Professional Documents
Culture Documents
Submitted to Dr. Niraj Kumar Submitted by Kamlesh Kumar MBA-FINANCE Sem-III Batch- 2011-2013
Acknowledgement
I take this opportunity to convey our sincere thanks and gratitude to all those who have directly or indirectly Helped and contributed towards the completion of this project. First and foremost, we would like to thank Dr. Niraj Kumar for his constant guidance and support throughout this project. During the project, I realized that the degree of relevance of the learning being imparted in the class is very high. The learning enabled us to get a better understanding of the nitty-gritty of the subject which I studied. I would also like to thank my batch mates for the discussions that I had with them. All these have resulted in the enrichment of my knowledge and their inputs have helped us to incorporate relevant issues into my project.
Table of Content
Topic Name Page No. Introduction about Indian Banking Industry .....................1 Literature review What is Change..2 Forces for change External Forces2 Internal Forces.....3 Nature of Change ...4 Management of Change..4 Approaches to organizational change....5 What is planned change?......................................................................6 What are the goals of planned change?..............................................6
Recent trends in banking industry..7 About State bank of India.......9 Research work..10 Analysis and Findings ..11 Conclusion15 References 16
Page No.1
Change
Organizational change takes place because of the dynamic and changing business environment. This environment is marked by competition which creates two situations:
In case the organization accepts the challenge to face competition, it flourishes in builds effectiveness. Meaning of change: The term change refers to any altercation which occurs in the overall work environment of an organization. Change simply refers to alteration in the existing conditions of an organization. Even in most stable organizations change is necessary to maintain stability. The economic and social environment is so dynamic that without adapting to such change even the most successful organizations cannot survive in the changed environment. Therefore, management must continuously monitor the outside environment and be sufficiently innovative and creative to implement these changes effectively. Organizations encounter different forces for change. These forces come from external and internal sources of the organization. EXTERNAL FORCES External forces for change originate outside an organization. There are four key external forces for change: Demographic Characteristics: These include age, education, skill level and gender of employees. Organizations need to effectively manage these characteristics in order to receive maximum contribution and commitment from their employees. Technological Advancements: Both manufacturing and service organizations are increasingly using technology as a means to improve productivity and market competitiveness. Market Changes: The emergence of a global economy is forcing Indian organizations to change the way they do business. Page No.2
Organizations are entering into new partnerships with their suppliers in order to deliver higher quality products at lower prices. Social and Political Pressures: These forces are created by social and political events. Personal values affect employees needs, priorities and motivation. Therefore, managers need to adjust their managerial style according to the changing employee values. Political events also create substantial change in an organization. Although it is difficult for organizations to predict changes in political forces, many organizations hire lobbyists and consultants to help them detect and respond to social and political changes. Page No. INTERNAL FORCES Internal forces for change come from inside the organization. This may come from both human resource problems and managerial behavior. Human Resource Problems These problems stem from employee perceptions about their work environment and conflict between an employee and organization needs. Organizations might respond to these problems by using the various approaches to job design by implementing realistic job previews and by reducing employees' role conflict, stress, work overload and ambiguity. Managerial Behavior Excessive interpersonal conflict between managers and their subordinates is a sign of implementing an immediate change. Inappropriate leader behavior such as inadequate direction and support are the cause of conflict between managers and their subordinates. Nature of Change Organizations introduce changes through people. Unless the people are willing to accept the need and responsibility for organizational change, intended changes can never be translated into reality. In addition, individuals have to learn to adapt their attitudes and behavioral patterns to constantly changing environments. Management of change involves both individual and organizational change. Individual change is behavioral change, which is determined by individual characteristics of members such as their knowledge, attitudes, beliefs, needs, expectations and skills. It is possible to bring about a total change m_ an organization by changing behaviors of individual members through participative and. educative strategies. Although, the degree of difficulty involved in the change and the time taken to bring about the change will depend on the target of change. The attitudes towards change are largely dependent on the nature of the situation and the manner in .which changes are initiated and executed.
Page No.3
Changing individual behavior is more time consuming and a difficult task. The linkage between attitude and behavior is not direct and therefore changing behavior is more difficult than changing attitudes. One's attitude does not necessarily get reflected in one's behavior. For example, we know that honesty is the best policy and we have favourable altitudes towards people- who are honest but in certain situations, we may still act in a less honest way. Changing group behavior is usually a more prolonged and harder task. Every group has its own dynamics of push and pull that attempt to neutralise the change that may have taken place in an individual. Due to this group dynamics, individual member's changed behavior may revert to earlier normative behavior in order to maintain the change in the existing conditions. However, due to the same reasons of a group's over-riding influence on individual members, sometimes it may be easier to tackle the group as a whole rather than trying to change the behavior of members one by one. Bringing total behavioral change in all the groups and members of an organization involves difficult long-range effort. More often than not, it is a slow painful process to usher a total cultural change in an organization. It is possible to change total organization without focusing at the level of individual's change of knowledge, attitude and behavior. Modification in the organization's structures, policies, procedures and techniques leads to total organizational change. These types of changes alter prescribed relationships and roles assigned to members and eventually modify the individual members behavior and attitudes. As these two kinds of changes are interdependent, the complexity of managing change increases manifold.
APPROACHES TO ORGANIZATIONAL CHANGE As organizational change is a complex process, therefore managers must approach it systematically and logically. Some organizational changes are planned whereas other changes are reactive. Planned change is designed and implemented by an organization in an orderly and timely fashion in the anticipation of future change. Reactive change results from a reaction of an organization to unexpected events. In contrast to planned change, it is a piece-meal response to circumstances as they develop. External forces that the organization has failed to anticipate or interpret always bring about reactive change. Since reactive change may have to be carried out hastily, it increases the likelihood of a poorly conceived and poorly executed Program. Planned change is always preferable to reactive change. Managers who sit back and respond to change only when they can no longer avoid it are likely to waste a lot of time and money trying to patch together a lastminute solution. The more effective approach is to anticipate the significant forces for change working in an organization and plan ways to address them. To accomplish this, managers must understand the steps needed for effective change. What is planned change? Planned change is a set of activities in an organization that are intentional and goal-oriented. .
Page No.4
What are the goals of planned change? Essentially there are two goals: 1. It seeks to improve the ability of organization to adapt to changes in its environment. 2. It seeks to change employee behavior since an organizations success or failure is essentially due to the things its employees do or fail to do, planned change is concerned with changing the behavior of individuals and groups within the organization. Planned Change in terms of order of magnitude First-order Change (or Transactional Change): In this type of change, features of the organization change but fundamental nature of the organization remains the same. First order change goes by many labels: transactional, evolutionary, adaptive, incremental, or discontinuous change. Second-order change (Transformational Change): In this change the nature of the organization is fundamentally and substantially altered. Second order change goes by many different labels: transformational, revolutionary, radical, or discontinuous change. OD programs are directed towards both first- and second-order change. Organizational Climate: It is defined as peoples perceptions and attitudes about the organizationwhether good or bad place to work, friendly or unfriendly, hardworking or easy-going and so forth.
Organizational Culture: It is defined as deep seated assumptions, values, beliefs that are enduring, often unconscious, and difficult to change. Changing culture is much more difficult than changing climate.
The banks have shed their traditional functions and have been innovating, improving and coming out with new types of the services to cater to the emerging needs of their customers. Massive branch expansion in the rural and underdeveloped areas, mobilization of savings and diversification of credit facilities to the either to neglected areas like small scale industrial sector, agricultural and other preferred areas like export sector etc. have resulted in the widening and deepening of the financial infrastructure and transferred the fundamental character of class banking into mass banking. There has been considerable innovation and diversification in the business of major commercial banks. Some of them have engaged in the areas of consumer credit, credit cards, merchant banking, leasing, mutual funds etc. A few banks have already set up subsidiaries for merchant banking, leasing and mutual funds and many more are in the process of doing so. Some banks have commenced factoring business. THE INDIAN BANKING SECTOR The history of Indian banking can be divided into three main phases. Phase I (1786- 1969) - Initial phase of banking in India when many small banks were set up Phase II (1969- 1991) - Nationalization, regularization and growth Phase III (1991 onwards) - Liberalization and its aftermath With the reforms in Phase III the Indian banking sector, as it stands today, is mature in supply, product range and reach, with banks having clean, strong and transparent balance sheets. The major growth drivers are increase in retail credit demand, proliferation of ATMs and debit-cards, decreasing NPAs due to Securitization, improved macroeconomic conditions, diversification, interest rate spreads, and regulatory and policy changes (e.g. amendments to the Banking Regulation Act). Certain trends like growing competition, product innovation and branding, focus on strengthening risk management systems, emphasis on technology have emerged in the recent past. In addition, the impact of the Basel II norms is going to be expensive for Indian banks, with the need for additional capital requirement and costly database creation and maintenance processes. Larger banks would have a relative advantage with the incorporation of the norms.
RECENT Technology
1) Electronic Payment Services E Cheques
Now-a-days we are hearing about e-governance, e-mail, e-commerce, e-tail etc. In the same manner, a new technology is being developed in US for introduction of e-cheque, which will eventually replace the conventional paper cheque. India, as harbinger to the introduction of e-cheque, the Negotiable Instruments Act has already been amended to include; Truncated cheque and E-cheque instruments. 2) Real Time Gross Settlement (RTGS)
Real Time Gross Settlement system, introduced in India since March 2004, is a system through which electronics instructions can be given by banks to transfer funds from their account to the account of another bank. The RTGS system is maintained and operated by the RBI and provides a means of efficient and faster funds transfer among banks facilitating their financial operations. As the name suggests, funds transfer between banks takes place on a Real Time' basis. Therefore, money can reach the beneficiary instantaneously and the beneficiary's bank has the responsibility to credit the beneficiary's account within two hours. Page No.6
3)
Electronic Funds Transfer (EFT) is a system whereby anyone who wants to make payment to another person/company etc. can approach his bank and make cash payment or give instructions/authorization to transfer funds directly from his own account to the bank account of the receiver/beneficiary. Complete details such as the receiver's name, bank account number, account type (savings or current account), bank name, city, branch name etc. should be furnished to the bank at the time of requesting for such transfers so that the amount reaches the beneficiaries' account correctly and faster. RBI is the service provider of EFT. 4) Electronic Clearing Service (ECS)
Electronic Clearing Service is a retail payment system that can be used to make bulk payments/receipts of a similar nature especially where each individual payment is of a repetitive nature and of relatively smaller amount. This facility is meant for companies and government departments to make/receive large volumes of payments rather than for funds transfers by individuals. 5) Automatic Teller Machine (ATM)
Automatic Teller Machine is the most popular devise in India, which enables the customers to withdraw their money 24 hours a day 7 days a week. It is a devise that allows customer who has an ATM card to perform routine banking transactions without interacting with a human teller. In addition to cash withdrawal, ATMs can be used for payment of utility bills, funds transfer between accounts, deposit of cheques and cash into accounts, balance enquiry etc. 6) Point of Sale Terminal
Point of Sale Terminal is a computer terminal that is linked online to the computerized customer information files in a bank and magnetically encoded plastic transaction card that identifies the customer to the computer. During a transaction, the customer's account is debited and the retailer's account is credited by the computer for the amount of purchase. 7) Tele Banking
Tele Banking facilitates the customer to do entire non-cash related banking on telephone. Under this devise Automatic Voice Recorder is used for simpler queries and transactions. For complicated queries and transactions, manned phone terminals are used. 8) Electronic Data Interchange (EDI)
Electronic Data Interchange is the electronic exchange of business documents like purchase order, invoices, shipping notices, receiving advices etc. in a standard, computer processed, universally accepted format between trading partners. EDI can also be used to transmit financial information and payments in electronic form.
Page No.7
IMPLICATIONS
The banks were quickly responded to the changes in the industry; especially the new generation banks. The continuance of the trend has re-defined and re-engineered the banking operations as whole with more customization through leveraging technology. As technology makes banking convenient, customers can access banking services and do banking transactions any time and from any ware. The importance of physical branches is going down.
Page No.9
RESEARCH WORK
In order to analyze a particular problem research is the most important way of doing it. In research, we first find out the problem then collect data that would be useful in analyzing it and finally analyze & interpret it. Analyzing a problem through research gives a more clear idea than just analyzing through observation. Through observation the concrete or the real idea may not come up but through research work i.e. through step by step analyzing the real picture comes up.
Research Objective: To find out the employees behavior about change in organization. . Research Design: This project is a descriptive research project. I have chosen this so as to collect more information about each respondent. For my research total number of respondents is 10. I have chosen a small number so that deep information can be collected through it. Whole analysis and finding is based on the information provided by them.
Type of Data Collected: The data collected is primary in nature. They were collected through a questionnaire which is attached in the annexure. This questionnaire is prepared to collect deep information about the change management by the employees of SBI.
Page No.10
Yes 50%
No 30%
INTERPRETATION
It can be seen from the pie chart that approximately half of the portion is occupied by Yes. This makes it clear that half of them prefer Yes means they are satisfied with their current designation else. After No, has the second major portion. All of the rest occupy by dont know.
According to the questionnaire, in Q2- Do you think your skills and abilities are properly utilised in this organisation?
No 0%
Yes 90%
Page No.11
INTERPRETATION
It can be seen from the pie chart that Maximum of the portion is occupied by Yes. This makes it clear that large no. of employees think that they utilized their skill in the org.
According to the questionnaire, Q3- What are basic problem/ causes that hindered your performance in organisation?
Supervisors 0% Structure 10% Salary 20% Any Change 60%
Culture 10%
INTERPRETATION
It can be seen from the pie chart that more than half of the portion is occupied by Any Change. This makes it clear that basic problem/ causes that hindered their performance in organization by Any Change.
According to the questionnaire, Q4- Is there any group of people with whom you can perform well
Don't Know 10%
Yes 40%
No 50%
Page No. 12
INTERPRETATION
It can be seen from the pie chart that Half of the portion is occupied by No and small difference between Yes& No. This makes it clear that large no. of employees think that they utilized their skill in the org. According to the questionnaire,Q-5 Do you want to make any change in your organisational structure?
Yes 30%
No 60%
INTERPRETATION
Most of the employees dont want to change their Orgnisational structure they are satisfied with their current Orgnisational structure. According to the questionnaire, in 6st question
INTERPRETATION
Employees given Reason behind employees dont want to change is their Orgnisational structure because they feel insecured. They feel their present structure was good according to them they dont want any changes.
Page No.13
According to the questionnaire, in Q7- What do you think change is necessary for organisational development?
Yes 50%
No 20%
INTERPRETATION
It can be seen from the pie chart that half of the portion is occupied by Yes. they think that change is necessary for Orgnisational development. According to the questionnaire, in Q-8 Do you like job rotations?
Don't Know 0% Yes 20%
No 80%
INTERPRETATION
It can be seen from the pie chart that Majority of the portion is occupied by No. they dont want change in their job shifts. According to the questionnaire, Q9- Any change in organisation will affect your?
Page No.14
Performance
Positive Negative
Salary
Positive 10% Negative
Motivation
Positive Negative
30% 70%
INTERPRETATION
In this question we find that the changes in orgnisation Salary and Motivation Factors affect positively but other changes negatively impact their performances. According to the questionnaire, Q10- Rank the following factor according to you-
Promtion
0% 0% Rank 1 30% 70% Rank 2 Rank 3 Rank 4 40%
Reward
0% 0% Rank 1 40% Rank 2 Rank 3 Rank 4
Achievment
10% Rank 1 30% 50% 20% Rank 2 Rank 3 Rank 4
Finacial Incentives
10% Rank 1 Rank 2 60% Rank 3 Rank 4
INTERPRETATION
In this question we find that most of the employees are more focus on reward, financial incentives and promotion but they dont want to take higher Authority and responsibility.
Conclusion
On the basis of research we find that the most of the Employees in orgnisation resist changes in their orgnisation. As per research done on the Employees of SBI we find that they dont want to posses any changes.
Page No.15
When that change are necessary for the Orgnisational effectiveness and performance and become competitive. That time employees are accepts the change otherwise they resist the change. Motivation and Salary factors are impact positively and they are highly graded reward incentives and promotion.
References
http://info.shine.com/Industry-Information/Finance-and-Banking/117.aspx http://organizationdevelopment.wordpress.com/2008/08/10/fundamental-terminology-of-organization-development/ http://www.mbainfoline.com/Articles%20on%20Management/Recent%20Trends%20in%20Banking.htm
Page No.16
Annexure
-QuestionnaireQ1- Are you satisfied with your current designation? YES NO DONT KNOW
Q2- Do you think your skills and abilities are properly utilised in this organisation? YES NO DONT KNOW
Q3- What are basic problem/ causes that hindered your performance in organisation? Supervisors Structure Salary Culture Any change
Q4- Is there any group of people with whom you can perform well? YES NO DONT KNOW
Q5- Do you want to make any change in your organisational structure? YES NO DONT KNOW
Q6- IF not, then why? Q7- What do you think change is necessary for organisational development? YES NO DONT KNOW
Page No.17
NO DONT KNOW
Q9- Any change in organisation will affect your? Performance Salary Motivation (Negatively / Positively) (Negatively / Positively) ( Negatively / Positively)
Q10- Rank the following factor according to youFactor Promotion Reward and recognition Achievement Higher authority and responsibility Financial Incentives Rank (1 to 4) 1 is highest
Page No.18