Academic journal article Indian Journal of Industrial Relations

Corporate Transformation or Cosmetic Makeover? Case of a Public Sector Bank in India

Academic journal article Indian Journal of Industrial Relations

Corporate Transformation or Cosmetic Makeover? Case of a Public Sector Bank in India

Article excerpt

Introduction

"Chains of habits are too light to be felt until they are too heavy to be broken"

Warren Buffet

Warren Buffet's words reinforce the antediluvian fact that change is the only constant. The current paper intends to present data collected over a period of time in an Indian public sector bank (PSB). A longitudinal study in India's leading PSB is inspired by the change scenario in the banking industry. The banking industry in India, due to changes in economic conditions and continuous deregulation, is currently in the stage of a turnaround (George & Hedge, 2004). The challenge is much higher in magnitude for public sector banks due to the competition from private or multinational banks. There are 27 nationalized and 27 foreign banks in India (Goyal & Joshi, 2012).

Managing change is much more challenging than deciding what needs to be changed. Authors such as, Worrall, Cooper & Jamison (2000), Ryan et al. (2008), Fronda & Moriceau (2008) have conducted longitudinal studies in public sector organizations and pointed out that, public sector organizations respond to the changing demands of the environment. However, mostly changes were top driven, hence organizations faced difficulty in winning employees' hearts.

Any change, whether it relates to strategy (Black & Lynch, 2004), technology (Bell et al., 2006), finance (Broadbent et al., 2001), marketing (Farrell, 2000) or logistics (Chapman et al., 2003), is invariably aligned with the people who act as the initiators of change, change agents and perhaps even victims of change initiatives. People create social fabric of the organization, which is popularly labeled as Organizational Culture (OC) in management literature. Since culture is considered as the backbone of institutionalizing change in the organization, the following section takes a deeper look at culture.

Culture at the Core of Change

Culture does not change because we desire to change it. Culture changes when the organization is transformed; the culture reflects the realities of people working together every day.

Frances Hesselbein (1999: 6)

Employees in PSBs tend to have a deeply entrenched behavioral culture which impedes change rather than facilitating change.

Due to the decades of relationship with the organization, employees in PSBs tend to have a deeply entrenched behavioral culture which impedes change rather than facilitating change. When the organizational culture is aligned with the prospective or planned changes, these changes might be embraced with enthusiasm and implemented quicker. Schraeder et al. (2005) shares one such positive case where, in public sector, change in the culture was brought in by training and leading by example. Opposite is pointed out in many studies where organizational changes were implemented without focusing on OC change (Balthazard et al., 2006; Holbeche, 2006; Cameron & Quinn, 1999). In fact, OC is an important aspect of the planned change process (e.g., Burke, 1995). According to Burke and Litwin (1992) and Burke (2002), "Organizational change, which is an overhaul of the company's business strategy, stems more from environmental impact than from any other factor. Moreover, in large scale or total organizational change, mission, strategy, leadership and culture are more important than structure, management practices and systems. Cultural change has to be planned and aligned along with strategy and leader's behavior."

Theoretical Framework: Organizational Culture

Since this is a longitudinal study we intend to refer to a similar theoretical framework, that is, Schein's framework to study the impact of organizational change. The study endeavors to ascertain the extent and depth of change in an Indian public sector bank by undertaking a five year longitudinal study. Schein (1985, 1990) indicate that "Culture is what a group learns over a period of time as that group solves its problems of survival in an external environment and its problems of internal integration"; he emphasizes that "such learning is simultaneously a behavioral, cognitive and an emotional process". …

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