Indian Experience Of OD In Public & Private Enterprises
INDIAN EXPERIENCE OF ODINPUBLIC & PRIVATE ENTERPRISESPresented by,Jincy JosephRemya Jacob
PUBLIC ENTERPRISESDefinition A public sector enterprise may be defined asany commercial or industrial undertakingowned and managed by the government with aview to maximise social welfare and uphold thepublic interest. Public enterprises consist of nationalisedprivate sector enterprises, such as, banks, LifeInsurance Corporation of India and the newenterprises set up by the government such asHindustan Machine Tools (HMT), GasAuthority of India (GAIL), State TradingCorporation (STC) etc.JINCYCharacteristics of Public Enterprises1. Government Ownership, Control andManagement2. Financed from Government Funds3. Public Welfare4. Public Utility Services5. Public Accountability6. Excessive Formalities
PublicEnterprisesDepartmentalUndertakingStatutory (or Public)CorporationGovernmentCompanyExample1. Posts & Telegraph2. Railways3. All India Radio (AIR)4. Door Darshan (TV)5. Ordnance FactoriesExample1. Food Corporation of India2. Industrial Finance Corporationof India3. Life Insurance Corporation ofIndia4. Unit Trust of India5. State Trading CorporationExample1. Hindustan Machine ToolsLimited2. Steel Authority of India Limited3. Hindustan ShipyardLimitedFORMS OF ORGANISATION OF PUBLIC ENTERPRISESin IndiaJINCY
IMPORTANCE OF PUBLIC SECTOR ENTERPRISES Balanced Regional Development. Boost the basic industries of an economy. Concentrate on public welfare activities. Promote exports. Price control of essential goods. Limit the influence of private monopoly. Ensure security of the country. Minimise the economic inequalities.JINCY
CURRENT SCENARIO:At the commencement of first five-year plan Government’s investment wasRs. 29 crores in five central public sector enterprises. Now it has increased to Rs.3,93,057 crores in 239 enterprises as on 31 March 2006. The public enterprises haveplayed a significant role in Indian economy. But the overall performance of most ofthe public sector enterprises is not satisfactory. The government is taking every stepto revive and restructure the public sector enterprises to improve theirperformance, productivity and profitability. Major emphasis has been given on thesick and chronically loss making enterprises, which are capable of being revived. On24 July 1991 the Government of India announced its Industrial policy to improve theperformance and portfolio of public sector enterprises. The new economic policiesalso emphasised on liberalisation, privatisation and globalisation. The role of publicsector was redefined. To grant autonomy and delegation of financial power to someof the profit making public sector enterprises Government has given them the statusof Navaratnas and Miniratnas.JINCY
ORGANIZATIONAL DEVELOPMENT AND CHANGEFROM TEXT – (PAGE NO : 166 …)
In todays highly turbulent business environment, change has become aninevitable part of life. Organizations that do not change when needed or arenot sensitive to the need for change do not survive long. Organizations, in order to be successful, need to place a high priority onproactivity (acting in advance to deal with an expected difficulty; anticipatory)and systematic understanding of organizational issues and on responding tocurrent and future external customer needs. Emergent need for O.D. in Indian organizations….?-highly volatile political and economic environment.-standing up to global competition .-move away borrowed technologies to their own technologicaldevelopments.-more concentration on Research and Development.-drift away from relationship and people driven organization to morecompetent, skilled and professional employees who are rather systemdriven.JINCY
Evolution of OD in India In India, O.D. and planned change started in the early 1960s. In the mid-1970s, O.D. was first introduced in India in Larsen and Toubro as aformal and structured part of the HRD department. There have been several efforts to apply O.D. approach and associatedtechniques in India but it has not created the desired impact. A deeper examination of values embedded in Indian religion and psycho-philosophy suggests that the cultural values are indeed largely supportiveof organizational renewal and change. Based on which new approaches anddesigns of O.D. interventions may be possible. And such designs are likely to beaccepted more readily in the country. After Liberalization , the application of O.D. technology has increased .(Reasons Text pageno : 167)JINCY
EXPERIENCES OF INDIAN ORGANIZATIONS WITH VARIOUSORGANIZATIONAL DEVELOPMENT INTERVENTIONS (ODI) Among available O.D. interventions and tools, the most prevalentones and those that have met with reasonable success in effectingthe desired change are:* Training* Action research* Survey feedback* HRD and HRD Audit* Role focused interventions* Person focused interventionsJINCY
1) TRAINING AS AN O.D. INTERVENTION Dynamic, multifaceted and interactive training . Training advantages : raises the consciousness of participants, makes people aware of the gaps between practical and theoretical approach, provides a common language to articulate shared problems and difficulties , generates ideas for change, and creates greater positive energy for change.Example : Chemcorp , public sector unit in Manufacturing ChemicalsSome other points : -o Cultural Changeo Convergence Effecto Transformational Changeo Focal Intervention TechniqueTEXT PAGE NO : 168 – 171 JINCY
2) ACTION RESEARCH Action research is a data based problem solving model that replicates the steps involved in thescientific method of inquiry. As an O.D. intervention, action research has pointed out to moreefficient resolution of practical problems, better understanding of ground realities by socialscientists and generation of new insights for theory building. Example : - Case of the Indian Chemical Company (ICCL) was facing a serious problem ofconflict between the materials department and the user department. ---- ( From Textbook )-Issues-Recommendations-Follow up and Findings-Loopholes Thus action research, as an O.D. intervention served in-cultivating a climate of increased collaboration,-participation and involvement,-increasing interdepartmental interface.-As the employees became self reflective,- meaningful solutions arose for practical concerns & problems,-but more importantly there was a development of self-helpcompetencies to deal with problems of the future.TEXT PAGE NO : 171 – 173 JINCY
ICCLIssuesFollow up andfindingsLoopholesRecommendationsExample Public Enterprise
3) SURVEY FEEDBACK The survey feedback has been used extensively by T. V. Rao , in a variouscapacities:* As a sensing instrument (Used by Crompton Greaves and Larsen & Toubro (L & T))* For organizational improvements (Voltas, in 1988-89)* For strategic shifts in structure, styles & personnel policies* For team building* For initiating cultural changes (Mafatlal group)* For developing motivating climateTEXT PAGE NO : 173 JINCY
4) HRD AND HRD AUDIT Perhaps India is the first country to formally establish a totally dedicatedHRD (Human Resources Development ) Department separated from thePersonnel Department. This was designed in the year 1974 when the termHRD itself was not very popular in the USA. Two consultants from the IndianInstitute of Management, Ahmedabad Dr. Udai Pareek & Dr. T V Rao afterreviewing the effectiveness of the performance appraisal system andtraining in Larsen & Toubro recommended an Integrated HR System to beestablished and the department dealing with development issues beseparated out from the personnel department and be called the HRDdepartment. Thus the first HRD department was established. It was followedin the banking sector by the State bank of India and its Associates to start aseries of new HRD departments.TEXT PAGE NO : 174 JINCY
5) ROLE FOCUSED INTERVENTIONS Role Clarity : “ Whenever there is a restructuring exercise ,“role clarity”becomes an issue. ” Role Negotiation Exercises : “have been a very common practice to build acollaborative and synergistic culture. ” Udai Pareek„ s book Managing Organizational Roles is a classic bookand is widely used in India. Role efficacy lab (REL)* REL is a short process oriented program to diagnose the level of roleefficacy in a group of employees in the organization and take stepsto raise that level.* Role efficacy as a concept was formulated by Udai Pareek.* RELs are also very common in India.
6) PERSON FOCUSED INTERVENTIONS This have great relevance to various HRD subsystems liketraining, performance development, counseling, etc. These interventions can be mainly classified as :1)Participant active interventions2)Self Assessment through feedback on Instruments (SAFI services)3) Facilitator Active Interventions4) 360 Degree Feedback Based Interventions5) Achievement Motivation labs6) Extension Motivation
CONTI….* They are normally done as a part of training or restructuring interventions. As atraining tool it aims at enhancing role efficacy.The objective of such an intervention is :- to enable understanding of individual and groupcommitments with the top management and organisation,- creating an opportunity to get moral support and reinforcement fromthe top management and- providing a forum for top management to comment on themanagers„ expectations and accordingly prepare action plans. Role Stress : In relationship oriented culture, employees may have to performmultiple roles and thus they may suffer from work related stress. So for managingrole stress , Role Stress Programs have also been conducted by Indianorganizational development practitioners.
PRIVATE ENTERPRISESDefinition It is a business unitestablished, owned, and operated byprivate individuals (company foundersand/or their families and heirs or by a small groupof investors. Sometimes employees also holdshares of private companies) for profit. Most small businesses are privatelyheld. Private companies may be calledcorporations, limitedcompanies, limitedliability companies, unlimitedcompanies, or othernames, depending on where and howthey are organized.REMYAAdvantages of Private EnterprisesLimitation of liabilityLower taxesLimited company accounts andsole trader basic accounts.Additional financialconsiderationAdministration, managementand business standards……
PRIVATEENTERPRISESIn 2008 the 441largest privatecompanies in theus accounted for $1.8 trillion inrevenue andemployed 6.2million peopleaccording to Forbes a privately held company is abusiness company owned by eithernon-governmental organizations or bya relatively small number of shareholders or company members whichdoes not offer or trade its companystock to general public. On the stockmarket exchanges but rather thecompany’s stock is offered, ownedand traded or exchanged privatelymore ambiguous terms for a privatelyheld company are unquoted companyand unlisted company
EXAMPLES Japan’s local expertise is rated world class. Multi-nationals are rushing to setup operations incentres of excellence in Asia.-particularly in india. TATA,RELIANCE,ONGC,IOC,RANBAXY,AUROBINDO PHARMA,INFOSYS,WIPRO… ICICI,HDFC in private financial sector.
. In india the private limited is usedafter a name of a company which isprivately held unlike public companieswhich use the word limited only. Director is officially an employee ofthe private limited company
INDIAN ODI: ISSUES INVOLVED OD is the process of applying behavioural scienceto systems,structure and different processes of anorganization. It is very critical to determine what the organizationreally needs- incremental changes or radicaltransformations. Overall structure of the organization needs to beanalyzed thoroughly before launching any ODI. Internal politics is more complicated. Solutions emerging out of ODI should be acceptedby top management. Communications and information systems shouldbe well established.
For managing change actions taken may be unrelated to the ODI ornever explained to the targeted audience. Interpersonal relations are highly sensitive. A small disagreementmay lead to post-learning operating environment meaningless. The pull effect of future aspiration works better than push approachthrough change.(sustainability of change). Concerns about role of leadership, articulating processing andsharing vision implementation, communication of change and empowerment oforganizational members during the period of change. Only consider the functional ones prevailing as culturalnorms, attitudes, beliefs.
OD was initialy pushed by india-UK and indian- americancollaborations. due to globalization, severe competition, most organizationsare continuously working on modifying their strategies. Focuses on system, structure, processes, and organizationalbehavior. Continuous effort to make managerial, social as well aspolitical adjustments. . Areas of improvement, diversificationof Indian industry are also identified using OD. Almost every organization have structured organizationaldevelopment departments or facilitators in their organizations. Orzns enhance the capabilities of their leaders for keeping upwith the externally driven requirements in order to initiatechange.OD: CURRENT SCENARIO
Companies approach trained practitioners in indiawhen they plan to institute any change in theirorganization. Indian school of business has organized a globalOD summit in this, different aspects related tocreating sustainable development throughorganizational development
OD: FUTURE At every point of change ODI is a must. The young generation feel that they are in theknowledge world while the old feel that they areleading a discipline and culture taking the orgznthey have been serving to the heights to which itmoved today. Problem of attrition on one side and lack of personswith right skills. Innovation come from the people who go in tunewith the orgzn capabilities.
Feeling confident to take risk path is the rock bed ofchange. Political uncertainties, economic expediency, several laws and regulations governing theenterprises The investors in the company demand for justifiableshare in growth, the suppliers need bills to be paidon time, the shop floor leaders require all the inputsrequired for running their machines
In future investments should be done in researchand development Example Dhoni,as cricket captain demonstrated to the worldthat taking the team along required trust andconfidence in the colleagues and himself Mutual confidence is the future challenge ofcompanies.
Basis of difference Private sector enterprises Public sector enterprises1. Objective Maximisation of profit. Maximise social welfareand ensure balancedeconomicdevelopment.2. Ownership Owned by individuals. Owned by Government.3. Management Managed by owner andprofessional managers.Managed by Government.4. Capital Raised by ownersthrough loans, privatesources and public issues.Raised from Governmentfunds and sometimesthrough public issues.5. Area of operation Operates in all areas withadequate return oninvestmentOperates in basic and publicutility sectors.Difference Between Private Sector Enterprises & Public Sector EnterprisesJINCY
EXAMPLE FOR PRIVATE ENTERPRISEWhen icici bank merged with bank ofMadura(BoM), there where many issues involved:Staff strength of icici is lowerthan BoMSize of icici was 3 timesbigger than BoM.Half of the employees ofBoM where subordinatestaffs.Large differences inprofiles,designations,salaries
RESULTED IN:EmployeedissatisfactionWhether ruralbrancheswouldcontinue ornotPositionproblemFeeling ofpush up forproductivity
SOLVING PROBLEM Icici bank was established in 1994,second largestbank in india and among the top 150 in the world..itis a universal bank ,offering well diversified portfolioof financial services.Reasons for resistance• Job security• Lack of effectivecommunication• Rapidity and extend ofchange.• Group resistance.• Emotional turmoil.• Loss of power and control• Technology.• Acquisitions and mergers.• Women power.Management of change• Participation and involment• Communication andeducation.• Leadership.• Negotiation and agreement.• Willingness for the sake ofthe group.• Timing of change.
MANAGING RESISTANCE TO CHANGE Change ultimately affects the people in the organisation. It is always better to explain why change is necessary. What benefits are likely to accrue as a result of change howthese benefits are to be shared by the employees and theorganisation. There is a general notion that benefits from change accrue tothe organisation and management at the cost of its workers. Without full cooperation of workers no change can beplanned, implemented and its benefits enjoyed. Different combinations of different techniques have to be tried. Organizational culture is important. According to force field analysis, a decision to implementchange has been taken,it is necessary to identify andunderstand what forces are likely to push change and whatforces are likely to restrain it.
SOLUTIONSCommunicationopenCultureidentificationintranettechnologyTraining for job
CONCLUSION Legal and regulatory facilitation is moving intandem with the world trade organizationagreement requirements. Future challenge for Indian companies lies inHRM, organizational innovativeness andtechnological excellence with high marketpenetration. Appointment of right change agents, consultants forOD interventions and putting in place monitoringand implementation mechanisms.
ODI is seen as reactive instrument to bring aboutradical change in the organization. It is always important to have a strong monitoringand implementation mechanism for the ODI tosucceed.