MAHATMA EDUCATION SOCIETYS PILLAIS COLLEGE OF ARTS,COMMERCE & SCIENCE Dr.K.M.

Vasudevan Pillais Campus, Sector-16, New Panvel

A PROJECT ON To Study Management of Change -L&T In the subject Strategic Management

SUBMITTED TO UNIVERSITY OF MUMBAI,

FOR SEMSTER-II OF MASTER OF COMMERCE-I BY

Akshaykumar Chavan Roll No-(1902)

UNDER THE GUIDANCE OF Prof.SEEMA SOMANI Year-2012-13

MAHATMA EDUCATION SOCIETYS PILLAIS COLLEGE OF ARTS,COMMERCE & SCIENCE Dr.K.M.Vasudevan Pillais Campus, Sector-16, New Panvel

DECLARATION BY THE STUDENT I, Akshaykumar Chavan student of M Com Part-I Roll Number 1902 hereby declare that the project for the paper of Strategic Management titled, Management of Changesubmitted by me for the Semester-II during the academic year 201213, is based on actual work carried out by me under the guidance and supervision of Prof.Seema Somani I further state that this work is original and not submitted anywhere else for any examination.

Signature of Student

EVALUATION CERTIFICATE This is to certify that the undersigned have assessed and evaluated the project on Management of Change submitted by Akshaykumar Chavan student of M com Part-1. This Project is original to the best of our knowledge and has been accepted for Internal Assessment.

Internal Examiner
Prof: Seema Somani

External Examiner

Principal

PILLAIS COLLEGE Internal Assessment: Project 40 Marks Name of the student First Name: Akshaykumar Father Name: Nandkishor Surname:Chavan Class M COM PART I Division Roll number 1902

Subject: Strategic Management Topic for the Project: To Study Management of Change-L&T Marks awarded DOCUMENTATION Internal Examiner (Out of 10 Marks) External Examiner (Out of 10 Marks) Presentation (Out of 10Marks) Viva and Interaction (Out of 10 Marks) TOTAL MARKS(Out of 40) Signature

Acknowledgment

I have taken efforts in this project. However, it would not have been possible without the kind support and help of many individuals and organizations. I would also like to extend our sincere thanks to all of them. I are highly indebted to L&T for their guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project. I would like to express our gratitude towards our parents & member of L&T for their kind cooperation and encouragement which helped us in completion of this project. I would like to express our special gratitude and thanks to industry persons for giving us such attention and time. My thanks and appreciations also go to our colleague in developing the project and people who have willingly helped me out with their abilities. I specially appreciate Seema Mam for giving us this project which helped us to know more about the organiztion

Change of Management of L&T Introduction

The only constant is change, continuing change, inevitable change that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be. Isaac Asimov And this is true in the context of business or project management as well. Change happens continually; and how well a business can manage these changes plays a significant role in its

success or failure. With globalization and advancement of technology, change management has become more important than ever before. Here we are going to take a look at why having an efficient change management strategy and process is so important for the success of any project or business.

Meaning and Important Concepts

The business landscape of the 21st century is characterized by rapid change brought about due to technological, economic, political and social changes. It is no longer the case that the managers and employees of firms in this decade can look forward to more of the same every year. In fact, the pace of change is so rapid and the degree of obsolescence if organizations resist change is so brutal that the only way out for many firms is to change or perish . In this context, it becomes critical that organizations develop the capabilities to adapt and steer change in their advantage.

The role of senior managers becomes crucial in driving through change and ensuring that firms are well placed with respect to their competitors. However, it is the case that in many resist change and in fact thwart change initiatives subsequent sections. This essay

organizations, senior managers actively

due to a variety of reasons which would be explored in

examines the barriers to change by senior managers and discusses approaches to mitigate such resistance. The essay begins with a discussion n the role of senior managers as barriers to change and then outlines some approaches on how to get the senior managers on board for change. It goes without saying that he who rejects change is the architect of decay and the only human institution that rejects progress is the cemetery. With this axiom in mind, it is critical to understand that unless change is actively embraced, organizations in the 21st century risk obsolescence. To resist change is as basic as human nature and hence the change managers must adopt an inclusive approach that considers the personality clashes and the ego tussles. It is often the case that in large organizations, there tend to be power centers and fiefdoms and hence the issue of organizational change must address the group dynamics as well as the individual behavioral characteristics. Only by an understanding of the means by which managers can be brought on board can there be a foundation for suitable approaches. The approaches include a combination of pressure tactics and coordination instead of competition and cooption as well as cooperation. Change agents must realize that wherever possible, they must deal with consensual decision making and if that

is not possible, they must walk the talk and be firm in their approach. Managers at all levels have a tendency to resist change and in the high stakes game of change management, it is the ones that can articulate and communicate the change in a clear and coherent manner who succeed. In conclusion, change is the only constant in business and the landscape of the 21st century is littered with companies that have not adapted to the changing times.

Reasons for Change Management

Change management is a multifaceted area that has several definitions. Depending upon what the particular situation requires, this way of coping involves an individual's ability to look back at previous experiences with a sense of structure, as well as coping with the problems associated with it for the very first time. This area is defined in several ways, beginning with a specialty area of practice, a method of control, it's two necessary definitions, and what it contains. Each of these definitions explains the reason why this area of expertise is a necessity, and how it can be used to create harmony in your organization.

A Specialty Area of Practice

You will find many consultants who offer independent services in the management of change for their clients. The title they use to describe their services, whether they say they use change management practices or are agents of this difference, points to companies that do not have any internal leader to guide their employees in the affects of the differences they are approaching or

have already had experience with. These consultants come in droves of hundreds and may either help their clients to take the necessary steps needed to grow, or to systematically handle the steps that are yet to come.

A Method of Control
Being ahead of the curve is an important step in that, so ensuring that a company has the latest systems and technology to keep track of what differences need to occur is a must. Most people in these fields are familiar with version control, and the name change management has been a new label. Companies have various areas where controls exist that are much like it. There are many requirements imposed on companies for keeping track of any differences in the system, and many companies are familiar with the processes and what is necessary to continue to maintain running smoothly.

Two Definitions of Change Management

When the political and social structure is unstable, and the tides of the economy are shifting, legislation makes new rules or the actions of competitors create the need to do something different, these are all situations that a company cannot control. This is also the first definition of change management which involves the surrounding environment that a company cannot manage. The second definition is a company's ability to make these differences occur based upon their own managed, planned or systematic methods.

Two Reasons Why Change Management is Necessary

Change is inevitable this is something learned in life and in business. But, important and unstoppable as it is, it can also be very stressful. Most organizations who have gone through change can attest to the troubles they experienced with it. This is where change management comes in and it is the reason why it is so important to business transitions.Here are two big reasons why change management is necessary:

It Is Going Make Change Go Smoother

Change can be a turbulent time for a company. Change management tools can help decrease the stress and make things smoother for the people involved. In fact, it is one of the main goals of the process. This includes taking things a step at a time. It should also involve proper planning and goal setting. Each goal set needs to be realistic, time oriented, and specific. Planning and taking action is also necessary because without it, plans are going to go nowhere.

It Provides Employee Support

Employees are often the ones who are most affected by change. They will require training, especially when the company is introducing a new business strategy or if new equipment is brought in. Support is necessary and it involves helping individuals cope with the changes better. It is also going to help increase the percentage of buy-in among employees. A great buy-in is necessary if organizational change is to succeed. Without it, companies are only going to be met with a lot of resistance and negativity from their workers. Termination and hiring, in relation to transition, can also be handled with the help of a change management group. For companies that focus on providing services, change management can also make it so that clients are provided the support they need. There may be transitions in how things are processed and clients do need to be made aware of these changes.

Introduction of L&T

Larsen & Toubro Limited, also known as L&T, is an Indian multinational conglomerate headquartered in Mumbai, India The company has business interests in engineering, construction, manufacturing goods, information technology and financial services. L&T is India's largest engineering and construction company with a dominant presence in India's infrastructure, power, hydrocarbon, machinery, shipbuilding and railway sectors. In recent years, L&T has expanded its global presence and international projects contributed 9% of its overall order book for the 201011 period. Considered to be the "bellwether of India's engineering sector", L&T was recognized as the Company of the Year in 2010. L&T has featured four times in Forbes Fab 50 list of the best public companies in the Asia-Pacific region. In 2012, Forbes magazine ranked L&T the world's 9th most innovative company, ahead of Google and Apple Inc.

History
The company was founded in Mumbai in 1938 by two Danish engineers, Henning HolckLarsen and Sren Kristian Toubro. The company began as a representative of Danish manufacturers of dairy equipment. However, with the start of the Second World War in 1939 and

the resulting restriction on imports, the partners started a small workshop to undertake jobs and provide service facilities. Germany's invasion of Denmark in 1940 stopped supplies of Danish products. The war-time need to repair and refit ships offered L&T an opportunity, and led to the formation of a new company, Hilda Ltd., to handle these operations. L&T also started two repair and fabrication shops signalling the expansion of the company. The sudden internment of German engineers in India (due to suspicions caused by the War), who were to put up a soda ash plant for the Tatas, gave L&T a chance to enter the field of installation. In 1944, ECC was incorporated by the partners; the company at this time was focused on construction projects (Presently, ECC is the construction division of L&T). L&T decided to build a portfolio of foreign collaborations. By 1945, the company represented British manufacturers of equipment used to manufacture products such as hydrogenated oils, biscuits, soaps and glass. In 1945, the company signed an agreement with Caterpillar Tractor Company, USA, for marketing earth moving equipment. At the end of the war, large numbers of war-surplus Caterpillar equipment were available at attractive prices, but the finances required were beyond the capacity of the partners. This prompted them to raise additional equity capital, and on 7 February 1946, Larsen & Toubro Private Limited was born.

Subsidiaries & Joint Ventures L&T - Komatsu Limited

Having its registered office at Mumbai, India and focusing on construction equipment and mining equipment, L&T-Komatsu Limited is a joint venture of Larsen and Toubro, and Komatsu Asia Pacific Pte Limited, Singapore, a wholly owned subsidiary of Komatsu Limited, Japan. Komatsu is the worlds second largest manufacturer of hydraulic excavators and has manufacturing and marketing facilities worldwide. The plant was started in the year 1975 by L&T to manufacture Hydraulic Excavators for the first time in India. In 1998, it became a joint venture. L&TKomatsu Limiteds manufacturing facilityThe Bangalore Workscomprises Machinery Works and Hydraulics Works. Machinery Works has a modern manufacturing facility with ISO 9001:2008 accreditation for design, manufacture and servicing of earthmoving equipment. Hydraulics Works, with a precision machine shop, manufactures the complete range of high pressure hydraulic components

and systems, and is ISO 9001:2008 certified for design, development, manufacturing and servicing of hydraulic pumps, motors, cylinders, turning joints, hose assemblies, valve blocks, hydraulic systems and power drives as well as allied gear boxes.

L&T Finance
Larsen & Toubro financial services Financial Services is a subsidiary which was incorporated as a Non Banking Finance company in November 1994. The subsidiary has a spectrum of financial products and services for corporate, construction equipments etc. L&T Finance was able to withstand the market dynamics and adapt as per that. This is a new division after the company declared its restructuring L & T Mutual Fund is the mutual fund company of the L&T group. This company provides Mutual Fund schemes for investors in India.
Larsen & Toubro Infrastructure Finance

Larsen and Toubro Infrastructure Finance Company Limited was set up as a 100% subsidiary of L&T. It commenced its business in January 2007 upon obtaining Non-Banking Financial Company (NBFC) license from the Reserve Bank of India (RBI). As of 31 March 2008, L&T Infrastructure Finance has approved financing of more than a billion USD to select projects in the infrastructure sector. L&T Infrastructure Finance has received the status of "Infrastructure Finance Company" from the Reserve Bank of India within the overall classification of "Non-Banking Financial Company".

L&TIntegrated Engineering Services (IES)

L&T Integrated Engineering Services (L&T IES), a business unit of L&T, offers a combination of mechanical, electrical and electronic design (mechatronics/embedded systems), civil and architectural services. L&T IES has its design and delivery locations in Vadodara, Chennai, Bangalore, Mysore and Mumbai in India. L&T IES services also encompass architectural, civil, structural design and building utility systems design. Practices include both product and plant engineering services in the automotive, trucks and off-highway vehicles, industrial products, off-shore and marine, oil and gas and

consumer goods sectors. Emerging areas include aerospace, railways and power and consumer electronics.

L&T Valves
L&Ts Valves Business Group markets valves manufactured by L&T's Valve Manufacturing Unit and L&T's joint ventures, Audco India Limited, India and Larsen & Toubro Valves Manufacturing Unit, Coimbatore as well as allied products from major international manufacturers. L&T's Valve Manufacturing Unit in Coimbatore manufactures industrial valves specifically for the Power Industry. L&T sells value-added flow control solutions to oil and gas, refining, petrochemical, chemical and power industries. L&T is a leading global supplier of industrial valves and customized solutions for major Refinery, LNG, GTL, Petrochemical and Power projects. L&T Valves Business Group has offices in the USA, South Africa, Dubai, Abu Dhabi, India and China, and strategic alliances with leading integrated valve distributors and agents in the major markets.

Change of Management

FIs may oppose management change in L&T

NEW DELHI: Insurance companies and FIs may oppose any management change in Larsen and Toubro. The Aditya Birla group has made an open offer to acquire 20 per cent additional stake in L&T. The group, as on September 30, 2002, has a 14.15 per cent stake in the company. LIC, which holds the largest equity of 17.42 per cent in L&T, has decided not to participate in the open offer. LIC CMD SB Mathur has made it clear that the offer price of Rs 190 per share is very low and not acceptable. L&T's share price is hovering around Rs 180.

The Aditya Birla group had paid Rs 306.54 per share to acquire 10.05 per cent stake from Reliance and its group companies. A senior official of an insurance company, having large stake in L&T, said that all the six insurance companies and UTI would jointly decide on the action plan regarding the open offer. All of them own around 37 per cent in L&T. He pointed out that Reliance was able to fetch a high price of Rs 306.54 per share for its 10 per cent stake, as it might give the Aditya Birla group a strategic control in L&T. So, institutions could do the same bargain while offloading holdings. Also, to retain the bargaining strength, FIs and insurance companies would not allow the Aditya Birla group to take management control in L&T even if it manages to acquire the 20 per cent stake from the public. If this happens, Aditya Birla's stake will touch 34.15 per cent. Market sources said Birlas would be very happy by buying around 11 per cent, to be able to touch a 26 per cent equity holding in L&T. This will allow them to make creeping acquisition of 5 per cent every year. Six insurance companies own 26.53 per cent in L&T. Of them, LIC has the maximum holding, followed by New India Assurance (2.5 per cent) and General Assurance (2.25). In the mutual fund category, UTI holds the maximum of 10.34 per cent of paid up equity capital. The public holds around 31.68 per cent.

Overview
Driving innovation and growth in today's business environment requires focus on your organization and workforce capabilities. The ability to manage costs, drive productivity and gain a competitive advantage from the workforce is growing in importance and focus. Today's dynamic workforce is increasingly globally dispersed, multigenerational and multicultural. Effective management requires an integrated and consistent approach to help drive cost savings, efficiency, retention, quality, customer satisfaction and innovation.

Additionally, times of extended economic uncertainty require even more focus on specific areas of your workforce strategy. In order to position your organization for future success, you must differentiate high and low performers, stimulate social networking to create and leverage organizational knowledge of your globally dispersed workforce, promote the development of institutional knowledge, embrace flexible work environments, and enable leadership to guide individuals through the change.

Learning transformation:
Addresses the need to inspire and equip people in business to improve performance, skills and knowledge for the following results: aligning learning initiatives with organizational and business goals, developing learning strategies, and harnessing the power of technology to enhance learning and performance.

Workforce analytics and optimization:

This offering leverages analytics to design evidence-based strategies and practices for optimizing workforce performance and productivity to develop information strategies, and a workforce measurement framework, which can help identify key metrics and align with employee goals.

Organization design:
Organization design enables enterprises to align their organization with new or existing business models and strategies to maximize effectiveness by clarifying work responsibilities and redefining jobs and their relationships to one another (structure), governance mechanisms, and other organizational elements to drive new behaviour supporting strategic change and business results

Change management:
Change management is a proactive and systematic approach to deal with change from the perspective of an organization, a group, or at the individual level. Change management helps ensure that people impacted by the changes (technology) understand, accept and commit to changes; thereby mitigating risks and achieving long term benefits faster.

Business challenges
Business leaders are addressing many challenges and opportunities in today's growingly complex organizational environments, including:

Identifying and employing the right talent and workforce business strategy, including business model transformation, growth and innovation

Adopting optimal talent management practices to reflect the requirements of a changing workforce

Understanding and optimizing workforce performance through planning, development, collaboration and sophisticated performance management

Managing the transition to a new business environment while maintaining business productivity and competitiveness.

Role of Innovation in Change Management

Innovation can take many forms and some of them are discontinuous innovation, continuous innovation and dynamically continuous innovation. We shall discuss what each mean in the next paragraph. Suffice to say that unless companies innovate they cannot move up the value chain and unless they move up the value chain, they cannot remain competitive. So, to make changes to the organizational processes and its strategy, companies need to innovate constantly. Innovation can produce sudden and dramatic changes to the way business is done and the way consumers experience changes to the products and services made by the companies. This is the discontinuous innovation which is sudden and has a huge impact on the way the company goes about its business. On the other hand, innovation can be gradual and incremental which is the continuous innovation way which means that the company introduces refinements to its products so that consumers adjust and adapt in steps. Finally, there is the dynamically continuous innovation which affects the way in which the company adapts to changing market conditions and changes in consumer behavior trends to make a positive impact on the consumer psyche. The point here is that no matter what kind of innovation the L&T adopts, the prerequisite for change management is innovation and without innovation, a company cannot expect its internal and external environment to be to its advantage.

Global Financial Crisis and Organizational Change

Resistance to change is inevitable as there are many parties who stand to lose from change and apart from the status quoists there are vested interests who would oppose change. The changes that the organizations and the companies introduced in the wake of the global financial crisis were systemic and fundamental in nature and hence there would be many reasons for people and employees in these organizations to resist change. The primary reason why the people would resist change is that because of job losses and the associated risks of layoffs and restricting, they stand to lose and hence there is a strong element of resistance that enters the discussion. Since the organizations in Australia undertook drastic changes to the way they worked, the people working in these organizations have every reason to resist the changes because they are at the losing end of the changes and hence have a stake in resisting change. This goes for the majority of people who were affected by the downturn and whose jobs and careers were at stake because of the global financial crisis. The other reason for people or organizations to resist change is that the global financial crisis was systemic in nature and hence called for fundamental changes in which the system operated. This meant that the people or organizations at the receiving end of these changes had to bear very drastic changes in the way they operated and hence those who gain by following the status quo had every reason to resist the change. This was especially the case with organizations that underwent restricting and cost cutting where though there were no drastic job losses, many of the perks and benefits for the employees were cut leading to widespread dissatisfaction and discontent with the kind of changes that were being proposed. Hence, this is the second most important reason for people or organizations to resist changes in the wake of the downturn caused by the global financial crisis. The third reason why organizations resisted the changes in the aftermath of the global financial crisis is that many of the changes introduced led to regulatory and legal changes in the way organizations operated and hence there was every chance that these organizations had to implement rules and regulations that would curb excessive risk taking and speculation. Given the enormous benefits that these methods of risk taking and speculation bring to the people and organizations concerned, it is indeed the case that they would not be willing to forego these

benefits. Hence, this is a very important reason for people and organizations to resist the changes introduced in the aftermath of the global financial crisis.

Change is the only Constant in the 21st Century

The business landscape of the 21st century is characterized by ever changing trends and events that happen with so much rapidity that they take most business leaders by surprise. Considering the high turnover of ideas and fads, it is no wonder that companies and their offerings in terms of products and services fail to click in the marketplace more often than not. Given this background it is not surprising that business leaders often throw up their hands in despair at this flux and uncertainty that affects the way their companies operate. Hence, it would be fair to say that the only constant in this century is change and companies and the leaders who lead them should be prepared to deal with change that is rapid and sudden at the same time. The point here is that the Millennial Generation measures time by the nanoseconds and hence, they are in constant need of new products and services. And this is something that marketers and companies ought to recognize when they devise products and services for this generation. That is precisely what the companies mentioned above have been doing. Considering the shift in emphasis away from manufacturing towards services and application development as opposed to basic product development world over, it is time for companies to realize that the need for innovation and the speed at which they innovate remain the critical success factors to succeed in the marketplace of the 21st century. In conclusion, it is no longer the case that companies work 12 hours a day to keep up with the competition. Instead, those companies that can leverage the 24/7 culture and embrace the change wave would succeed.