1.

Introduction

To be a successful company, with the changes in the business environment, and

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business culture, the organization must adapt to these changes in order to succeed.

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The organizational change can translate into new beginnings, breakthroughs, and

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opportunities. Organizational change is a management strategy especially when

organizations experience many uncertain challenges. Leaders must lead their

employees, with specific management models, to adjust the psychological quality of

employees and repeat the corrections before they can achieve results.

Founded in 1977 by three universities, India Telecom Ltd (ITL) switched to producing

motherboards, CPUs, and Keyboards in 1982. However, with the expansion of

production scale, ITL has faced problems such as lack of talent, excessive overtime

work and insufficient rest. The following essay will analyze the important points of

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the organization in making a successful change.

2. Danification of Force Field Theory

Kurt Lewin's Force Field Analysis is a powerful strategic tool that can help us

understand the incentives and constraints faced by enterprises and the three university

students who founded ITL. Kurt Lewin borrowed the process of the changing shape of

an ice grain to show that successful reform must take time and pass three stages,

namely Unfreeze, Change, and Refreeze. The Force Field Theory is suitable for

making decisions and communication in business, by promoting balance between the

power of change and other forces that resist change. In order for changes to occur, it is
necessary to strengthen the driving force or weaken the resistance. (Lewink, 1951)

2 The Founders Were Facing Driving and Restraining Forces

2.1 The Environmental Factor

In the 1980s, there were drastic changes in the global culture which was accompanied

by the emergence of the IT industry and the personal computer. Between 1985 and

1991, as large multinational companies moved from manufacturing mainframes to

client-server systems the global hardware prices collapsed and India’s import

licensing policy was lifted as software programming service requirements accelerated

(Athreye S S, 2005). The driving force faced by the three CEOs and external

environment prompted ITL to transform its business strategy from providing software

solutions to manufacturing hardware OEMs (The Change Masters, 1984 By Rosabeth

Moss Kanter)

Besides, the demand for outsourced services and service industries had driven the

rapid development of software. Software development can be broadly divided into

custom-developed software and packages or general-purpose software products.

Custom software development involves close interaction between the development

team and the end user. Typically, software companies that offer custom software focus

on specific vertical market segments or sectors such as retail, banking, and

manufacturing. Therefore, the demand for software products in the service industry

has placed demands on the transformation of ITL.

Software development requires professional talent, and by the late 1980s, there were

approximately 150,000 English-speaking engineers and science graduates in India,

with limited demand for services in other economic sectors. By the late 1980s, India’s

economic liberalization was also going smoothly at a time when the information

technology revolution in developed countries had begun to take root, and the shortage

of skilled programmers and IT professionals had begun to develop (Arora A,

Arunachalam V S, Asundi J, et al.).

Therefore, in order to cope with the change of business, ITL increased the recruitment

of relevant technical personnel, and increases the cost of investment in R&D

production, while the total profit margin of hardware production is 10% lower than

the software profit. This is precisely the resistance they face in response to changes in

industry demand and business policies.

2.2 Internal Management

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ITL's CEOs lead in an authoritarian style where they dictate the companies policies,

goals and procedures with little or no input from subordinates. It is well known that

management style determines the working method, and ITL management style has

centralized decision-making, limited participation and low autonomy for subordinates.

According to leadership behavior theory, this is the University of Iowa's leadership

style (Lewin et al,1939).

This style of management leads to a lack of communication with employees and

management's indifference to business and production orientation. In such situations,

employees often work overtime, and without breaks, work becomes challenging. In

2010, ITL faced a large number of employee turnover and low productivity. To make

matters worse, some customers complained that ITL's product quality failed to meet

compliance requirements and that product delivery was often delayed. Similarly,

India's software services face two major and closely related challenges. First, it is

difficult to attract and retain talented software professionals. Second, it has become a

challenge to maintain low-cost production in an environment where labor costs are

rising rapidly (Arora A, Arunachalam V S, Asundi J, et al.). In order to find a more

practical and effective management model to solve the aforementioned problems, they

authorized Mr. Monal Singh to lead the transformation of ITL and gave him great

support. The management structure will change from the former centralized to the

decentralized structure. This is the first major change in the traditional management

culture of CEOs, which is a new challenge for the traditional Indian culture that has

always been male-dominated.

They are facing the impetus to change to a more decentralized business model. In

order to improve the overtime work and the issue of persuasion, the production

department began to implement mechanized operations, which required investment in

mechanical equipment to improve production efficiency. At the same time, ITL

provided on-the-job training for employees with a total investment cost of 60Lakhs.

However, there are still many uncertainties in these changes, so it is inevitable that

there will still be obstacles and concerns in each person's mind.

2.2 The Department heads Were Facing Driving and Restraining Forces

The heads of ITL departments took a positive attitude in facing these issues. First, Mr.

Monal Singh, the head of the human resources department, set up a team to conduct

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in-depth investigations of department heads and listen to the needs of employees. In
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the end, they identified key issues, including but not limited to employee incentives,

management structures, and production technology processes.

After several communication meetings, Mr. Monal Singh became the main

implementer of the ITL transformation plan. In the management structure, the leaders

of various departments took the initiative to assume the decision-making power of the

department. The development of management plans, policy release and

implementation are inseparable from the efforts and communication of the department

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heads, which results in more responsibility and work. This change plan was initiated
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by the heads of various departments and required the cooperation of all departments.

Mr. Monal Singh also made major and significant changes to the production sector.

First, the production process was changed from manual to automated production,

which mitigated the issue employees' long work hours and lack of rest. In addition,

the mechanized operation was definitely the best way to improve production
efficiency and directly solve the problem of delayed deliveries. In addition,

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mechanization has also enhanced ITL's reputation as a market leader in technology

research and development, thereby attracting a large number of high-quality talent. At

the same time, providing employees with 6 months of on-the-job training has

improved their self-confidence and increased their, income and quality of life, which

has created a sense of belonging to the company.

2.3 The Staff were Facing Driving and Restraining Forces

In terms of employees, the above changes are both a promoter of change and a

hindrance to change. In fact, people have a lot of emotions about changing the status

quo. On the one hand, learning new technology training can increase the value of

individuals, and it can also increase the chances of getting a higher income so that

employees will fully support it. On the other hand, the new management model takes

time to adapt to and gain acceptance. Employees may develop negative reactions to

change, including fear and anxiety about an unfamiliar working environment.

Mr. Monal Singh developed a five-year reform plan for ITL. The plan was divided

into two parts: the automated production process and the decentralized organizational

structure. The organization decentralized the authority, as well as the day-to-day

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management of each department which was relegated to the heads of each department.

In 2013, a survey of the employees revealed that 80% of employees were satisfied

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with the changing working conditions t, which meant that ITL had made positive and
successful changes. As Kurt Lewin said, when the driving force is stronger than the

binding force, the status or balance will change.

3. Organizational Culture

3.1 Cultural background: caste system and traditional thoughts of patriarchal

As a unique form of Hinduism, the caste system is rigidly hierarchical. It divides

people into different classes and separates them from each other and strictly maintains

the power distance between different classes. Although the system has been legally

abolished, it still prevails in the mainstream and it continues to exert influence on

Indian society. (Eshighi, Abdolreza, Roy, Sanjit Kumar, Ganguli & Shirhendu, 2008).

The Indian caste system defines the power of individual Indian citizens at birth,

making it impossible for individuals to change the caste that they were born in.

Members of the lower caste are not allowed to move up the career ladder thus are

destined to remain poor. In addition, the caste system has strict rules on the choice of

individual occupation with those from higher castes enjoying prestigious occupations

and vise versa.

In addition, India's male chauvinism is a negative factor affecting management change.

(Lori, Rohini, & Alexandra, 2012). It emphasizes that everyone should be

independent, rather than trying to gain a higher social status in vain. This religious

culture not only limits the ideological derivative of reform but also increases the

anxiety of employees and the rejection of change.

The traditional ideology in India is part of the cultural background. Female workers

are often treated unfairly because of their low social status, which makes them more

likely to seek stability rather than innovation in the workplace. It is said that the

companies spend millions of dollars each year to increase profits by implementing

new processes, updating systems and acquiring companies. Employee resistance has a

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negative impact on productivity, employee morale and increases employee turnover.

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Hofstede cultural dimensions would apply to the transformation of ITL. Professor
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Geert Hofstede did extensive research in six areas of national culture. And the score

of the cultural dimension in India is also very accurate, which is a good confirmation

of the cultural environment of ITL development.

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The Indian society is highly unequal in terms of power and wealth. Managers need to

rely on team members' compliance, and employees expect organizations to clearly

indicate their responsibilities and expectations. Besides, India is a patient country with

a high tolerance for mistakes. Indians usually do not feel driven or forced to take

action and feel comfortable accepting the established procedures and practices

although they may be problematic. People in cultures with low to medium uncertainty

avoidance tend to value risk, seek change rather than avoid it, and they often exhibit

the high tolerance for differences or mistakes.

Taking Power Distance as an example, the industry's caste system has widened the

distance of the ordinary class from power. This also explains why the management of

the early ITL was the responsibility of the three CEOs (Hofstede G, Bond M H.)The

sense of distance between the middle managers and employees meant that employees

did not feel responsible for even the most basic of the company's operations. In

addition, India has a lower Masculinity versus Femininity, which means that India has

a higher tolerance in the face of change and error. They can accept the mistakes and

difficulties after the change, which also creates a good external environment for the

change. Therefore, the resistance of employees in the process of ITL change is not so

obvious, so taking risks is also one of ITL's organizational cultures.

3.2 The importance of cultural background

It is important for ITL to take culture into consideration when implementing change

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because culture can shape behavior. Culture determines how members of the

organization behave, whether they are positive or negative, active or passive. It is well

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known that behavior is not shaped by external and internal motivating factors, but by

values, beliefs, and assumptions. India’s culture makes people to passively obey the

dominant power, which also makes the staff of ITL mostly obey superiors and leaders.

In addition, employee training is also promoting or cultivating employees' sense of

belonging, enabling them to learn new skills more actively and proactively, so as to

achieve the goal of raising income and living standards. Besides, ITL's culture is

better than others, which helps ITL change the operational dilemma and accelerate the
transformation of the business.

4. Evolutionary or Revolutionary Change?

Change should be planned. As such Nayak and Maclean (2013) argue that change is a

strategy in management when based on predicting future trends in the industry. We

can see that almost all successful organizations have undergone relatively long-term

changes, which may be caused by changes in both the internal and external

environments of the organization. Similarly, (Tushman $ O'Reilly, 1996) indicates that

organizational change may be triggered by the technological revolution, competitors,

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regulations, or changes in the economic and political environment. Pioneering change

can be triggered in a relatively short period of time, but many of the processes of

change are often tortuous (Gillies & Smith, 1994). In addition, Gersick (1991) pointed

out that because of the need for change and the integration of institutions, resources

and current environment of organizational history, the effects of change have great

uncertainty.

The changes in ITL are organizational evolution, not a revolution. In a relatively short

period of time, the managers must constantly increase the flexibility and adaptability

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of organizational strategy and culture. Tushman and O'Reilly (1996) point out that
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such behavior is a manifestation of organizational evolution. The ITL founders must

assess the pressures of business operations and capital investment, as well as the

burden of India's traditional thoughts like male leadership and dominance. Therefore

decentralization is a challenge for India’s patriarchal society. As a result, they began

to focus on the gradual improvement of internal management, seeking product

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operations, customer satisfaction, and employee well-being improvement.

The change in ITL is applicable to the Kotter’s Model. Large-scale change mainly

includes 8 steps, such as building a sense of urgency, organizing a strong guiding

force developing a vision and strategy, communicating a vision, fully empowering

employees to realize a vision, harvesting short-term results, consolidating results and

creating further changes, and institutionalizing new methods. ITL has achieved the

eight steps of Kotter’s Model in the process of change, especially in the stage of

feedback on short-term results and employee empowerment. Change is usually a slow

and gradual process, and its effectiveness is not obvious at a particular stage. However,

if this situation persists for too long, it will cause some psychological pressure on the

members of the organization to make them doubt the result of the change. Therefore,

change leaders need to create short-term results in a timely manner, affirming that the

purpose of the change is to inspire employees' confidence (Kotter, 2012).

Adequate empowerment is a necessary part of a successful transformation in an

organization. If the members of the organization that specifically implement the

change measures lack the necessary power, they will have difficulty in exerting their

work and have to defend themselves with the necessary defenses, which can easily

lead to the spread of frustration and thus hinder change (O'Toole, 1995). For instance,

ITL empowered subordinates to lead the change and gave them support. They

delegated authority to the departmental leaders of and allowed them to control the
operations of their departments, which was a challenge to traditional social concepts

and management models. ITL leaders also reinforce employee engagement by

encouraging openness and reciprocity. The company has designed action plans to

make employees feel more responsible for the company's products while allowing

them to advise higher-level executives. In addition, ITL leaders began to empower

employees with the aim of translating their participation into action, although this

challenged Indians' adherence to the hierarchical system. After the change, ITL

employees can also report their opinions and problems to department heads for

mitigation.

5. Centralized and Decentralized structures

Centralization refers to the decision-making power whereby only the top management

retains the ability to make decisions.in centralized organizations decisions come from

the highest in the hierarchy while subordinates have little or no say in the running of

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the organization. In a centralized organizational structure, power is concentrated in the

highest leadership, and the highest leader has the power to make decisions.

Centralization is influenced by history and culture, leadership personality, policy

unification and administrative efficiency. Unlike in a centralized organization,

Siggelkow & Levinthal (2003) point out that in decentralized organizational

leadership, organizational decision-making authority is scattered in the lower layers of

the organization. That is to say, power is not concentrated in a certain member or few,

but is scattered within the organization. (Siggelkow & Levinthal, 2003)

There are many advantages to centralization. First, a centralized organizational

structure can quickly communicate organizational policies and issue superior orders,

reduce information asymmetry, and facilitate organizational planning and goals.

Secondly, the centralized organizational structure can focus on the organization's

resources and power to highlight organizational specialization, while improving the

company's emergency response capabilities. However, centralization of power is not

conducive to the individualized development of the organization which results in a

low organizational atmosphere and lack of vitality. The relative concentration of

power in senior management leads to over-reliance on superiors for direction by

subordinates, which further leads to employees' lack of creativity and enthusiasm for

their work. (NibeditaDas, 2000)

The decentralized organizational structure ensures that subordinate level leaders have

autonomy in their jurisdiction, and they can bring together different perspectives and

wisdom. Decentralized organizations can fully mobilize the enthusiasm of their

subordinate leaders, so they can analyze the key points of the problem from the actual

situation and make full use of the characteristics and resources of the organization (K.

Sriramesh, 1992). However, the decentralized organizational structure leads to the

autonomy of individual departments of the organization, which deepens the

contradictions between different levels and departments within the organization. The

decentralized organizational structure leads to the limitation of the management's

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vision, this can hinder the attainment of the overall goal of the organization and is not
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conducive to the Long-term development of the organization

The changes in ITL apply to the theory of goals, and the direct leaders of followers let

them know what the organization expects from them. Successful leaders are friendlier

to the subordinates and show concern for them. The behavior of the leader is critical

to the performance of the employee because the leadership style directly affects the

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subordinate's perception and recognition of the goal (House & Mitchell, 1971). In

light of the current developments at ITL, the decentralized organizational structure is

more suitable for ITL. In the decentralized organizational structure, ITL employees

and middle managers have the right to make decisions independently, which can

promote the personal development of employees as well as the creativity and

enthusiasm of employees. After the ITL revolution, the leaders of the department have

the power to make decisions, so everyone in the department has the opportunity to

contribute in decision making, and the leaders are more willing to listen to the

employees' suggestions Even though different perspectives might collide with each

other, it can promote a creative atmosphere within the organization. Most importantly,

the decentralized organizational structure reduces the dictatorship and employee

dissent.

6. Conclusion

All in all, we analyzed the supporting and opposing forces of ITL reform utilizing

Force Field Analysis. In addition, we learned the organizational culture of ITL and
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proved its change was an evolution caused by changes in the internal and external

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business environment. Finally, we discussed the merits and demerits of centralization

and decentralization and found that a decentralized organizational structure is more

suitable for the current development of ITL as it can help promote innovation,

proactivity while promoting employees’ sense of belonging to the organization,

thereby increasing productivity. While decentralization has its advantages such as

quick decision-making, caution should be taken on what decisions lower level leaders

can make for their goals might contradict those of the organization. Furthermore,

while autonomy may promote enthusiasm and creativity there is an increased risk of

disagreement between various departments as well as with the top leadership.

Therefore it is imperative for top management to maintain oversight of the

autonomous departments to make sure they work harmoniously towards the

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organization's overall goals, which can be achieved through open and constant
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communication among departments and with the top leadership. In addition, it is Commented [G32]: Deleted:n

important to understand the influence of culture on the organizational environment,

and that people are resistant to change. Thus any changes to the organization's

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structure should be gradual to avoid shock and anxiety among employees.
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