Group Case Analysis

Group Case Analysis Organizational Change Ashford University

Chapter 5 Case

Group Case Analysis Introduction With increasing competition in Indias hyper dynamic Information Technology (IT) sector, HCL technology struggled to stay in competition as the IT industry shifted from hardware to software and offering infrastructure services. To survive in this dynamic environment, HCL looked within and promoted Vineet Nayar as President. His goal was to make sure HCL was the global leader in transformational outsourcing. This was to be achieved by rejuvenating employees;

introducing the Employee first, Customer second initiative, using 360 Performance Evaluations and additional human resource initiatives. With this strategy, Nayar made a significant change in HCL within two years. Case Synopsis Chapter 5 is about people alignment and this case study is based on a transformational change within the company in order to position HCL as a global leader in transformational outsourcing services. Vineet Nayar was promoted to president and he immediately set new goals for the company and the strategic renewal. He started by rejuvenating employees after three months he assumed the presidents position with the employee first, customer second initiative in order to invert the pyramid. He introduced the 360 Performance Evaluations so he can have feedback from the employees with everything they want. The additional people alignment initiatives consisted of renaming the HCLs training program and the HCL abandoned performance-based bonuses and adopted, instead what was called trust pay. By 2007, Nayar realized that the company had made some impressive improvements and HCL has achieved the highest level of organic growth.

Group Case Analysis Analysis Vineet Nayar recommended an alternative that included some unconventionaleven radicalmanagement practices. At HCLT, he adopted an Employees First structure in which management is accountable to employees, as

well as the other way around. Nayar believed this strategy will create the interface between employee and customer where genuine value is created. (Nayar). Employees First, Customers Second explores the steps of HCLTs transformational journey as the company recognized the need for change, created a culture of trust through transparency, turned the organizational pyramid on its head, and shifted the responsibility of change from the office of the CEO to the employees using small catalysts, or blue ocean droplets, that produced big results. And since an effective change will also demand new behaviors from executives at the top of the organization (Spector), Vineet adopted the 360 feedback performance for the top management first as a process of developing human resources for his new strategy. The reports posted in the companys intranet gave employees the opportunity to see how their leaders were doing. The main goal of this unconventional and radical strategy was a transformational change within the company in order to position HCL as a global leader in transformational outsourcing services. This is how the new strategy reinforces the approach to people alignment. The key to success of this new strategy is the perfect connection between employees and strategy. Employees will be in a better position if they meet the new goals for the company. They needed to be willing and able to drive an innovative, sophisticated experience for costumers. This strategy did not mean free lunch, free

Group Case Analysis buses, and subsidies. It was about setting clear priorities, investing in employee development and unleashing their potential to produce bottom-line results. They will be more involved with their jobs thanks to the new training program. With this program, employees will be better prepared and they will understand the work of their operation at both the tactical and strategic level. Another backing was the

direct contact between the CEO and employees. They could interact directly with the CEO, which is an advantage for them and for the CEO since they meet necessities and ideas of employees. Maybe the most important backing was about salaries. One point of the strategy was called trust pay. This meant payments would be fixed at the beginning of the year instead of having variable pay account for up to 30 percent of total compensation. For the company, it would be a higher fixed cost but they would make sure employees would deliver products. And employees would have a fixed salary which is always an advantage for them. In resume, people alignment, getting the right people on the bus and the wrong people off the bus, is the key to effective change implementation with this strategy. Both the employees and the company benefit from this change since right employees will reduce time, cost, and other revenues in later developmental inventions; and the company will have the most qualified people for the new strategy. Another point is the potential problems of this new strategy. We dont see any potential problems within the company since the new procedures were created in order to improve the internal system inside of the company and with the goal of converting employees in the core of the company. With this new strategy,

Group Case Analysis employees would be the most important part of the company so they should be acquainted with this change. One of the problems they could have with the people alignment initiatives would be the rejuvenation of the workforce. This initiative would cause older and out of style workers to lose their jobs because they are unable to adapt to new changes since they have been set in stone for many years

doing the same things at the same job, it would make it harder for them to adapt. His initiative could also face a problem of trust since the reciprocal accountability would involve sharing information between management and employees. Where we can find some potential problems is outside of the company. Nayar is certainly going to come across problems implementing his human resource initiative within the country. This is due to the hierarchical culture that places managers high above subordinates in India and makes them almost dictators. The social and economic impact in India could be the most important problem. India is a traditional and old-fashioned country where companies have a traditional hierarchical structure, where lead executives take a dictatorial approach to management. In fact, When Nayar took over HCL, executives at the top were doing their best to preserve their own power controlling knowledge and other resources and demanding accountability from all those working below them. (Nayar). His initiative approach then is to invert the pyramid. According to his article, inverting the pyramid did not literally mean upend the hierarchy. Our real goal was to make management, enabling functions and employees in the value zone accountable to one another. Nayar believed, employees spent far too much of their time explaining their actions and reporting their results, time which could have and

Group Case Analysis

should have been spent delivering on the promise of our services. The hierarchical structure was getting in the way of employees who worked in the value zone. One of the goals of the new strategy was to change the idea of leaders as dictators, but some competitors could think about that change as a threat since some workers could demand the same conditions of freedom to interact with CEOs directly and greater participation within companies. Also, due to new policy of fixed salaries many workers of the competency would want to leave their current jobs in order to apply for a new job at HCL. This could cause an economic turmoil since competitors could lose their workers unless they decide to increase salaries for their workers. The last point of this paper is the possible use of this strategy around the world. Nayars ideas has established a guideline for HCL since 2005, leading to the formation of various divisions in HCL such as the Women first council. HCL has believed that delighted employees translate to delighted customers. (Joshi). Nayars ideas made improvements in HCL Technologies within two years. The companys attrition rate had dropped from 20.4% in 2005 to 17.2% in 2007. But in 2010, the company had seen many changes and improvements. Nayars ideas could be transferable to other industries and countries since it has been a success story for HCL Technology even though there were some lapses. What we see is Nayar used the make approach to develop his employees whereas in other industries or countries, they might have to use the buy approach or a combination of both. Nayars ideas are perfectly able to be adapted to other industries and other countries. The idea of employees as the core of the business is a great tool to motivate, improve skills and abilities, increase profit, and reduce costs. Vineet was

Group Case Analysis

the first person who realized employees are the basis of the business. While they are able to perform their duties and, at the same time, they are improving their knowledge the company will be able to improve its performance what means an increase in profits. Therefore, these new ideas could be used around the world and for any kind of company. Most of time, companies with an excellent workforce could do well in the market and the economy. One of the most important factors within a company is the human capital. Hence it is important to empower employees so that they deliver more value to customers. These ideas can be taken by any company which is interested in improving itself and therefore, its participation in the market. Countries where freedom is accepted by everyone would be the perfect place to take these new methods of management. Besides, countries with a high level of education would be more prone to adapt easier and faster to these strategies since the level of education of workers would be higher and the time to adapt to changes would be shorter than other places. Conclusion Employees First, Customers Second should be seen as a cycle of activity, a journey that begins over and over again. Each time it is played out it comes up with new catalysts that continue to push the boundaries so that the company can change further. This is essential because the world of business is changing in fundamental ways, including rapidly evolving customer needs, greater regulation, a leveling of the competitive playing field and the everchanging nature of risk and ethics. All business leaders are navigating through the multiplicity of forces as never before.

Group Case Analysis What is important is to be alert to the nature of the value zone and be aware of the distribution of power there, as well as be conscious of how accountabilities add value or create obstructions. Above all, be motivated to turn conventional management wisdom upside down and have management serve the value zone.

We have concluded that when people feel passion and responsibility for what they do, not only can they transform a company, they can also transform themselves. Once we transfer the ownership of our collective problems from the supposedly all-powerful CEO to the employees, people want to transform and deal with their professional and personal lives in a very different way than they ever did before. Suddenly, they see the company as their own enterprise. They start thinking like entrepreneurs. Their energy quotient leaps up. And when that happens with a critical mass of employees (usually, 5 or 10 percent is all you need) throughout the company, it creates a kind of fusiona coming together of the human particles in the corporate molecule that releases a massive amount of energy. Chapter 8 Case Introduction With the increased competition and notion of environmental sustainability not fitting well with the giant oil companies, Jose Sergio de Azevedo, CEO of Brazil based oil giant Petrobras since 2005, made up his mind to make major changes in the oil industry. Petrobras wanted to bring a new face and better state both for the company and its workers safety. These changes were a result of the major explosions that caused lives to be taken in the past and all efforts were made to stop and prevent any other oil spills and damage to the ocean. Not only are these

Group Case Analysis precautions being taken for the safety of the employees and everyone involved, but also these steps will be taken to help minimize the damage and the negative effects that Petrobras has had on the environment. With this being said and the specific actions being taken, it is only appropriate for this case to be named what it is and that is Going Green. Case Synopsis Petrobras, an oil based giant, was having a compiled list of disasters, including an oil spill and an explosion, that dumped over 300,000 gallons of oil into the water and also ended up killing 11 employees. Gabrielli, the CEO of Petrobras, recognized this as being a disaster for the company as well as the environment and his plan was to fix these problems and save the company along with the environment.

The way Gabrielli planned to fix this problem was by coming up with steps to increase health and safety security, and by using supplies that were best for the environment. These steps ultimately helped Petrobras move to the top of the worlds leading oil companies and they are still doing well to this day. Analysis What triggered Gabriellis commitment to going green at Petrobras was the company having compiled a troubling history of disasters. The first disaster was in January 2000 when a poorly maintained pipelined spilled oil into Guanabara Bay for two hours before the leak was detected. After that, one of the company drilling platforms blew up killing 11 employees and dumping 300,000 gallons of oil into the

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water. Gabrielli thought this was a huge problem that the company had to deal with. He felt the need to address this environmental threat. Gabrielli was right, as this was a huge threat to the environment. Oil spills are extremely dangerous to organisms. When an oil spill occurs, oil rises to or sits on the surface of the sea while gases are released into the air. Organisms that roam around the sea surface, like seabirds for example, can suffer extreme mortality (Peterson 2012). We believe that Petrobras sustainability effort has been a very successful one and it has helped them move in the right direction. So far, their investments in these different parts of the company have helped them go roughly eight years without a major environmental accident. It has helped them build a good name and reputation among all other oil companies and even the public as a whole. The way the company has sustained itself has helped it to increase its ranking by the private consulting firm, management and excellence, ranked Petrobras as number one among the worlds oil and gas companies for promoting sustainability. What Petrobras has done well in the transformation or in the effort to sustainability are seven key steps thats not just helped them to success but prevented them for falling again. They are Gabrielli Acts. In pursuing the goal, Gabrielli increased the budget the company had for companys health, safety and environment programs. This helped them increase health and safety security for all workers so explosions stop happening which were resulting in the fatalities of some employees. They also used an enormous and big market clout of Petrobras to

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demand that everything supplied by its suppliers were the best of its kind and that they were at the best standard for environmental management. Other actions they took that were beneficial were Gabrielli touring the sites personally to make sure that all employees were complying with the company standard and making sure that he was taking responsibility for all workers and their safety. He also succeeded in moving the new refineries away from gasoline and toward biofuels. Gabrielli endorsed and is the top board of the United Nations Global Compact and last but not least, Gabrielli was able to personally put information about the company and its efforts directly to the public through blogging and other social networks like twitter. We agree with Gabriellis assessment of the success of green policies at Petrobras. In the 2010, Newsweek audit did a ranking of the top green companies in the world; Petrobras scored a 48, which was 84th overall out of the top 100 companies. That may not sound too good, but on the flip side they were ranked 6th overall on the list of oil and gas companies, when five of the bottom ten on the entire list were oil and gas companies. This was really a big step for Petrobras. Going green can gain a significant competitive advantage over competing companies. Ultimately, we will need to bring global emissions down low enough to match nature's ability to absorb them, which may be as low as 10 to 20 percent of today's global emissions. But if a significant number of people change their ways and demand greener products, that will send a big signal to the market, encouraging the supply of green energy, lowcarbon products, organic food and so on (Pearce 2007). Petrobras is making an

Group Case Analysis effort at sustaining the environment and people who buy into sustainability are going to notice these efforts. We think that Petrobras has improved over the years while taking into consideration that they are an oil and gas company. Oil and gas companies will

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never be ranked high on this list because they are natural pollutants. Oil companies shouldnt necessarily take the blame for promoting the use of oil because people are going to drive regardless, so we would rather have drivers using gas that is less polluting. Oil/gas is one of the main causes of pollution, however, compared to all the oil and gas companies Petrobras is doing really well. Conclusion All in all, Petrobras is an organization that was known for doing a lot of harm to our environment. They were never known as a Green organization and never really made a substantial effort to go green until recently. As you can see throughout the reading, through the analysis of Petrobras they have made leaps and bounds of improvements to better themselves and the company as a whole to help limit the negative impact they have on the environment. This Going Green effort has really helped not only them as an organization and their reputation but also has helped all of us without us really knowing, by putting less pollutants into the atmosphere. They have made a huge climb in the rankings of Green companies in the Oil and Gas Industries all the way from near the bottom to the top. And the credit has to mainly go to Gabrielli for setting stricter guidelines and increasing the environmental sustainability budget but as well as all employees for staying with the plan to turn the company around.

Group Case Analysis References Joshi, A. (2009). Interview: HCL technologies. Retrieved from

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http://www.hcltech.com/pdf/news-reports/The-TransformationJourney.pdf Nayar, V. (2010). "Employees First, Customers Second.. WriteForHR, Retrieved from http://www.writeforhr.com/employees-first-customers-second/ PETERSON, C. H., ANDERSON, S. S., CHERR, G. N., AMBROSE, R. F., ANGHERA, S., BAY, S., & ... TAYLOR, C. M. (2012). A Tale of Two Spills: Novel Science and Policy Implications of an Emerging New Oil Spill Model. Bioscience, 62(5), 461-460. Pearce, F. (2007). Why bother going green?. New Scientist, 196(2630), 34-41. Spector, B. (2010). Implementing Organizational Change. Upper Saddle River, NJ: Prentice Hall.