Change Management: Ongc Ltd

Change is a very necessary aspect of human life. One of the few things which have a real permanence in this world is – change. Different types of changes occur, such as seasonal changes, changes in nature and behavior of human beings, changes in their biological and physical systems, organizational changes etc. Here, the main concern of the study is what organizational change is and how it should be managed? What are reasons or causes of change and what is the reaction towards it? The meaning of word change is, “when there is an alteration in the system whether physical, biological or social”. Hence organizational change refers to, “the alteration of work environment or work conditions in the organization”. It may include different components of the organization such as change in technology, organization structure and design, people working in the organization etc (Prasad L.M., 2007).

What is Change Management?

Change management is known as the process of developing a planned approach to adapt to the changes in the organization. It is the transition of an organization or individuals, teams or groups in an organization to reach from a current state to a future state for development and improved performance (Tromley C., Mainiero L.A., 2004). The main aim of this organizational process is to make the employees understand the importance of change according to the rapidly changing business environment and accept it with open minds. This will reduce the risk of failure in implementing the changes in the organization. Though this is practically not possible because every time when there is a change people always have resistance towards it. It is the human tendency that nobody wants to accept change which consequently makes it important to understand the reasons behind it and manage it by reducing resistance towards it. Change is often resisted by the employees because it disturbs their set routines and set new avenues to learn which most of the employees do not want (McCrimonn M., 2008). Change may be planned or unplanned. If the change is sudden because of some external forces such as technological changes or change in the political or legal environment then the organization members has to adopt it forcefully but if the change is done by planning well in advance irrespective of the pressure of external or internal forces then it is called as planned change, which is important to improve the ability of employees to adapt changes in the environment as well as their behavior (Planned Change, 2009, knol.google.com)

Change Management in Public Sector organizations

The current business environment is changing at a very fast pace and all organizations whether private or public are experiencing the impacts of change. It is important for these organizations to understand the role of change management and how to practically implement it (How to Manage Change, 2009,). Public sector organizations are often perceived to be resistant towards change because of the reason to seek the ability to do things rather than doing those things in a different or changed manner. The changes in the socio-economic, political, legal and technological environment has a major impact on the public sector organizations as it the implementation of these changes is a time consuming process. These reform initiatives have made the development of new approaches in the public sector resulting in the introduction of Business Process Re-engineering, new business models, team building and leadership programmes, improved project management etc. This all involves changes in the mindset of the employees which implies the importance of change management in the public sector organizations (UNDP Capacity Development Resource, 2006). Apart from these changes in the external environment the changes in the public sector organizations is mainly due the pressure of the government and global trends. Though the forces or elements of change are almost same in the public and private sector organizations the implementation is far more difficult in public sector. This is due to the different orientation in the values and objectives of both the sectors. The effectiveness of change is dependent on the outcomes which are expected from the change programme (Osborne P.S., Brown K., 2005).

2.3 Importance of Change Management

Change management plays an important role in the organization as bringing change means making alteration in the systematic and planned routine. The task of bringing about change in the organization is not that easy as it involves changing the mindset of individuals and their attitudes towards a particular objective. Changes can be brought about in the organization externally or internally. The process of bringing about change allows the organization to give a proactive or reactive or reactive response in a particular situation (Role of Change Management in an Organization, managementhub.com, 2009). The process of change involves the following steps:

Identify the need or requirement of change in the organization

Designing the specific requirements to fulfill the needs

Making the employees understand that why change is required and what is its importance

Making changes in the organizational processes to incorporate the changes

By following these steps in an organization it can be ensured that the change management strategies will be effective in long run and help in improved organizational performance (Mateco, 2008)

2.4 About ONGC

Oil and Natural Gas Corporation Limited (ONGC) was set up as a Commission on August 14, 1956. The company was given its corporate identity on June 23, 1993, which has now grown into a full-fledged horizontally integrated petroleum company. Today, ONGC is a flagship public sector enterprise and India’s highest profit making corporate, achieving the record of being the first Indian corporate to register a five digit profit figure of Rs. 10,529 Crore in the year 2002-03.

ONGC has produced more than 600 million metric tonnes of crude oil and supplied more than 200 billion cubic metres of gas since its inception, thus fuelling the increasing energy requirements of the Indian economy. Today, ONGC is the most valuable company in India, contributing 77 percent of India’s crude oil production and 81 per cent of India’s natural gas production.

To sustain this growth, ONGC has drawn up ambitious strategic objectives, which include doubling the oil and gas reserves. Having accreted six billion tonnes oil and oil equivalent reserves in its first 45 years of operation, ONGC now aims to double these reserves by 2020. The second strategic objective is to augment the global recovery factor from the existing 28 per cent to the global norm of 40 per cent in next 20 years.

Out of the six billion tonnes of oil and gas reserve accretion, four billion tonnes is expected to come from Offshore and Deep Waters. To improve the recovery factor from the existing fields, ONGC is investing Rs. 2,000 crore in 15 re-development schemes.

2.5 Corporate Ranking

Ranked 326th in Financial Times Global 500 List by market cap; first among Indian Corporates

Ranked 133rd in Forbes 400 Top Global Corporates by market cap; first among Indian Corporates

Ranked 1st in Economic Times 500 Corporate List by net profit and market cap

Ranked 1st in Business Today 500 List by net profit

Ranked 1st in Business Today-Stern Stewart Study of 500 Indian Corporates for highest-ever Market Value Added (MVA). ONGC is the only PSU which has both MVA and EVA positive.

3. Aims and objectives of the Study

The aim of this study is to understand the concept of organizational change, forces of change in the organization and how manage that change and overcoming resistance of the employees in context to the ONGC Ltd. which is a PSU. Change management plays an important role in the Indian organizations because if there would be no change then the growth trajectory of any organization will become constant and progress of the employees would be restricted what they had learnt in the past. So, this study will help to understand the importance of change management in the public sector organizations and the effective approaches to manage those changes.

3.1 Aim

To understand the change management approaches being implemented in ONGC and help in overcoming the resistance towrads change.

Objectives

The objectives of this study are:

To understand the forces of change in public sector organizations.

To analyze the various factors causing changes.

To study the reasons of resistance towards change.

To suggest measures for overcoming resistance towards change.

To study the importance of change management

To suggest prevalent approaches of change management

4. Review of Literature

What Is Organizational Change Management?

The concept of organizational change refers to the organization as a whole rather than making smaller changes such as adding a new employee, modifying a programme or a schedule. The examples of organizational change may include change in mission, restricting or reforming of operations or management, some major technological changes, changes in government rule and policies etc (McNamara C, 2005). According to Newstrom and Davis change in any part or function of the organization brings about a dynamic change in the whole organization. It tends to disturb the old equilibrium necessitating the setting up of a new one. The type of new equilibrium depends on the degree of change and its impact on the organization. It is a continuous process which requires subsequent changes in whole organization (Prasad L.M., 2007). The changes could be due to some external or internal factors because of the dynamic business environment. The forces of change are:

Nature of the workforce

Technology

Economic and Social Environment

Political and Legal environment

Globalization

Competition

Successful change must be brought about by top management and to manage these activities a change agent plays an important role. A change agent could be a manager or a non manager and his responsibility is to translate the change into a plan and carry out the plan. If the change is carried out in a team or a group the resistance would be low and chances of acceptance would be high (Robbins S. P., Judge T., 2008).

4.2 Resistance to Change

Whenever change is initiated, both the managers as well as employees react to it. Though human reaction to change depends on the outcome of change, but the attitude of people play an important role in determining it. There are possibilities of either accepting the change, being indifferent towards it or a strong resistance to change. People normally resist to change because they perceive that change as a threat or feel difficult to cope with it (Kotelnikov V., 2001). Sometimes resistance to change is good because if there would be no resistance and employees will accept the change then the changes of progress in an organization would reduce. At the initial phase of change, employees may react differently. Sometimes the resistance is instant and spontaneous. It easy for the management to deal with this type of resistance. Implicit or slow resistance is difficult to manage because it may have different after effects. The employees may leave the organization, become less committed towards the work, lack of motivation may occur which sometimes becomes difficult to recognize (Robbins S. P., Judge T., 2008). Overcoming the resistance to change can be brought about by seven ways in an organization

Education and communication

Participation

Building support and commitment

Negotiation

Manipulation and cooptation

Selecting people who accept change

Coercion (12manage.com, six change approaches)

Approaches to Change Management

There are various approaches adopted by organizations to manage change. Some of them are:

Lewin’s three step model – In a model suggested by Lewin he has given three steps of change: unfreezing the status quo, movement to a desired end state and refreezing i.e., new change to make it permanent.

Kotter’s eight step plan – Based on Lewin three step model Kotter has suggested an eight step plan for implementing change.

Action research – It refers to a change process based on the systematic collection of data and then selection of a change action based on what the analyzed data indicates.

Organization development – It is a collection of planned change interventions build on humanistic democratic values, that seek to improve organizational effectiveness and employee well being. The six interventions used in OD are:

Sensitivity training

Survey feedback

Process consultation

Team building

Intergroup development

Appreciative inquiry (Robbins S. P., Judge T., 2008).

5. Research Methodology

Data collection methods

Secondary Research

Secondary research is the data collected from secondary sources like Online Web Portals, Magazines and published Journals, among many others. The review of literature is a comprehensive analysis of the research already collected on the concerned topics. While collecting the secondary data, we will ensure the following:

Reliability

Suitability

Adequacy

Primary Research

Primary research is the collection of data that is not already available. The process is designed to serve a specific set of objectives useful for the study. The data is collected through various methods such as interviews, focus groups, questionnaires, online surveys, etc.

For this study, we have chosen suitable methods of primary research to learn about the objectives of the study:

Quantitative Research:

It refers to the data that is numerical, and can be measured and expressed in terms of numbers. The most popular form of quantitative research is the questionnaire/survey method.

The survey will be conducted with the employees working in ONGC Ltd.

Research Design

The study will be explorative as well as descriptive in nature.

Sampling design

Target population:

The target population in this research refers to the employees working in ONGC. The respondents can be of any gender and any income level.

Sampling unit

The sampling unit is ONGC Ltd.

Sampling method

For this research we use non-probability sampling. Zikmund (1997) stated that in non-probability sampling, the probability of any particular member of the population being chosen is unknown. The element in the population does not have any probability attached to their being chosen as sample subjects.

Size of Sample Survey

A sample size of 250 respondents will be considered for this study.

Sampling plan:

The data will be collected from employees working in the organization.

Questionnaire Design:

The questionnaire will consist of both open-ended and close-ended questions. The questions will be framed to enable respondents answer the questions like an “essay”. There is no limit on how much the interviewee wants to say on a particular topic.

Data Analysis and Interpretation

The data collected from primary research will be analysed and interpreted using Factor Analysis. It is suitable to the study over other tools, because:

It provides both subjective as well as objective results, of which subjective can be converted into numbers/scores

It can be used to identify and understand the hidden attributes or constructs which would otherwise (in case of direct analysis) have been unapparent

It is inexpensive and easier to implement than other tools.

6. Significance of the study

The findings of this study should be useful to the top management of ONGC Ltd. as they would be able to understand the causes and effects of change on the employees and the reasons of resistance towards it. It would be easy for them to understand the plight of employees while adapting the change in their system and is it really effective or not.

The findings of this study should also provide an insight to the employees in finding out ways in coping with change and understanding its importance for their professional growth. Finally, the findings from this study might add some useful information to the research already being conducted in this area which needs to be highlighted so that the employees as well as the management will understand the better approaches to adopt changes and plausible solutions to this problem.

7. Limitations of the Study

The study will be limited to the employees working in ONGC as the researcher is specially focusing on the implementation of change management in public sector organizations. The approaches would be limited to the reasons of changes and then its implementation particularly in ONGC.

8. Organization of the paper

Explains the chapterisation plan of the actual thesis. It basically consists of five chapters:

Introduction – It includes the introduction to change, change management in public sector organizations and it importance.

Review of Literature – It includes the research on organizational change, forces of change, resistance to change and how to overcome resistance, change agents etc.

Research Methodology – It includes the research design, sample size, sources of data collection, questionnaire etc.

Data Analysis – It gives the results and interpretations of the data collected and analyzed from the respondents.

Conclusion and Recommendations – This chapter will give the conclusions and recommendations which will come from the respondents and strategies which could be employed by the organizations.