome

of communication. It also associates with the context of developing and maintaining personal

relationships. However, Shelby (1998) comments that “appropriate choices of channel communication”

are those most likely to result in communication effectiveness and efficiency – for both message senders

and receivers; they are those that provide perceived quality to communication process.

2.2.2.2 Channel of Communication

Channels of communication are regarded as the vessels of the message delivery (Anonymous, 2000).

According to the literature, they have been broadly discussed in the notion of the flow of information,

(Johnson et al.,1994) and information richness (Krietner and Kinicki, 1995). Editorial tone and

communication potentials are of important characteristics determining the flow of information (Johnson

et al.,1994). Basically, editorial tone mirrors an individual’s perception of the credibility and

trustworthiness of the source, which has an impact on the upward flow of information in the organisations

(Glauser, 1984). Whereas communication potential refers to “an individual’s perception of the manner in

which the information is presented.” (Johnson et al., 1994: p.114).

This is relating to the issues and of styles and comprehension of the documents, such as newsletters.

Information richness is the amount of information carried out between senders to receivers to reach a

28


common understanding (Carlson and Davis, 1998).

Media that are high in information richness are capable of transmitting more information and are more

likely to generate a common understanding than are media that are low in richness (George and Jones,

1998).

2.2.3 Issues of Communication for Change

Organizational scholars have long acknowledged the importance of communication processes in

explanations of organizational change processes (Lewis and Seibold, 1996; Rogers, 1995; Fairhurst and

Wendt, 1993). Nonetheless, Lewis (2000a) argues that the systematic research about the effectiveness of

communication strategies about change is scant. Carmichael (1996) supports Lewis’s argument by

depicting that academics and practitioners have tried to search for a complete, well-grounded definition of

communication for change, but their efforts primarily have focused on the invention, design, adoption,

and responses to planned organizational change, as well as outcomes of change efforts. In addition,

central communication processes involved in the implementation of planned changes within organizations

have received far less attention by communication scholars (Lewis, 2000a).

2.2.3.1 Impediments of Communication for Change

Communication problems are commonplace when changes are not clearly identified (Lewis, 2000b). Not

only do they cause a drain on profitability, but also the effectiveness of management declines (Gilsdorf,

1998). In the work of Dawson (1996: p. 192), many underlying reasons why communication often falls

short of the ideals, which are “accuracy, reliability, validity, adequacy, and effectiveness,” are addressed

with some general issues within the relationship between information and communication in

organizations. 2

According to Lewis (2000b)’s research findings, the most frequently noted categories of problem

encountered by the company in transition are “communicating vision” and “negative attitudes.” If an

organization’s management does not consider which communication behaviors it wishes to foster for its

success, the signals it sends to employees may be inconsistent or counterproductive. Thus, managers

should consider conveying clear communication-behavior expectations as a fundamental element of

strategy. In doing so, firms might pursue communication audits which involve ethnographic analysis,

including observation and interviewing, to learn exactly what organizational policies are operating

(Gilsdorf, 1998). Moreover, Gilsdorf moves on to argue that analysis of organizational culture should be

conducted in order to help determine the communication strategy used to solve the problem.

2.2.3.2 Formulation and Implementation of Communication for Change

29


At the outset of the business competition for the 21’st century, there is a trend of increasingly rapid

change in organizations. Viable communication counts for an increase in not only individual

receptiveness but also organizational change preparedness (Sinetar, 1988). It is axiomatic that good

communication has become an essential component in successful change (McGill, 1996). Because any

change schemes require ample communication to reduce confusion and to realign structural patterns to

support the new direction (Bolman and Deal, 1999), both formulation and implementation plans of

communication in change plays a crucial role in helping navigate change to the planned direction (Axley,

2000).

The formulation of communication change plans seems to be relatively scarce in academic research

journals. Since there is no clear distinction between the formulation and implementation planning in

principle, the formulation part is included into the notion of the implementation plan of communication

change. Tornatzky and Johnson (1982), quoted by Lewis (2000a: p. 193), define implementation as “the

translation of any tool or technique, process, or method of doing, from knowledge to practice.

It encompasses that range of activities which take place between “adoption” of a tool or technique

(defined as a decision to use the technology) and its stable incorporation into on-going organizational

practice.”

The importance of communication for change is not only informing, motivating and coordinating but also

managing employee expectations (Heracleous and Langham, 1996). Covin and Kilmann (1990) suggest

that it is critical to communicating information (e.g., mission statements and goal achievement status)

during change. They find that “failure to share information or to inform people adequately of what

changes are necessary and why they are necessary viewed as having a highly negative impact.” (p. 239)

Feedback gathering from employees, which is pertinent to implementation issues, serves a significant

evaluative function for organizational leaders. Additionally, it may be radical for managers to provide

channels and opportunities for employees to gather feedback about their own participation in change

programs (Lewis, 2000a). In relation to that, face-to-face communication in seeking employees’ views

and concerns is highly recommended (Heracleous and Langham, 1996). By the same token, Sinetar

(1988) suggests the informal communication program, which refers to a mechanism to help various

corporate stakeholders become comfortable with change and with the organization’s long-term goals, to

be extensively conducted so as to create mutual understandings among change agents and employees.

At the outset of the business competition for the 21’st century, there is a trend of increasingly rapid

change in organizations. Viable communication counts for an increase in not only individual

receptiveness but also organizational change preparedness (Sinetar, 1988). It is axiomatic that good

30


communication has become an essential component in successful change (McGill, 1996). Because any

change schemes require ample communication to reduce confusion and to realign structural patterns to

support the new direction (Bolman and Deal, 1999), both formulation and implementation plans of

communication in change plays a crucial role in helping navigate change to the planned direction (Axley,

2000).

The formulation of communication change plans seems to be relatively scarce in academic research

journals. Since there is no clear distinction between the formulation and implementation planning in

principle, the formulation part is included into the notion of the implementation plan of communication

change. Tornatzky and Johnson (1982), quoted by Lewis (2000a: p. 193), define implementation as “the

translation of any tool or technique, process, or method of doing, from knowledge to practice.

It encompasses that range of activities which take place between “adoption” of a tool or technique

(defined as a decision to use the technology) and its stable incorporation into on-going organizational

practice.”

The importance of communication for change is not only informing, motivating and coordinating but

also managing employee expectations (Heracleous and Langham, 1996). Covin and Kilmann (1990)

suggest that it is critical to communicating information (e.g., mission statements and goal achievement

status) during change. They find that “failure to share information or to inform people adequately of what

changes are necessary and why they are necessary viewed as having a highly negative impact.” (p. 239)

Feedback gathering from employees, which is pertinent to implementation issues, serves a significant

evaluative function for organizational leaders. Additionally, it may be radical for managers to provide

channels and opportunities for employees to gather feedback about their own participation in change

programs (Lewis, 2000a). In relation to that, face-to-face communication in seeking employees’ views

and concerns is highly recommended (Heracleous and Langham, 1996).

By the same token, Sinetar (1988) suggests the informal communication program, which refers to a

mechanism to help various corporate stakeholders become comfortable with change and with the

organization’s long-term goals, to be extensively conducted so as to create mutual understandings among

change agents and employees.

31


Chapter III

GODREJ

3.1 History

The Godrej Group is one of the oldest and most diversified firms in India. From a lock making company

in 1897 to a present day conglomerate – the transformation has been Phenomenal. It

provides us a rich insight into a company that successfully adapted to a dynamically changing

environment. Once synonymous with locks and safes today it has presence in FMCG, consumer

electronics, engineering, IT and other fields. Safely ensconced in the protective environment of the

license raj, the liberalization of 91 and the ensuing challenges from the MNCs provided yet another

stimulus for change. The company shed its image of a closely held family business and moved from a

family-owned family managed to family owned professionally managed organization. The movement

has been gradual and marked with a number of hindrances. This can be attributed to the organizational

inertia which tries to maintain the status quo.

The two major companies of Godrej group – Godrej & Boyce and Godrej Industries Limited, have sea

change of difference in organizational culture and focus areas. While, Godrej & Boyce continues to focus

on consumer, industrial and office equipment products, Godrej Industries Limited is more dynamic

and focuses on range of sectors including FMCG, retailing, food, IT, real estate, etc. It gives a

lot of independence to its affiliate companies and subsidiaries in decision-making. However, the control

of Godrej family exists with family members having full control or as board members in some of the

companies.

32


3.2 Overview

An average Indian starts the day with the use of Godrej soaps and Godrej shaving cream in the

morning, picks up clothes from a Godrej Almirah, sits on Godrej furniture in the office, drinks coffee from

the Godrej vending machines., eats Godrej food products, uses Godrej fax/conferencing equipment for

communication, puts money in Godrej safe, plugs Good Night and goes to sleep at the end of the day.

A recent estimate suggested that 400 million people across India use at least one Godrej product every

day. Godrej Group today is one of the largest diversified industrial corporations in India. It stands in a

strong position today, with annual sales in excess of US$ 1.7 billion, a workforce of approximately

20,000, and a strong diversified portfolio.

The saga of the success of Godrej group is a story which runs into about four generations. From

the humble beginning driven by honesty, integrity and outstanding service to customers now Godrej

is a huge empire, which has come all the way as being know as a lock making company for over more

than 100 years ago and is an epitome for success. This endeavor began in the last century with

Ardeshir Godrej starting at the grass roots level with the manufacture of locks. After mastering the

technology thoroughly he decided to manufacture locks, which could compete with locks imported from

foreign countries. From then on there has been no looking back. He along with his younger brother

Pirojsha went on to make security equipments of a high quality. They kicked off Godrej & Boyce and

successfully began the manufacture of toilet soaps from vegetable oils. Ardeshir moved from locks,

safes, soaps to biscuits and confectionery and canning and processing and Pirojsha focused on growing

businesses. They further diversified into cupboards and furniture. The next generation was dominated by

Naval who forayed into ventures like typewriters and refrigerators. The third generation led by Jamshyd,

took on the challenge as managing director of Godrej & Boyce and is carrying on its business.

33


3.2. 1 Timeline

o 1897 - Godrej & Boyce Mfg. Co. Ltd established

o 1918 - Godrej Soaps Limited incorporated

o 1961- Godrej Started Manufacturing Forklift Trucks in India

o 1971- Godrej Agrovet Limited began as an Animal Feeds division of Godrej Soaps

o 1974 - Veg oils division in Wadala, Mumbai acquired

o 1990 - Godrej Properties Limited, another subsidiary, established

o 1991 - Foods business started

o 1991 - Godrej Agrovet Limited incorporated

o 1994 - Transelektra Domestic Products acquired 1995 - Transelektra forged a strategic alliance with Sara Lee USA

o 1999 - Transelektra renamed Godrej Sara Lee Limited and incorporated Godrej InfoTech Ltd

o 2001 - Godrej Consumer Products was formed as a result of the demerger of Godrej Soaps Limited. Godrej Soaps renamed Godrej Industries Limited

o 2002 - Godrej Tea Limited set up

o 2003 - Entered the BPO solutions and services space with Godrej Global Solutions Limited

o 2004 - Godrej HiCare Limited set up to provide a Safe Healthy Environment to customers by providing professional pest management services

o 2006 - Foods business was merged with Godrej Tea and Godrej Tea renamed Godrej Beverages & Foods Limited

o 2007 - Godrej Beverages & Foods Limited formed a JV with The Hershey Company of North America and the company was renamed Godrej Hershey Foods & Beverages Limited

o 2008 - Godrej relaunched itself with new colorful logo and a fresh identity music

o 2010 - Godrej launched GoJiyo a free, browser based 3D virtual world

34


3.2.2 Companies in the Group

The spirit of entrepreneurship, the vision of a dynamic tomorrow, and the capacity to build and realize

dreams! This is the essence of the Godrej group. No wonder then, Godrej has become the symbol of a

vibrant multi-business enterprise touching the lives of millions and at the same time an icon of enduring

ideals in a changing world.

Godrej & Boyce

From locks to aerospace, furniture to construction, appliances to custom-built critical

equipment, and several more, Godrej & Boyce has a diverse range of products and services.

Godrej Industries

India's leading manufacturer of oleo chemicals making more than a hundred chemicals for use in over two

dozen industries. Its products also include edible oils, vanaspati and bakery fats.

Godrej Properties

One of India’s leading real estate development companies focusing on residential,

commercial and township development.

Godrej Consumer Products

A major player in the Indian FMCG market with leadership in personal care, hair care, household care

and fabric care segments.

Godrej Household Products

Godrej Household Products Limited (GHPL) is a wholly owned subsidiary of Godrej

Consumer Products Limited. With strong brands like Good Knight, HIT, Jet, Ambipur,

Brylcreem and Kiwi, GHPL is the market leader in the Indian household insecticides category and has a

dominant presence in the air care, shoe care and male hair care markets.

Godrej Hershey

A joint venture between the Hershey Company, USA and the Godrej group, it is one of India's leading

businesses operating in Food and Beverages segment.

Godrej Agrovet

It is Diversified agribusiness Company with interests in animal feed, oil, palm plantations, agro chemicals

and poultry. It is India’s largest animal feed company.

35


Other Companies

Godrej InfoTech

Godrej Efacec Automation & Robotics

Geometric

International Operations

3.2.3 Products and services

36

Appliances Agri

Furniture AV Solutions

FMCG Chemicals

Real Estate Construction

Electricals and Electronics Material Handling

IT & Software Solutions Motors

Locks Precision Engineering

Process Equipment Tooling

Security Solutions Vending

Storage SolutionsBatteries


3.3 Change Management and Strategies and Role of Communication in Godrej Industries

Indeed, since their inception 105 years ago, Godrej have consistently and constantly been agents of

change. It has only recently come to light, in papers unearthed after former Chairman Sohrab

Godrej’s death, that the pioneer-founder Ardeshir Godrej not only changed from law to surgical

instruments, to locks and safes and, in a startling departure, vegetable oil soaps, but also established,

and for some time successfully ran, a farm at Nasik, patterned along the lines of agricultural cooperatives

in Europe and America. Ardeshir saw the basic need and great potential for the processing and canning

industries in a country like India, which is the largest producer of fruit after Brazil and America and of

vegetables after China. Ardeshir didn’t live to see his vision come to fruition.

So, change is in the Godrej blood. Change is what has enabled Godrej to survive with a strong value

system and adapt itself to an even faster changing world. In an address on Management of Change to

the Indian Merchants’ Chamber in 1991, industrialist Harishankar Singhania described how the

technology of communication and travel had shrunk the world and how globalisation of production and

financial needs had promoted a closer integration of the economies of nations, making the world highly

interdependent. In this continual state of flux, "in a world which is becoming multi-polar economically

and tending towards uni-polarity politically," change is the only constant and the only resort for us is to

keep pace with it, not let it overtake us.

According to Singhania, there are three levels of response to change — at the national, the

industrial/organisational and the personal levels.

The so-called socialistic pattern of society, with its highly centralised planning process forced upon

reluctant industrialists in the first 45 years of Independence, severely curtailed their individual,

organisational and national freedom as well as the ability to respond rationally to change in any form and

at any level.At the level of industry/organisation, too, it was the same. Government policy created

a highly regulated industrial regime in which competition was conspicuous by its absence.

Insufficient attention was paid to the quality of goods and services. We lacked an outward orientation,

and the global stream passed us by.

37


But our most significant, most dangerous lack of response was at the individual level. Our national trait of

resting on past laurels (at one time we were the 10th highest industrial nation in the world), our chalta hai,

chalne do attitude, our belief in karma that all is ordained, and our lack of a work culture have

irretrievably damaged our present. The increasing lack of individual commitment, our lack of

identification with national goals and failures in personal integrity have reduced usto the status of a

development-striving but poverty-stricken nation.As J. Watson Wilson profoundly understood: "If you

dig deeply into any problem, you will get to ‘people’." We as "people" were the losers, yet "people"

remain our only hope.

Singhania aptly concluded: "Let us vow not to be the proverbial wheelbarrows, which go only as far as

they are pushed, but instead forge ahead like spaceships into the known and yet unexplored destinations

with a dynamism that is the need of the hour."

Godrej Industries and its associate companies have several initiatives in place with a view to improve

both corporate governance and stakeholder returns. Among the many initiatives are:

3.3.1 Initiatives

a) EVA- The Economic Value Added Principle

EVA, short for Economic Value Added, is a financial performance metric developed by the New York-

based consulting firm Stern Stewart & Company. In simple terms, EVA is the true measure of the

value created by a firm, calculated by taking into account the economic profits generated by the firm

and the cost of the resources used to achieve these profits.

Arithmetically, EVA is calculated by subtracting the cost of capital from a firm’s net operating profit after

tax (NOPAT). The EVA framework provides a comprehensive and integrated approach to value-

based management. Further, when integrated with the variable compensation philosophy of a firm, the

EVA framework provides an excellent tool to focus the entire management team’s attention and

energy to creating superior operational efficiencies and improving upon the same each year.

38


EVA was implemented at Godrej Industries and its associate companies in four phases from October

2000 to July 2001. All the major businesses were covered: Godrej Agrovet Ltd. (agribusiness), Godrej

Consumer Products Ltd. (FMCG: soaps and personal products), Godrej Industries Ltd. (Oleo-

chemicals), Godrej Properties & Investments Ltd. (Property development), Godrej Sara Lee Ltd. (FMCG:

household insecticides), and the newly acquired Gold Mohur Foods & Feeds Ltd. (agribusiness).EVA and

Performance-Linked Incentives. In the past (1996-2001), performance-linked bonuses at the Group

were a step function in which exceedingly superior performance went unrewarded and poor

performance went unrealized.

Along with the EVA framework, Godrej Industries and its associated companies implemented the EVA-

linked incentive plan. "Performance-Linked Variable Remu-neration" (PLVR) is our EVA-linked

incentive plan. It has no caps, no floors, and a deferred bonus "bank" to encourage long-term thinking and

owner-like behaviour. Under the PLVR plan, achieving target performance yields the target bonus while

exceeding the target bonus leads to additional rewards without any limit to the upside. Similarly, falling

short of the target bonus leads to an erosion of the bonus earned. Further, each year, a part of the bonus

earned by the employee is retained in a notional "bonus bank". Every subsequent year’s bonus paid

out comprises in part the bonus earned in that year and in part a portion of the bank. Thus, the "notional

bank" serves to smoothen out fluctuations in bonus payments which might otherwise occur due to

business cycles.

As with any change process, obtaining the buy-in of key managers and employees was important.

Initially there was skepticism about the "bonus banking" concept and the longer-horizon stretch targets.

Relentless communication and demonstrable results was the key to ensuring that the concept of EVA was

imbibed at all levels of the organisations.

Following EVA implementation, our operating performance has improved significantly. Between

the years 2001 and 2004, Return on Capital Employment has improved by 8 percentage points,

Sales have grown by 15 per cent per annum, and PBT has grown by 42 percent per annum. All the

businesses improved their performance, many of them well ahead of the stretched targets. In

2002, three of the five businesses achieved their respective EVA improvement targets. In 2003,

four out of six achieved their targets - and all had positive EVA improvements.

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To summarize, Godrej Industries Ltd. and its associate companies have been very successful in improving

their operating performance substantially by implementing the EVA framework. It certain that many

other companies can and will benefit in the near future by using the same principle as a management

tool. Between the years 2001 and 2004, Return on Capital Employment has improved by 8

percentage points, Sales have grown by 15 per cent per annum, and PBT has grown by 42 percent per

annum.

Benefits of EVA :

From the Management point of view:

§ Improvements in capital efficiency and operating profitability.

§ Greater focus on optimal capital structure.

§ Improved strategic and scenario planning.

§ More robust acquisition analysis tools.

From a Motivation point of view:

§ Longer-term focus.

§ Greater alignment in shareholders and employees interests.

§ In a recent Gallup employee satisfaction survey, about 80 per cent of Godrej Industries Ltd. and associate companies employees felt that EVA/PLVR (Performance-Linked Variable Remuneration) was the initiative that made the most difference.

b) The Think Tank: This team, comprising senior managers from across the Group, examines long-term

trends in technology, consumer behaviour, distribution, finance, etc., and makes strategic

recommendations to the Group Management Committee.

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c) The Young Executive Board: This team comprises managers under 32 years of age, who are assessed

to have high leadership potential and outstanding performance. Among other things, the YEB works on

strategy for the Group and gives advice to the top management on specific topics of interest, like Human

Resources, Corporate Governance, etc.

d) Red & Blue Teams: These teams, comprising managers from the respective businesses, are unique as

they form a part of the bottom-up strategic planning exercise for each of the businesses. The

recommendations of the Red & Blue Teams are distilled through the management committee and

pursued by the Plum Team.

e) Kaizen: The system has led to significant increase in employee involvement and morale.

Significant savings have also resulted. The organisation is becoming more flexible, with greater

capability to adapt to the rapidly changing needs of the environment.A reduction of over 70 per cent in

changeover time on the shop floor has been achieved in all Plants. Manufacturing has been able to meet

the changing needs of marketing with smaller lot sizes without losing economies of scale. Today, Godrej

enjoys one of the lowest changeover times in the industry. The quick response to marketing’s needs has

reduced finished products inventory by over 40 per cent maintaining the same service level. Introduction

of the first phase of Total Productive Operations has resulted in a continuous decline in the cost of spares

and repairs, to about 50 per cent of that at the introduction of the programme.

Through lower energy consumption, one of the two high pressure boilers in the Vikhroli Factory has now

become redundant. It was a result of hundreds of tiny improvements brought about by everybody in the

organisation. Reducing demands of energy for the same output has become a set pattern in the Company.

Value Analysis exercises has reduced costs of materials while enhancing the quality of output. This runs

into lakhs of rupees every month. Every month, thousands of improvements are occurring company-wide;

they extend to all spheres of activity including Finance, Marketing, and Personnel. An improvement-

oriented culture has set into the organisation with employees looking out for opportunities to make

improvements and savings.

f) Total Quality Management:

1995-96 : TQM Awareness programmes conducted for all employees across all cadres — from the

Chairman and Managing Director to the lowest grade worker.

The first 7 awareness programmes were conducted by Eicher Consultancy Services (ECS).

Train-the-Trainer concept was utilized for creating a pool of 60 ‘‘internal’’ trainers.

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1996-97: ‘‘Visioning’’ session held to select our 10 Corporate Shared Values;No more hand-holding by

ECS (consultant) required; TQM training and facilitation across the organisation done entirely by an

‘‘internal’’ team — TQM Centre created.

1997-98 : Initiation of 5S all across the organisation; Commencement of 5S Audits;Special focus on

integration of business strategy/plans and TQM;Tracking and compiling of monetary benefits from SGAs

initiated; Initiation of Task Forces; Employees start participating in QC Conventions held at various

locations.

1998-99: Introduction of the CII-EXIM Business Excellence Model; 20 employees undergo special

training as ‘‘Assessors’’ for the CII-EXIM BE Award. Kaizen Appreciation Forum held for the first time

to recognise and appreciate Star Kaizens from across the organisation; held regularly every quarter.

1999-00: Self-Assessment of all businesses conducted as per the CII-EXIM Business Excellence Model;

Strengths and Areas for Improvement listed for each of the 9 criteria in the Model.

2000-01: TQM Awareness programmes conducted for our business partners: Suppliers, C&F Agents,

Distributors, etc. TPM initiated at Pondy Factory (GSLL) and Valia Factory (GSL); Six Sigma initiated at

Pondy Factory.

2001-02: TPM initiated in almost all our major factories/units.

“Realizing this need, Godrej adopted Partnership 2000 as a further step, a fresh initiative to meet

the diverse needs of a wide variety of businesses across the Godrej organisation. In terms of

attracting, motivating and retaining talent while remaining focused on performance, it is one bolder step

on the long journey of forging partnerships with "people", who are our biggest asset. It involves a moving

away from a too closed supervisory attitude to a more open-minded, trusting one, the driving motto being

"Entrust and Empower".

Above all, quality continues to be the watchword. "Exceeding the expectations of the consumer" is for

Jamshyd one of the best definitions of quality he has come across: "Expectations are psychological and to

that extent Quality has a philosophical connotation … The challenge is not so much in reducing the defect

rates. It is in manufacturing, engineering, marketing and design with all the elements that describe a

product and how that is going to affect it in the market."

Jamshyd’s words take us back over a hundred years when, working in a lowly shed in the crowded

recesses of Lalbaug, young Ardeshir Godrej, lawyer turned talachaviwalla, devised a lock that provided

42


better value than all the locks then being made in the country — a lock that was unpickable, that didn’t

rust because its springs had been replaced by levers and that could be opened only by its own key. He was

the innovator. He set the trend. What was then becoming a household name was transformed by his

successors into a strong brand name.

Change Management in Godrej today is going to call for all Jamshyd’s reserves of personal fortitude. We

too, being empowered, have to join in for the rewards are rich — renewal, reinvigoration. All boils down

to Values (moral) and Value (business). It is not enough for the incumbent management to preserve and

cherish the values laid down by our forefathers who made Godrej a household name and then a strong

brand name — it has constantly to question itself as to what value it is adding for the Company’s growth

and development.” B.K. Karanjia

Pooja Saxena, Assistant Manager, Human Resources Department, makes a case for Riding on the Wings

of Change.

A leading management guru believes that there are two primary reasons for the failure of companies

today:

a) Inability to escape from past success and glory, and

b) Inability to invent/anticipate the future.

Both these causes can be attributed to a failure of leadership. It is leadership that drives change, and the

success or failure of a company depends on the direction of change and how it is managed.

As many a leader or "driver of change" will have found, commitment to and acceptance of

change seldom comes about as soon as it is introduced. Commitment to the process of change

follows from the experience of carrying it out or being a part of it. Commitment is the result of action.

The leadership must, however, have the capacity for tolerance and respect, as well as a spirit of adventure,

as these are essential for the growth of a social organisation.

3.3.2 Personal examination

First things first, they say…When we desire to transform a firm or organisation from one culture to

another, we must recognise that every change starts with personal transformation. A prerequisite for

this is personal examination, which starts with an in-depth exploration of personal beliefs,

unconscious assumptions, values regarding the nature of management, the organisation, purposes

of work and the effectiveness of technology. It also involves an examination of alternative visions of the

future. Effective leaders are motivated by an inner vision, purpose and mission. This is an authentic

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expression of their own being and not a persona they develop to prove to others that they are effective.

These individuals define themselves on the basis of "being" rather than "doing".

Everyone, from economists to psychologists, tries to understand change. Nowadays people also try to

measure change from the turbulence created in the atmosphere. However, exploring the nature of change

is not a new challenge. Just as change requires new ways of thinking, it also involves a rethinking of the

"architecture" of organisational structures and relationships.

We do not hear much any more about overcoming resistance to change, which 10 or 15 years ago was one

of the most popular topics of management books and management seminars. Everybody accepts that

change is unavoidable. But unless an organisation sees that its task is to lead change, that organisation —

whether a business, a university, or a hospital — will not survive. In a period of rapid structural change

the only organisations that survive are the "change leaders".

Organisational change has many sides to it. It is both subtle and dramatic: On the surface, many

organisations appear to be stable, unified and generally efficient in their day-to-day operations. Yet

beneath the cover, the effects of continuous change are creating new patterns and structures, changing the

way organisations define themselves and how they respond to customers, etc. Organisational change can

be planned or unplanned, formal or informal, directed or non -directed, fast or slow, conscious or

subconscious, negative or positive, visible or invisible.

3. 4 Organisational structure

At Godrej and its group companies, there seems to be clarity in the roles and responsibilities of

the employees from middle management to the blue collared workers because of the emphasis on

Standard Operating Procedures. However there is considerable amount of freedom given to each

employee to conceive and implement improvements (kaizen) continuously in the organization.

Organizational culture is also not same across the group companies as the very nature of each company

dictates its style of functioning. For instance, the manager-employee relation in a relatively new and

dynamic organization like Godrej Infotech might be very informal while in a traditional

manufacturing based company like Godrej & Boyce, the relation might be a more formal one.

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In an internal assessment, there exists a clear differentiation across various levels in the

organization with a hierarchy of authority and reporting relationships, the mechanism which Godrej

adopts and the employees. An overwhelmingly large number of respondents (97%) believed that

senior management is easily approachable, though, 40% believed that power distance does exist.

However information on the kind of interaction that happens between the middle management and the

grassroots level employees is not available to draw any judgments.

Owing to the divisionalisation of Godrej that happened in the 90s, organizational tasks have been grouped

into roles and similar roles have been grouped into functions. Each division of Godrej has functions to

take care of the core and support activities. Thus the horizontal differentiation of tasks is achieved in

Godrej and integrating these various functions in the group companies is done through Task forces

that encourage Kaizen practices across Godrej to mitigate this differentiation is by informal

interactions between the top management

3.4.1 Culture

The influence of family-controlled business can be seen on the organizational culture. The mission and

vision statements are clearly defined for the group companies and the family and the senior management

adheres to it.

Vision: Godrej in Every Home and Workplace

Mission: Enriching Quality of Life Everyday Everywhere

Values: Integrity, Trust, To Serve Respect, Environment

About 85% of the respondents rated Godrej above average and above in terms of adherence to

the mission and vision statements. However, 43% of the respondents believed that family control has

reduced dynamism to an extent and that Godrej has not utilized its resources and assets fully. Godrej‘s

recent foray as Godrej Properties is a step towards capitalizing its vast land assets.

3.4.2 HR Practices

The family control has led to greater employee care and employee-friendly work practices at

Godrej (74% of the respondents favored). HR practices followed in Godrej are considered amongst the

best in the industry because of which they have been ranked amongst the Top 20 in the 'Great Places

to Work' in a study conducted by the Grow Talent Company in partnership with the Great Places to Work

Institute, Inc, USA and Business World. Godrej was also honoured with the Best Managed

Workforce Award from Hewitt Associated-CNBC-TV18. People Practices at Godrej are guided by six

strong, well defined principles:

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1. Strong values which have helped in setting high standards of ethics at work place. They form the key

principles of behaviour and belongingness which form the core of any culture that prevails in a company.

There is no compromise of any kind on this front come what may. Every employee joining the company

has to sign a code of conduct which helps in creating awareness about the rules and regulations that are

to be abided by in day to day work. They believe in the policy that ―economic success goes hand

in hand with ethical responsibility‖. Approximately, 66%/24% of the respondents rated Godrej having

excellent/good ethical practices, respectively.

2. Providing employees a wide scope and platform to perform. The diverse portfolio of products and

verticals provide the employees with an opportunity to work across businesses and functions within

the company giving them a great deal of exposure in the business. People are trained to perform multiple

tasks and leaders are developed internally (75% of the respondents favoured).

3. Speed and flexibility in decision making empowering people on the job – A conducive environment to

grow faster, thrive better and succeed together. This has motivated employees to perform better and

deliver faster (63% of the respondents favoured).

4. Freedom and autonomy at work and freedom to promptly recognize and reward performance.

A powerful tool that motivates people to give their best is to link a substantial part of their

compensation to a robust financial measure like Economic Value Added. This incites them to

outperform their expectations as long as they are within the value standards.

5. A specialized ambience at work to thrive. A very competitive work force, professionally

managed entity recruiting talent from top B-schools building professional leaders. Three pronged

strategy followed

a. Set stretch goals

b. Help achieve them by providing development inputs and coaching

c. Recognize achievement through rewards

6. Creating an organization that advocates learning amongst its employees. Feedback from employees is

taken in multiple ways to get an idea about the kind of perception. Know Your Consumer Programs,

internal customer satisfaction surveys, Voice-of-the-Employee Program and 360 degree feedback

programs are some of them. Employees have the flexibility to draft their own development plans and

take them forward after consulting with the seniors. It has defined performance tools.

The group has defined performance tools and processes, which reward top performers disproportionately

and identify weak performers. It offers performance-based variable remuneration, which is dependent on

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EVA of the group. This is essentially a policy of participative management, which instils a sense of

responsibility, accountability and also the ability to take calculated risk in the interest of the

organization, in the employees. The group gives adequate support to the employees’ ideas and say in the

functioning of the organization. Approximately, 67% of the respondents rated Godrej, good and above, in

terms of, support by senior management to the ideas of the employees. However, strategic

decision making lies with the senior management (39% favoured), who get adequate support by the

family (28% favoured) and involves middle-level managers as well.

The learning culture at Godrej is based on a conservative, innovative and risk-free approach. This

can be interpreted, to an extent, as due to the influence of strong initial family control, which defined the

boundaries for the employees. Approximately, 42% of the respondents favoured it as conservative and

37% as innovative and minimal support to the risk taking approach. The group has well defined formal

training procedures, with a focus on on-the-job training. It also has continuous training programs to

hone the competencies and skills of the employees, for instance, through the concept of "GOLD" - the

Godrej Organization for Learning and Development. It helps employees acquire new skills as well as

hone existing skills and strengths. The talent management process at Godrej identifies talented and

passionate people from diverse backgrounds, take them on board and later help them shape their careers.

GCPL has an employee development programme – IDLE (Internal Development of Leaders) through

which it provides MBA education to its talented employees through a tie-up with Symbiosis.

The attrition issue at Godrej has increased in the last few years, due to more opportunities and desire for

higher education. Godrej has taken measures, such as funding the higher education of the employees to

contain the attrition rate to an extent.

Godrej has taken various initiatives for care of its employee and their families. It was one of the early

adopters of employee welfare schemes, such as holiday benefit, provident fund, bonus, gratuity and

medical and food facilities. Some of the other steps include the following:

o Listening, Sharing, Inspiring Employees by using various channels to ensure there is ample

communication across and within teams and the hierarchy. Chairman‘s Tea, voice of the

employee and induction programs are some of them.

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o Enlightened Employment Policies encompass strict code of conduct, such as non

discrimination and whistle blowing and adherence to safety, health and environment standards.

o Balancing Work & Life by flexi - time working wherever operationally possible, company

buses at regular intervals too help reduce commuting stress

Godrej was steeped in traditional values because of the nature of family business. The result was that the

organization was conservative. The group could not avoid bureaucracy due to presence of family

members at the power centers (as board members or at the senior management). Approximately,

49% of the respondents believed the organization to be bureaucratic. Ironically, this goes against the

believed perception of family-run businesses as having lesser bureaucracy. Perhaps, it is the scale

of Godrej group‘s operations, which is responsible for bureaucratic culture.

Therefore, even though the family orientated work culture has been fairly successful in winning loyalty

and trust of employees, there has been instances of conflicts between family and employees. There are

two specific instances to quote, which occurred in 1972 and 1979, when due to aggressive clashes

between labour and the family, Naval Godrej and his daughter-in-law and mother-in-law were stabbed.

This incident eventually led to the death of Naval Godrej.

Some conflicts are necessary for any organization so as to increase its effectiveness and bring

some change. The birth of GCPL from Godrej Soaps Ltd., was a successful consequence of the initial

conflicts, giving the shape to what Godrej Industries Limited is today. Godrej Industries Limited managed

by Adi Godrej has a very dynamic and open culture and has ventured into diverse sectors. However,

Godrej & Boyce continued to follow a conservative attitude and was content with moderate growth rates

(of 30%) and was relegated to an also ran from market leader in many segments like appliances,

home and office furniture and fast moving consumer goods.

It is not sure whether this cautious approach was by design or whether it is the inertia of the pre-

liberalization era that still exists in the system, but it created a lot of frustration in youngsters who were

yearning for part of the action in the markets. A large part of the management trainees who joined in the

nineties have quit the company.

Instances of innovation have been few and far that Godrej has never been identified with innovative

practices. Kaizen has attempted to change that mindset but it has primarily been aiming at improving

existing processes rather than innovation. In fact, Kaizen was implemented in a very traditional manner

and could not attract employees’ interest. The strict adherence to rules and meetings created

psychological pressure losing interest of some of the employees. Godrej had been very slow in adapting

to the uncertainty in the market owing to the mechanistic nature of the organization and it clearly shows

48


in the market share of its various traditional businesses when compared with the leadership

position earlier it used to command. Approximately, 66% of the respondents rated Godrej as average

and below it in terms of innovativeness.

The focus on innovativeness is more in GIL as compared to Godrej & Boyce. GIL introduced the

concept of ‘blue’ and ‘red’ team, which worked independently to formulate Godrej‘s future strategies.

The results of their exercise had to be evaluated by a ‘plum’ team, comprising the top management. It

was an innovative concept empowering the employees and providing good quality of work. In

fact, they also invited management guru, Prof. C.K. Prahalad, for addressing the teams and guiding them

on the approach they could follow. The results of this exercise are awaited and it would be

difficult to comment at this time.

3.4.3 Steady transformation

Organisations have always been wary of drastic change. Taking an organisation through the change

process, with the help of experts and at a steady pace, gives employees the necessary momentum and

prepares them for the future. That was how Godrej & Co. was salvaged.

Organisations have always viewed change with trepidation. Change usually involves uncertainties.

Employees are reluctant to make any drastic changes as they find their routine comfortable. So,

organisations either force the change on them or avoid making any serious changes.

However, certain organisations take a middle road. These organisations implement the change at a steady

pace, based on the pulse of the employees.

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3.5 Structural Changes

Godrej has since 1990 deliberately undertaken a process of self-improvement. The main problem faced

by the group in 1991 was that it was getting too bureaucratic with slow pace, getting bogged down in

routine matters, too many slow-moving products and a reluctance to do away with old practices.

The key to break this shackle, Godrej realized is that to make everybody accountable and responsive.

Godrej went all out into incorporating corporate governance in all its subsidiaries and group companies

(both listed and unlisted). Each group company had a CEO or a President (not necessarily

from the family). Full freedom was given to these leaders to devise strategy for the companies and lead

Godrej in the liberalized and open economy. However the board of each company still has some family

members to oversee the working of the top management and the company and there is consultation at

both family and business levels on critical issues.

This change led to the concept of divisionalisation with each division as a profit centre, decentralization

of decision-making and empowerment of managers at the grassroots level, and Quality the watchword.

There was a realization on the part of Godrej that for all their successes in the past, they still fell short of

a world class organization and they had to make up for it. Along with implementing innovative

techniques like TQM for technology, product and process improvement there was a compelling

need to ensure that a balance was maintained between new ideas and enduring wisdom

gathered through the century old experiences, especially on the human side by preserving the

traditional bonds of trust which the owner-top management had always enjoyed with employees at all

levels.

3.6 Product Changes

In the washing machines segment Godrej is catering to all pockets as they manufacture semi- automatic

and fully automatic. In the fully automatic category, Godrej has both front load and top load models with

14 variants of Allure, Enchant etc series having capacity ranging from 5 kg to 7 kg.

The latest washing machine Ergoz, having a capacity of 5.5 kg and 5 kg has a unique tilt open drum

design. This design has been specially created for the comfort and convenience of the users and helpful

for those with back or knee problems. All models have different advancedfeatures like air clean

programme, ozone clean technology, turbulator, fuzzy logic, u sonic technology to name a few.

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In the world of home appliances there is more than enough choice for consumers today, with more and

more new brands entering the market every day. However, one brand that has successfully built and

maintained consumer trust for decades is Godrej. Manufacturing different products, right from

washing machines to refrigerators, from microwaves to air conditioners and now, furniture, Godrej has

proved to be a reliable company in every field.

In the refrigerator market, Godrej isn't a new player and it has a vast collection of refrigerators. It has

been manufacturing refrigerators since 1958. Revamping the cooling technology with PUF, launching

100% CFC free refrigerators, coming up with the Godrej Pentacool with five sides cooling in and Penta-

fresh Technology are all examples of Godrej's style of working. The latest series Eon that has been

recently launched has a got a large number of new and innovative features such as cool shower

technology, swivel shelf, integrated ice hangers, tinted shelves, anti – B technology.

All new semi-automatic washing machines from Godrej, GDS 950, have all the features that one needs.

This machine with 8.5 KG wash capacity is designed with HexaScrub and Pulse4 technology. While,

HexaScrub is a useful blend of powerful pulsator and six micro scrubbers, the Pulse4 refers to the

powerful central pulsator supported by three roto wheels Latest fully-automatic washing

machines from Godrej are equipped with DAC (Dynamic Aqua-Power control) technology. This feature

of the machine is used for controlling the water flow and power cuts. Machine goes into the sleep mode

and resumes its operations whenever supply of water or power restores. In Microwaves, Godrej

uses the latest technology, Microsteam, which helps in keeping all the nutrients of the food intact.

This feature reduces the fat content and makes the food almost fat-free and also helps it.

Godrej soaps: Evita is first launched in 1990’s and later relaunched as age control soap. Godrej soaps

include Cinthol, Evita, Fresco, vigil, Ganga, Fay, Crowning glory, Shikakai, Fairglow, No.1. In 2007

Godrej launched Vigil.

3. 7 Segment changes

Godrej Interio has started designs for young and fun loving customers. They were concentrating on

slightly aged people till date but now they were into new designs.

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3.8 Technology changes

The Godrej story began in 1897 with the manufacture of Locks. Since then, Godrej Locks has set several

benchmarks in the locks industry – from the first spring-less lock in 1907 to the iconic 'NavTal' in 1954 to

the Ultra range in 1995 to the revolutionary 3KS in 2007. The security levels are divided into 5 by Godrej

and by all means, Level 2 locks (at the most level 3) should be the best suited one’s for the doors in the

households. The locks under Level 2 (commonly referred as Godrej Ultra locks) are further divided in

various types such as Ultra Padlocks, Ultra furniture locks, Ultra Rim, Ultra Mortise, Cylindrical locks

and Ultra shutter locks. Among the Level 2 locks, the Ultra Rim type is the most widely used lock which

further has different variations like Ultra Vertibolt, Ultra Nightlatch, Ultra Retrofit Adaptor, Ultra

Latchbolt, Ultra Twin bolt and Ultra Tribolt. All level 2 keys use the Dimple key technology which

provides 10 crore key combinations making extremely difficult (read impossible) to duplicate

the dimples. Level 3 keys are the upgraded version of Level 2 Ultra keys, which beside being easy

to install and upgrade, provide almost 200 crore key combinations.

Refrigerator technologies: Silver shower technology, Anti- B technology, SIF technology, ZOP

technology,

Air conditioners technologies: Gold fin technology, Blue fin technology,

Packaging change: packaging soap is changed for Cinthol soap

Logo change: It changed its logo in 2008.

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3. 9 Organisational Strategies

Godrej group has been active in and outside India in its history of last 100 years. Its progress

has been shaped by number of political and socio-economic changes in India during the same period. The

strategic decisions are driven by the senior management, with the support of the board members of Godrej

family. Some of the salient features of Godrej‘s strategy are the following;

R-Strategy (Blue Ocean Strategy)

Godrej has been a pioneer in number of sectors in India. It has been maintaining its leadership in

security products division since the starting of its operations. The second and third generation of

Godrej family continued to follow the strategy of entering into uncharted territories of its founders.

Godrej enjoyed first mover advantage in most of its ventures, as it directly touched the masses and

endeavored to improve their quality of life.

o Introduced first lock with lever technology – Anchor brand

o Introduced first Indian safe in 1902

o First company to manufacture soaps from Vegetable oil in 1930, which was later followed

by other FMCG players. It manufactured Alpha Olefins from Olechemicals instead of from

Petrochemicals.

o Introduced mechanical typewriters in India in 1955 and electronic typewriters in 1985.

o First organized business house to enter into the material storage solutions in 1956.

o First Indian company to manufacture refrigerators in 1958.

o First to introduce Poly Urethane Technology in India in 1957

o First company in India to manufacture high pressure doors for Marine applications.

o Its brands in the insecticide market – Good Night, Hit and Jet are one of most well

established/organized brands in this sector.

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Unrelated Diversification

Godrej was synonymous with locks for a long time. The lock making business has evolved to a security

products division with products, such as Electronic safetylocks, specialized locks (for example, for

Nuclear Reactors, Marine applications), ATM safes in the market.

The company started to manufacture steel cupboard and cabinets in 1923. It forayed into consumer

appliances sector by manufacturing of refrigerators and microwave ovens, material handling equipment

division by manufacturing of forklift trucks, precision components division by manufacturing of

satellite components, rocket liquid propulsion engine, cryogenic engines. Some of the other sectors in

which Godrej has its operators are life sciences (tissue culture), Life Insurance, Real Estate,

Telecommunications and Medical Diagnostics. Godrej‘s strategy of unrelated diversification is more

prominent in later generations. Essentially, this follows the trend in family-run businesses in India,

such as Dabur, Wadia and Murugappa group, which did not diversify during the control by initial

generations. The factors responsible were restricted Indian economy during the pre-independence times.

The support from government increased during the later generations helped the firms diversify

into unrelated sectors. Unlike Murugappa, Kirloskar and Dabur families which have consolidated in the

last few years, Godrej has adopted an inorganic growth strategy.

Researchers have averred that the strategy of former set of families has been driven by decision-

making through consensus, whereas for Godrej it has been by risk minimization and preservation of

wealth with family keeping a trusteeship role. Godrej acquired Transelaktra to increase its presence in

mosquito repellant market. GCPL made a successful acquisition of Keyline Brands Limited, a

prestigious name in the UK, increasing its international brands portfolio with a total of seven

international brands. It also made a recent acquisition of Rapidol South Africa increasing its market

share to 80% in South African ethnic hair color market.

Some internal restructuring has been taking place as well. Due to independent decision making of various

subsidiaries, this has been referred to as acquisition. For instance, the recent transfer of Godrej Global

Mideast FZE from Godrej International to GCPL is a step in this direction. Godrej properties is also

planning to enter into a joint venture with Godrej Agrovet to develop the land owned by them.

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Globalization Strategy

During the pre-independence period Godrej‘s operations were focused in India. After independence it

started to expand its operations across diverse fields across different geographies. With the

economy opening-up in 1991, it entered into alliances with international players. Almost all the

Godrej groups of companies have alliances with top Multi-national companies for learning from their

best practices in local geographies

Godrej‘s clientele is impressive including institutions, such as BARC, ISRO, Indian Air Force,

Navy, HAL, Indian Parliament and MNCs, such as Hitachi, Reliance, Conoco Philips, Bechtel,

Valero, MOOG, Ion America Lab. The group has 20% revenues from operations outside India and it aims

to increase it to 30% within next 10 years. As per Adi Godrej,

"For us globalization is beyond exports and imports. We have manufacturing facilities abroad in

countries such as Malaysia, Vietnam, South Africa and the U.K. We will globalize in select

businesses where we have the global size and competitive advantage such as Office Equipment, Hair Care

and Household Insecticide. 'Godrej' is an umbrella brand for us and we have decided to invest in long

term brand accretion".

Functional Strategy

Godrej leverages its efficient processes in providing products of low cost and high quality to the

customers. Godrej Soaps (parent company of GCPL) initiated Total Quality Management (TQM)

by implementation of Kaizen in March 1991. At that time, many organizations embarked on ISO

9000 standard as a benchmark for quality improvements. However, it did not cover employee

management and did not reduce operational costs. Godrej Soaps, having identified this issue, switched

to Kaizen. By 2001-02, the success of Kaizen at Godrej Soaps was implemented across all the

factories. GCPL is working to optimize its inventory levels at the distributor and retailer by switching to

an inventory management system based on a Collaborative Planning,

Forecasting and Replenishment (CPFaR) model instead of forecasting and push model. The system,

having implemented, is expected to reduce the inventory levels by 3-4 days. In this manner, Godrej

continues to emphasize the importance of dealers/suppliers in its operations. The image and Godrej brand

has been instrumental in winning suppliers’ trust. Approximately, 74% of the respondents believed that

the family control has led to strong relations with the suppliers and customers, as well.

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Other measures of cost minimization include setting up manufacturing facilities in low tax areas, such as

Baddi in Himachal Pradesh and in Assam. Godrej Soaps used the ERP solution– MFG-PRO in 1998

and then SAP to improve its distributor management process. The system integrated suppliers,

distributors and customers and reduced the lead times. Godrej & Boyce implemented the balanced

score card in 1998 and has achieved operational efficiencies by using it. The lock division of

Godrej & Boyce commercialized the computer-coded dimple-key lock, a feat that has been achieved by a

very few manufacturers worldwide. Godrej has taken advantage of its efficient processes by offering

consumer products specific to medium-income to low-income segments (though it also targets

premium segment). It offers a range of products, with most of the products sold for the common mass.

However, it has not been able to successfully target premium class and has been able to attract the

medium and low income groups. Godrej No 1 is the largest selling toilet soap in the country. The

percentage share of revenue from Soaps segment has reduced as GCPL is focusing more on hair

color and toiletries market in India. This segment is high growth segment having low penetration

markets in India fetching high margin to Godrej. GCPL is focusing on mass market for selling hair color

products. It launched ―Godrej Fashion Hair Colour‖ in sachets of different hair colors costing Rs 10 for

mass market affordability.

Current Positioning

Beginning its journey as a security equipment and soaps company, the Godrej Group has today

diversified into a variety of consumer goods and services sectors. Its entry into new businesses has been

on the back of the sturdy and trusted Godrej brand.

Ashutosh Tiwari, Executive Vice President - Strategic Marketing, Godrej, elaborated, “Godrej is

one of foremost consumer brands in the country for the last 100-plus years, used by 470 million

Indians, with a scope straddling almost 70 per cent of household consumption. Over a period of time,

there was a need felt for the brand to re-energise its bond with a new, optimistic, resurgent India. The

brand adopted a new positioning of ‘Brighter Living’ on the bulwark of core consumer insights anchored

in the territories of freedom, optimism, progress and expression. Thus, there is a need to re-launch the

brand with a new synergistic identity and a cohesive and clear set of values capable of taking the Godrej

brand forward.”

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Tiwari further said, “The journey since then can be divided into three phases: re-launch,

acquisition of new values and acquisition of new franchise. In Phase I, brand Godrej was re-

launched in 2008 in order to communicate the new brand positioning and identity. We initiated the

process of having a coherent portfolio under one Godrej. This was accomplished through the launch

campaign, ‘Good Morning Wall’, which successfully delivered the first step towards changing the

perspective of millions of Indians towards Godrej coinciding with the first season of IPL. This

was the first time that the Godrej master-brand was communicating with its consumers above the

margins of its category portfolio.”

“Phase II saw Godrej work relentlessly towards evolving beyond its traditional brand value of trust

towards new vistas of expression, progression, experience and empathy. This was accompanied by a

slew of initiatives to communicate the change in positioning and identity of various parts of the

portfolio. The first major communication initiative of Phase II was the Godrej Aerospace

campaign, which gave an unprecedented technological sheen to Godrej and helping it resonate with

values of progression and empathy. The second big communication initiative of this phase was production

and launch of India’s first branded lifestyle game show:

‘Godrej Khelo Jeeto Jiyo’, a unique concept showcasing the Godrej range of products wired into a

singular proposition of Godrej Lifestyle. After a long time, Godrej started becoming bigger than the sum

of its parts. The results were stupendous. Godrej started vaulting ahead on expression and experience

too,” he added.

Phase III has just started with the launch of GoJiyo.com, said to be India’s first virtual world. GoJiyo

brings together the power of social networking, virtual worlds and gaming on a simple, developing

country friendly browser based platform.

“Godrej has always believed in going beyond tag lines to imbuing all its communication

endeavours with aunique ethos and essence. The essence that guides us has always been

‘Brighter Living’, though it has manifested itself in a myriad different ways depending on the

communication vehicle used. Thus, ‘Enjoy a brighter Godrej’ or ‘Khelo, Jeeto, Jiyo’ or even ‘Explore,

Experience, Enjoy’, and so on,” Tiwari added.

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The Agency’s Take

Dhunji Wadia, Managing Partner, JWT Mumbai, observed, “Charles Darwin had said: ‘It is not the

strongest of the species that survive, nor the most intelligent, but the one most responsive to

change’. Godrej, a brand trusted and loved by generations of Indians and used by 470 million Indians,

started being perceived as a good heritage brand, ‘but not for me’. It was looked upon as a ‘dated brand’

that the younger generation could not connect with. Thus, there was a need to re-launch the brand and to

build a cohesive and clear set of values that would take the Godrej brand forward.”

Reiterating what Tiwari had said, Wadia added, “Godrej’s journey since then can be divided into 3

phases: Re-launch, Acquisition of new values, Acquisition of new franchise. The launch campaign,

‘Good Morning Wall’, announced Godrej’s new identity and vision of ‘Brighter Living’. It successfull

delivered the first step towards changing the perspective of millions of Indians. Phase II saw Godrej work

relentlessly towards evolving beyond its traditional brand value of trust towards new vistas of expression,

progression, and experience and empathy.

This was accompanied by a slew of initiatives to communicate the change in positioning and identity of

various parts of the portfolio.”

Sonal Saxena, Associate Vice President and Client Services Director, JWT Mumbai, said, “While

individual Godrej portfolio brands have used brand ambassadors for their campaigns, Godrej has

never had a brand ambassador to support its corporate advertising and communication. Since the

re-launch in 2008, all communication done has worked towards strengthening the brands’ ‘Brighter

living’ philosophy. After launching Godrej’s new identity during IPL 2008, the next step was to

strengthen and communicate its technological and innovation edge. Godrej has continuously innovated in

technology. The best proof of this is in their mastery of aerospace technology, where Godrej is one of the

best placed Indian companies.

Godrej is a mission critical partner to ISRO for India’s space programme. This mastery has led to

technology innovation and upgradation across many categories that Godrej is present in. Some of

these innovations are in products formulation others are in the processes used to create these

products. The campaign was developed to help all Godrej businesses benefit from association with

aerospace technology.”

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“The ‘Aerospace campaign’ was launched during IPL 2009. The message communicated was simple –

“The learning from space technology helps Godrej produce products which are superior in

nature”. Almost in parallel, Godrej helped co-produce an advertiser-funded TV property called ‘Godrej

Khelo Jeeto Jiyo’ – India’s first lifestyle show.

Through this show, Godrej showcased the various household and lifestyle products in its portfolio. The

grand prize was a ‘house’ from Godrej Properties. This TV property was extremely successfuland

helped Godrej connect strongly with its existing core franchise. While the above helped up the brand’s

levers in terms of empathy and technology, there was still the need to expand franchise - to reach out to

the optimistic, urban youth in India,” Saxena added.

Onlooker’s perspective

KV Sridhar, NCD, Leo Burnett, said, “I remember the Godrej from the Storewell days, when it used to

given to every girl as part of her wedding gifts. There were a powerful set of TV campaigns that made

millions of people connect with safety and almirahs. TV commercials changed from the earlier stance

and now it is a highly emotional brand. Godrej was one of the first brands to get into sponsored

programmes. They are one of early adapters on TV. Now, they are trying to modernize themselves. The

turning point was when people started bonding with Godrej emotionally in TV commercials. They have

tremendous equity. After Tatas, it is only the Godrej brand that people buy in an unconditional way.

Now, they are targeting the new age audience.”

Key Strength of Godrej Group

We believe that the core strength of the Godrej Group is its value system put in place by the founders and has been nurtured all along. The strong relationships with stakeholders – suppliers, dealers, employees, customers, have established Godrej brand in the market and increased loyalty. Some other factors nurtured on the values are as follows:

o Brand name – very loyal customer base, brand associated with durability and quality (especially

due to the products like steel cupboards, locks, steel furniture, safes)

o National presence – The group has been able to establish itself in virtually every district

of India through a network of dealers, distributors and branches reducing marketing costs tremendously. The trade is nurtured meticulously using a multi-tier approach (local/regional/national contact). The trade partnership sometimes runs into the second generation also.

o People – most valuable asset

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o Relationships – nurtured with dealers and suppliers – drives down traditional marketing

costs

o Financial strength – ability to take up large projects through internal funding

o Resources – land, machinery, technology, competent management teams, social goodwill

3.10 Some Observations

o The family control has ensured that the vision and values of the founders are adhered to

by all the Godrej group of companies. This has set clear goals and objectives for the

employees giving a direction to the growth in interest of family vision and values. As the

group companies have common objectives in the interest of the group, it has reduced agency

costs giving it an advantage over its competitors. The family influence has enabled the group

companies to survive and grow even during adverse external conditions. It is believed that

family-run businesses less respond to economic cycles and have lower cost of capital.

o A resources based analysis of the Godrej group indicates that it is extremely rich in resources of

different types – tangible resources, such as manpower, machinery, technological expertise,

land, and intangible resources, such as brand, customer and supplier loyalty and acquired

knowledge. This is due to the scale of operations of Godrej, and has increased complexity with

time. Some of the long-term goals include investment in quality, infrastructure and enduring

relationship with the employees. Godrej also has had a typically higher duration of tenure of the

family members. This has helped them invest in long term benefits and also invest in next

generation leaders.

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o The decision-making in a family-run business can also have emotional implications based on the

relationships between family members controlling the organizations. The success of such

organizations depends upon the behavior of family members. Many a times, conflict within

the family members, may lead to the downfall of the companies, though sometimes the

companies have emerged stronger as well. Nevertheless, it is always accompanied from

resentment of the employees. With some of the divisions, such as appliances division, which are

still facing the losses due to relaxed attitude of the Godrej, the group might have problems

deciding the fate of the division. There could be a lot of exit barriers that prevail like the family

culture and control, goodwill in the market social and psychological barriers, such as emotional

attachments of family members.

o There should be proper succession plan in place in family-run businesses, so as to maintain the

family control. This requires producing competent leaders capable of continuing the growth

of groups. Godrej has been following a succession plan wherein the younger generation of the

family are groomed under the guidance of the senior family members and outside professionals.

This is important to ensure that there is no crisis for power between professionals and

family members and only competent people reach the helm. In many families, for instance

in Reliance, the family members did their higher education from premier institutions of the

world, such as Kellogg‘s (Mukesh and Anil), which provided them a higher pedestal in

the hierarchical structure of their family business.

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CHAPTER IV

Discussion

Much of the findings in Chapter Four are attributed to the applications of the business phenomenon, reflecting a pragmatic dimension to which the company appeals. In spite of the significant progress that has been made with respect to both the literature reviews of theories and the case findings of Godrej Group, a disparity between these two aspects remains for discussion. This chapter aims to demonstrate a broader context of how the change management process tends to be practically viewed in relation to the integrative communication strategies.

4.1 Practical Views of Change Management

4.1.1 The Nature of Change Patterns

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In general, numerous change mode literatures suggested in past studies stem from more or less similar

grounds of change patterns, which refer to phases or steps in developing the change configuration. From

the findings, the major phases of change formulation appear to be consistent with Andersen Consulting’s

Organizational Change Model or AC Change Model (Figure 1) in principle. The diagnosis of the external

environments, together with internal factors, is of the preliminary maneuver to be undertaken. According

to the literature, the effects of globalization, regulation, technology, and competition become intensified

to which most of the international organizations need to pay very close attention (McCune, 1999).

Likewise, the internal factors, such as corporate identity, brand improvement, etc. also significantly

contribute to the instigation of organizational change. With these regards, the Godrej Group management

team and change agents are required to understand the current status of the organization in order to

determine the need for change, leading to brand and business status introduction. The following thought

in change formulation is to understand the objectives of the change or to identify the destination of

change achievement – competitive advantage, successful business or sustainable change commitment.

The aforementioned steps are explicitly applied to the Godrej Group case. In the process of the AC

Change Model, some components essentially touch upon main issues, such as leadership and workforce,

in which the Godrej brand and business status changes have readjusted where appropriate. In sum, both

the AC Change Model and the Godrej Group change phrases have shared a common rationale of a

systematic framework for change.

Consolidating improvements and changing some policies that are not associated with the vision

Planning to publicise short term wins or successes so as to encourage change continuity

Empowering others to change structures or policies in the way that will facilitate

Phase VI

Communicating the vision through numerous channels of communication

Creating a vision to achieve the desired end- result

Forming a powerful coalition of change – oriented individuals

Establishing a sense of urgency by relating to potential crisis and opportunities facing the firm

Phase V

Phase VII

Phase IV

Phase III

Phase II

Phase I

Identifying the destination for change achievement:

o Continuous change interventions

o Organizational culture and

change commitment

o Successful business

o Sustainable change management

Bridge the gap with communication

strategies

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Understanding the status –quo of the organisation by considering:

o Environmental scanning

o Leadership attributes

o Top management commitment

o Resistance to change


It is argued that there is no clear distinction between the formulation and implementation plans of change

in principle. This argument has been empirically proven in the case of Godrej Group against Kotter’s

ideas, as diagrammatically shown above. Each phase of the implementation stages closely associates

with the formulation process of the Godrej Group change scheme despite different factors concerned. A

strengthening argument can be made upon the fact that the change mechanism should be perceived as an

amalgamated, ongoing process where an entire series of action plans is logically outlined and developed

at once at the beginning of the process.

4.1.2 Reconsidering Change Resistance

Extensive research reveals that employees may resist change unless they understand the context of

psychological or economical threats (Hayes, 1996; Baird et al., 1990). It seems to be unfair for

employees to assert that their change resistance constantly impedes the change efforts. The underpinning

reasons need to be researched from several cases with different organizational settings since the existing

concepts of change resistance may not be applicable to other circumstances. The majority of employees

of Godrej Group have not completely denied the change. Rather, a great deal of in-depth information

about changes is required to optimize the level of change repercussion. They are basically aware and

understand why the company needs to change. In connection with that, the degree of reactions can be

determined by the degree of the receiver’s understanding of the content.

Moreover, the terminology used in public could have been reconsidered. As Piderit (2000) proposes the

phrase “resistance to change” be replaced with “employee’s responses to change,” this has been supported

by one of the top executives of Godrej Group. The reason is that it seems to be psychologically

Institutionalising the new approaches by publicizing the firm’s success of changesPhase VIII

Identifying the destination for change achievement:

o Continuous change interventions

o Organizational culture and

change commitment

o Successful business

o Sustainable change management

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acceptable and practically applicable to the phenomenon. The employees should be viewed as friends,

not foes for change.

4.1.3 Rethinking Top Management Commitment: A Strategic Spearhead of Change

Generally, top executives are considered “knowledgeable captains” behind the steering wheel of change

in the organizations. Corporate strategic directions mainly reflect upon their determination and courage

to lead changes. However, evidence shows that they are anxious about organizational change due to costs

and time scales involved (Stickland, 1998; Sastry, 1997; Stace and Dunphy, 1994). The aforementioned

statements seem to be paradoxical in a pragmatic sense. On the one hand, they intend to navigate changes

successfully, but on the other hand they live in fear of change failure. Oftentimes, change success is

determined by the degree of risks on which the managers attempt to take. The Godrej Group case reveals

that the top management team’s actions fall into such a paradox. According to a Senior Manager of

Godrej Group, the top executives initiate the general principle of the brand and business status changes

but fail to carry on an efficient engagement of change schemes. They are supposed to demonstrate role

models to show a strong “proactive” commitment to change, such as challenging managers who refuse to

change, reorganizing the structure of the Board of Directors and dismissing unproductive executives from

the Board.

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4.1.4 Final Destination: Organizational Culture and Sustainable Change Management

Creating an effective change management scheme involves creating an environment in which all

organizational members can excel (Weiss, 2001). The notion of corporate culture comes into play

reshaping the organizational climate during and after the change missions are undertaken. As implicitly

scribed in the case findings, changes in organizational culture are highly anticipated upon completion of

the change schemes. A new attitude and behavior toward an increasing degree of competitiveness tends

to facilitate a long-term effect of organizational change in terms of business operations. That is to reform

the extant culture to be much more people-profited, customer-focused, and decision-decentralized.

In spite of being extensively used in various academic contexts, the term “sustainability” suggests much

more than it simply connotes – lasting for a long time. It also conveys the essence of embeddedness to

the change applications for which Godrej Group is striving. Successful business and incremental

profitability are no longer to secure sustainable change management since employees might not have

developed their commitment to change yet. Therefore, the ultimate aims of the Godrej Group changes are

to bring a new organizational culture and a sense of sustainable change management to bear upon the

organizational members, thereby achieving the long-term competitive advantage over other competitors.

4.2 Communication Strategies Reinvigorated

4.2.1 Formulating the Integrative Communication Strategies

By applying the idea of the change initiative development (Pettigrew and Fenton, 2000) tocommunication

strategies, the management team must think and act holistically and communicate as such to several

fronts in careful alignment. In essence, communication strategies will not succeed if done piecemeal.

They should be done in form of an integrating framework, incorporating non-communication factors,

which can yield an enlightening strategy to implement the plan in a broad perspective. And that term

“integrative communication strategy” is specifically given in the Godrej Group case.

Originally, Mohr and Nevin (1990) define a communication strategy as the use of a combination of

communication facets, which include frequency and formality of communication, content of

communication and channel of communication. From the findings, this definition is proven true in

practice. Nevertheless, in order to become systematically integrated, an emphasis on the evaluation

concept of the communication strategies needs to be incorporated, so that the feedback system of the

communication becomes established thereafter. Supported by empirical evidence in the literature, a two-

way communication enables change agents to assess the effectiveness of change strategies and,

simultaneously, rectify unfavorable strategies to promote smooth change efforts.

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In general, the communication strategies in Godrej Group are consistent with past research studies. Most

of significant elements of communication have been closely scrutinized prior to formulating the strategy

accordingly. The findings of the case reveal that the audience-driven focus along with an appropriate

tone of the message have to be identified in the first place. Based upon the notion of “what the employees

need to know,” the content or message is tailored and transmitted through several rich channels of

communication, such as team briefings, executive presentations, launch packs, electronic mail, and

internal publications. One of the communication strategies that have been implemented is to deliver “a

formal message in an informal way.” It proves to be successful in creating awareness and understanding

on the issues, but not commitment as such. Overall, the integrative communication strategy seems to be

well thought out and effectively facilitate these changes. However, further discussions can be made upon

the adverse aspects of such strategies after the implementation takes place.

4.2.2 Unexpected Pitfalls of the Integrative Communication Strategies

Practically, there are numerous factors that might involve in the ineffectiveness of the communication

strategies. According to the literature, psychological filtering, subcultures, and personal perceptions are

of the most common barriers to effective communications (Schermerhorn, 1998). In this case study, the

pitfalls of communication have not only derived from the individual level but also the organizational

level. Information overload in each business unit becomes a chronic impediment for employees because

the unit attempts to create its own identity. At the same time, the problem of information insufficiency on

the holistic picture of Godrej Group remains slackening in some business units. One of the Godrej Group

top executives views that the internal communication is good in parts or “patchy.” The management team

ends up telling rather than listening to what employee’s voice back. Primarily, the strategy focuses on

two-way communication. It turns out to be one dimensional or one-way communication. A large number

of written materials, such as newsletters, memos, etc., are sent to employees but there is no guarantee

whether they are going to read them or understand the issues clearly. In this respect, Sinetar (1988)

suggests that an organization undergoing change transitions should pursue the informal discussion group

as a powerful agent for change. Its underlying philosophy is to communicate the change issues with

parties concerned in an interactive atmosphere. Essentially, face-to-face communication aims to be

reinforced and mobilized by the open discussion in regard to the change issues. The work of Johnson et

al. (1994) posits that the team briefings in each business unit are characterized as a formal mode of

communication, leading to a non-substantial group interaction.

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4.3 Integrative Communication Strategies in Change Process

Change management and communication has been literally considered Siamese twins – sharing

interdependent properties and resources. Communication is not only spread throughout all change

activities, it is at the heart of many organizational transformation aspects. A new verge to facilitating

change management is to infuse the right medicine of communications into the vessel of change

problems. Axiomatically, the degree of impact on the organizational level tends to hinge upon the degree

of a change magnitude with which the top management or change agents reckon.

In the Godrej Group case of brand and business status changes, the integrative communication strategy

plays a pivotal role in bridging the gap between the present and the future change states. The impression

from the study attributes this to a systematic approach to measure the effectiveness of the communication

– encouraging employees to give responses toward the strategies put forth. That is one of the main

elements of the integrative communication strategies at Godrej Group. Within any change process,

communication schemes aim not only to create awareness and understanding of the issues but also to

influence continuous change interventions, including publicizing the change progress report to

employees. Connected to that, the organizational culture change and employee commitment to change

for Godrej Group gear toward reforming the extant culture to become much more competitive in an

atmosphere of harmonized corporate identity.

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CHAPTER V

5.1 Conclusion

Although change may seem ubiquitous, it is an unnatural provision in which most organizations deal.

Normally, change produces a crisis when it significantly disrupts expectations about important issues or

events. As such, the upheaval of change becomes inevitable to the extent that its magnitude has a far-

reaching impact on internal employees and pertinent stakeholders. Most of academics and practitioners

have been tempting to search for a best practice among a repertoire of potential change drivers developed

elsewhere.

It nevertheless appears that each organization is best at adapting and customizing its own distinctive

blend. What works well for some may not be effective for others. For these reasons, a case study

approach about change management tends to be asserted for this uniqueness.

In association with the above rationale, communication strategy, which serves as the key fundamental

part of the change management strategy, challenges the traditional mechanisms in terms of facilitating a

transitional hurdle of change. In essence, communication strategies will not succeed if done piecemeal.

They should be done in the form of an integrated framework, thereby broadening horizons toward a

holistic aspect of the entire organization. Empirical evidence in past research shows that the functions of

organizational communications are analogous to those of human blood vessels. They act as nutritious

substance transmitters or change message carriers throughout the body or the organization so as to

maintain healthy conditions or to arrange the corporate realignment.

Godrej group has been very successful since the last 100 years. Much of the success of the group can be

attributed to the values and vision of Godrej family, which continued as generations passed-by. During

the latter half of the century, Godrej adopted strong corporate governance practices and tried to

shed its image of a family-run business.

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However, looking at the vast scale of its operations, Godrej still has a long way to go to overcome the

existing inertia in the organization, due to the family control. The current strategies adopted by Godrej

Industries Limited are more in line in this direction; however, Godrej & Boyce is still lagging

behind. The group has an enormous potential and with lots of opportunities in the India market, it

will have to be more dynamic to sustain and grow in the future.

5.2 Implications

Academic Implications

Although the literature on change management and communication theories has been prolific in the

academic research, an integrative pattern of both constructs is under investigated. This volume of

research aims to provide a theoretical framework of the integrated role of communication strategy

formulation in conjunction with the change management process.

Based on a case study of Godrej group, such a framework has been theoretically explored and empirically

demonstrated some important aspects of the academic stance. That is, the formulation of communication

strategies must be harmonized with different change stages to ensure the change messages are effectively

conveyed to the right target group of change. A derivative of the framework, the study partially adapts

the work of Armenakis and Bedeian, 1999; Burnes, 2000; Hellriegel et al., 2001; Kreitner and Kinicki,

1995; Kotter, 1995; Maltz and Kohli, 1996; Sikora, 1994; and Sinetar, 1988 as foundational grounds of

theories to apply for the investigation of the change processes as well as communication flows across the

organization.

Practical Implications

In mirror of the Godrej group case, the research study aims to explore how executives in various

management levels perceive the internal communication process and formulate the appropriate strategies

not only to optimize the repercussion of change but also to bring out greater success in the future. By the

same token, it reflects upon which senior managers need to conceptually understand how different

communication practices lead to the desirable organizational change. Additionally, it has shed some light

on a pragmatic process of communicating the change efforts to the internal parties concerned.

The author believes that the practical applications can be extended to other organizations, regardless of

size, and, possibly, across the industry. However, they should at least share a similar pattern of change

issues -- either the brand or the business status change. In this regard, a certain benefit from this study

tends to be reaped in general. Last but not least, an integrative framework, of which numerous factors of

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the communication strategy in the change context are composed, serves as a functional guidance for

managers to navigate a plan of change.

5.3 Research Limitations

Provisional to this research conducted within a limited timeframe and space, the findings could not have

been yielded at a greater extent as anticipated. The constraining boundary of the research hence is

necessary to be revealed for the sake of future research improvement. Also, it helps the readers to

determine the degree of credibility of the research results. The constraining factors are attributable to

1) Inherent limitations of the case study approach and

2) Certain features of the author’s research methodology choices.

First are the inherent limitations of the case study approach. It has been long argued that the single case

study is susceptible to the low level of validity of the findings, although the multiple-method triangulation

employed has ensured that their internal validity is high (Yin, 1994). In this study, the research focus

embarks on exploring the depth of the communication strategy formulation in change issues within a

single organization rather than the breadth of the phenomenon in different organizational settings. As

such, the generalization ability to other organizations is relatively confined. The author believes that,

with a comparatively similar change matter to the case of Godrej group, the partial findings of the

empirical framework can be practically applied to various circumstances, whereby communications play a

major role in facilitating change efforts across the organization.

Second, a certain feature of the author’s research methodology choices has somehow limited the amount

of information obtained for data analysis. The interview arrangement with every senior manager or key

person concerned is perhaps beyond the author’s capability to control over a specified time period.

Therefore, a mixture of interview formats, which are face-to-face interviews and electronic interviews,

are of the best options to cope with this impediment. In regard to the electronic interviews or e-mail

interviews, an interaction between interviewers and interviewees during the course of the interviews,

which may lead to some further insights, does not seem to be technically plausible. Supported by a

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theory of qualitative research methods, the face-to-face interviews tend to bring more fruitful perspectives

on the subjects, and that a greater amount of relevant information is likely to be incremental. In addition,

the interpretations of data in this study are not meant to be superior or exclusive to other potential

interpretations. Despite being undertaken by the author’s best discretion, they are still subject to bias.

Such a bias may be alleviated if the data are to be interpreted by several researchers, thereby achieving a

balance of the viewpoints.

5.4 Further Research

From these research findings, there are several intriguing areas of research left unaddressed and worth

investigating for empirical evidence and elucidating theories. First, this research aims to focus merely on

the formulation part of the communication strategy in change contexts but less attention is paid to the

implementation scheme of the communication strategy. As such, it would be useful to conduct further

research on the implementation part of the communication strategy in a similar circumstance, where

diverse sub-units are focused to strengthen the validity. A holistic and systematic case analysis tends to

provide both academics and practitioners a better understanding of those issues in a broader context.

Second, the longitudinal approach is suggested to be part of the research methods for further research.

Such a method would be very practical in observing the employee’s reaction toward changes. Also, it

helps the researchers to understand how behaviors and attitudes are developed and influenced (Pettigrew,

1990). Since the interviews enable the researchers to comprehend a phenomenon superficially, the

method of observations serves as a powerful tool to delve into the underlying reasons of the observed

reactions. As a result, more in-depth findings can be yielded. In connection with that, the study of how

the brand and business status changes contribute to the organizational culture change should be

empirically researched.

Finally, in order to challenge the framework of the findings, the use of contrasting observations from

multiple cases seems to enhance the notion of replication. Additionally, the external validity of the initial

investigation can be inspected and thereafter either verifies or falsifies the theory (Yin, 1994). A multiple

case approach may be extended to include a comparative study between organizations, whereby similar

research procedures are applied.

Nonetheless, it should be noted that, to select the cases for a comparative study, the characteristics of the

study issues in each organization, regardless of industry, need to be at least comparable in the sense of

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research contributions. For instance, a comparative study in the communication strategies for the brand

change between Godrej group and other family run diversified business (Reliance Industries, Aditya Birla

Group) would be an interesting topic to challenge the current findings and, potentially, attribute the

similarities or differences of change practices.

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Documents

Project Report - Role of Communication in Effective Change Management (a Case Study of Godrej Group)