CASE BASED INTERVENTION REPORT

OF
CHANGE MANAGEMENT AND ORGANISATIONAL
DEVELOPMENT
ON
CHANGE MANAGEMENT
AT
TATA MOTORS

SUBMITTED TO: - SUBMITTED BY: -

L.K. JENA CHANDAN KUMAR JENA
BBM (HR), USC17018
 ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of any task would be
incompletes without the mention of people who made it possible, those consistent guidance
and encouragement crowned my efforts with success. In the completion of my “CASE BASED
INTERVENTION REPORT” first of all I am thankful to School of Commerce for giving me
the opportunity of researching on this particular topic.

I would also like to mention my thanks to Mr. L.K jena sir who helped me for
developing the concept of change management in the organisational environment which helped
me in knowing the issues of change management.

I would also like to thanks my parents for encouraging and giving me full support.

CHANDAN KUMAR JENA

BBM (HR), USC17018
 DECLARATION

I hereby declare that the case based intervention report entitled in “CHANGE
MANAGEMANT AT TATA MOTORS” in change management and organisational
development is an original and genuine work done by me.

I also state that it is not submitted elsewhere for the award of any degree or diploma either by
myself or someone else and submitting it form the context of an academic endeavour and partial
fulfilment for the completion of my report as part of academic curriculum.
 TABLE OF CONTENTS
SERIAL NO. CONTENT PAGE NO.
1 INTRODUCTION TO CHANGE 4
MANAGEMENT
2 INTRODUCTION TO TATA MOTORS 5
3 CHANGES TO TATA MOTORS 6-7
4 TATA NANO 8-9
5 NEED FOR CHANGE AT TATA MOTORS 10
6 CHANGE IN WORKFORCE AND 10
CULTURE
7 EVALUATING THE CHANGE PROCESS 11-12
AT TATA MOTORS
8 CONCLUSION 13
9 REFERENCES 14
 INTRODUCTION TO CHANGE MANAGEMENT
Change management is a structured approach to transitioning individuals, teams, and
organizations from a current state to a desired future state. Change management (or change
control) is the process during which the changes of a system are implemented in a controlled
manner by following a pre-defined framework/model with, to some extent, reasonable
modifications.

Change management is the process of developing a planned approach to change in an

organization. Typically, the objective is to maximize the collective benefits for all people
involved in the change and minimize the risk of failure of implementing the change. The
discipline of change management deals primarily with the human aspect of change, and is
therefore related to pure and industrial psychology.

In project management, change management refers to a project management process

where changes to a project are formally introduced and approved.

The field of change management grew from the recognition that organizations are
composed of people. And the behaviours of people make up the outputs of an organization.

Types of Organizational Change

• Strategic changes

• Technological changes

• Structural changes

• Changing the attitudes and behaviours of personnel

 INTRODUCTION TO TATA MOTORS
Tata Motors Limited is India's largest automobile company, with consolidated revenues of
Rs.70,938.85 crores (USD 14 billion) in 2008-09. It is the leader in commercial vehicles in
each segment, and among the top three in passenger vehicles with winning products in the
compact, midsize car and utility vehicle segments. The company is the world's fourth largest
truck manufacturer, and the world's second largest bus manufacturer.

The company's 24,000 employees are guided by the vision to be "best in the manner in which
we operate, best in the products we deliver, and best in our value system and ethics."

Established in 1945, Tata Motors' presence indeed cuts across the length and breadth of India.
Over 5.9 million Tata vehicles ply on Indian roads, since the first rolled out in 1954. The
company's manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka).
Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with
Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and
Fiat powertrains. The company is establishing a new plant at Sanand (Gujarat). The company's
dealership, sales, services and spare parts network comprises over 3500 touch points; Tata
Motors also distributes and markets Fiat branded cars in India.

In May 2009, Tata Motors introduced ushered in a new era in the Indian automobile industry,
in keeping with its pioneering tradition, by unveiling its new range of world standard trucks
called Prima. In their power, speed, carrying capacity, operating

economy and trims, they will introduce new benchmarks in India and match the best in the
world in performance at a lower life-cycle cost.

Tata Motors is equally focussed on environment-friendly technologies in emissions and

alternative fuels. . It has developed electric and hybrid vehicles both for personal and public
transportation. It has also been implementing several environment-friendly technologies in
manufacturing processes, significantly enhancing resource conservation
 CHANGES AT TATA MOTORS
Tata Motors marks the biggest turnarounds in the history of Indian automobile manufacturing
industry which happened in 2001. This success story of Tata Motors can be entirely attributed
to the timely change adopted by the Tatas and the then M.D Ravi Kant who led the change.

Today Tata Motors ranks as the world’s fifth-largest manufacturer of medium and heavy
trucks—it has a 61 percent domestic market share in this segment—and has taken the number-
two position for sales of passenger vehicles in the Indian market. It has also built a significant
global presence, both through sales efforts in overseas markets (such as the former Soviet
republics, the Middle East, South Africa, South Asia, and Turkey) and through acquisitions
such as the takeover of Daewoo’s commercial-vehicle business in South Korea and the
purchase of a 21 percent stake in the Spanish bus manufacturer Hispano Carrocera.

Tata Motors was predominantly a manufacturer of commercial vehicles, and that is a very
cyclical business. The commercial-vehicle market in India shrank by more than 40 percent,
with massive consequences for both the top and, more particularly, the bottom lines of the
company. The 5-billion-rupee loss in 2001 was the first time something on this scale had
happened in the company’s history, and it really shook everybody within the organization.

They tried to understand what had gone wrong and wanted to create a path for the future to
ensure that they never got into such a situation again. So, in 2001 they

decided on a recovery strategy that had three distinct phases, each of which was intended to
last for around two years—six years in all.

Phase one was intended to stem the bleeding. Costs had to be reduced in a big way, and that
was going to be a huge challenge for a company that was not only the market leader but had
been used to operating in a seller’s market and employing a cost-plus approach to pricing.
Phase two was to be about consolidating their position in India, and phase three was to involve
going outside India and expanding our operations internationally.

Phase 1:

The key objectives were to move to a system of market pricing and to reduce their break-even
point, both of which called for major reductions in costs—variable costs, fixed costs, and
interest costs. They used many approaches to cost reduction, including bench-marking our
rivals. For example, they took apart vehicles to see what they could do to modify the products
and to lower costs. They went in for e-sourcing, and today they are the largest company doing
e-sourcing in India and one of the leading ones in the automobile industry worldwide. In two
and a half years, they reduced the break-even from nearly two-thirds of capacity utilization to
around one third, which meant that even if the market shrank by close to 60 percent, they would
still be in the black. The whole organization really got together to ensure that the bleeding
stopped.

One of the major drivers of success at Tata Motors Ltd. (TML) was its ability to fully exploit
information technology to drive business goals and reduce cost. The company was an early
adopter of CAD and CAM systems.

Phase 2:

The concentration in phase one was indeed on cost reduction, but while this was going on they
thought about taking action in areas that would have an impact during the other phases. For
phase two, the concentration was on improving product quality and upgrading product features
so as to make the products more competitive. They also started work on new products that
would be required by the market after three to five years and strengthened the position in the
marketplace by setting up a new sale planning process, tightening credit norms, improving the
liquidity and profitability of the dealers, reorienting toward customer satisfaction, and
extending the reach of the distribution network. For phase three, the concentration was on
starting work on international markets by identifying key markets and segments and developing
a comprehensive plan to improve our competitive position so as to get a respectable market
share. They also started looking at opportunities for inorganic growth.

Phase 3:

In phase the concentration was on starting work on international markets by identifying key
markets and segments and developing a comprehensive plan to improve Tata Motor’s
competitive position so as to get a respectable market share. They also started looking at
opportunities for inorganic growth. International diversification was such a key part of the
transformation strategy. It was all part of first, reducing the impact of domestic cyclicity –
cyclicity is present across the world but in different phases in different places - and, second,
seeking new geographies for growth in the face of the limitations of the domestic market,
especially in commercial vehicles, where we enjoy a very high market share of over 60 percent.
Tata Motors wanted to leverage the market-leading products internationally.
 TATA NANO
SWEEPING CHANGE

Tata Nano, the new model introduced by Tata motors, hailed as "the people's car", is an
amazingly cheap car. With a price tag of US$ 2500, Tata Nano is indeed an affordable middle
class family car. Tata Nano is a dream comes true for an average Indian. His /her ideas about
owning and driving a car will become a reality soon. An analysis of the new car seems
necessary as it is bringing mobility to the masses in an efficient and economic manner.

Achieving the cost objective

Tata has defied the conventional odds and sceptics in the industry through the innovation of
the world's cheapest car. Tata Nano is a marvel of a product yet audaciously economical and
mechanically simple. It is a breakthrough in frugal engineering where innovation is driven by
cost savings and sheer ingenuity. Tata managed to reorient the basic tenets of efficiency and
practicality to meet the cost target.

Tata Nano's efficiency comes from including only those items that are necessary for basic
transportation and eliminating the not so relevant ones i.e. having one part/component that can
perform a task just as good as two parts/ components can do, thus resulting in cost savings, e.g.
one windscreen wiper and one side mirror. Tata also refrains from including items that are not
feasible due to monetary reasons. Radio, air conditioner (despite the sizzling heat in India),
power steering are not included while the instrument panel consists of only a speedometer,
odometer, and fuel gauge similar to that of the two-wheelers- basic, yet functional.

In addition, Tata has come up with practical ways to reduce car weight and thereby trim down
the overall cost. It uses comparatively small and light engine, a 623cc two-cylinder petrol
engine made of aluminium, unlike conventional engines which are made out of cast iron. The
engine of Tata Nano is strategically placed at the back of the car leaving the front section for
luggage, that too with the capacity of a briefcase. This is the most significant element in
bringing down the weight and the overall cost of the car. Other factors that contribute towards
the weight reduction are the usage of hollow steering wheel shafts, plastic body panels and
smaller tubeless tyres. As a result of these measures, Tata Nano weighs only about 590kg.
Lesser weight and fewer parts mean less raw material and lower cost for Tata Nano.
Safety in mind Besides having the right parts to meet the cost objective, Tata Nano has adequate
features that exceed current regulatory requirements and meet minimum safety standards. It
has a sheet-metal body with strong passenger compartment equipped with safety features such
as crumple zones, intrusion-resistant doors, seat belts, strong seats and anchorages.

Ownership cost It is quite obvious that Tata Nano is cheap to manufacture, but the question is,
does owning and operating a Nano over a period of time yield significant savings and benefits?
While the low-price tag of Nano looks attractive, it is important to look at certain other factors
like the running cost of the car in the long run. Potential buyers need to consider the rising price
of petrol. Petrol prices have breached the US$ 100 mark with no sign of abating as global
demand skyrocketed. The influx of thousands of Tata Nano on Indian roads would elevate the
demand for petrol and this might bring a new dimension to the continuous hike of petrol price
in India, which still depends on the Middle East for oil. Petrol prices may reach a point where
owners of Tata Nano could no longer afford to buy petrol to run it. If that is the case, Tata Nano
owners may leave their cars behind and resort to riding two-wheelers. In such a scenario, Tata
Nano's value proposition may no longer make an economic sense.

The would-be owners of Tata Nano have to consider the cost of replacement parts and service
maintenance for the car during the period of ownership. Tata Nano is built from scratch and
most of the component parts are new and do not share platform with other models in the Tata
family. As a result, it is difficult to assess the vehicle's reliability, durability and parts'
longevity. These factors along with unavailability of the model have made it difficult to
estimate the cost of ownership of Tata Nano and the frequency of service trips. The overall cost
of parts and services of Tata Nano is likely to be at the range of similarly sized car like Maruti
800. The perception of frequent parts breakdown and shorter service interval due to sub-
standard parts and inferior materials on budget cars may not hold true for Tata Nano. Tata
Nano's component parts are developed and manufactured by reputable component
manufacturers like Bosch, Rico Auto, Lumax Group, Rane Group, Asahi Glass etc. Moreover,
the cost of parts and services is likely to decline as more Tata Nano cars are driven on the road.

Nano overseas the rise in petrol prices makes consumers around the world to look for a low-
cost car. Tata seems to capture this trend and is looking forward to introduce Tata Nano beyond
Indian shores. One of the countries where Tata Nano is likely to make inroads is Thailand,
dubbed as the 'Detroit of Asia', due to its extensive vehicle manufacturing activities in ASEAN
region.
NEED FOR CHANGE AT TATA MOTORS
Change should not be done for the sake of change -- it's a strategy to accomplish some overall
goal. Usually organizational change is provoked by some major outside driving force, e.g.,
substantial cuts in funding, address major new markets/clients, need for dramatic increases in
productivity/services, etc. Typically, organizations must undertake organization-wide change
to evolve to a different level in their life cycle, e.g., going from a highly reactive,
entrepreneurial organization to more stable and planned development. Transition to a new chief
executive can provoke organization-wide change when his or her new and unique personality
pervades the entire organization.

CHANGE IN WORKFORCE AND CUTURE

1. Formulation of a clear strategic vision: In order to make a cultural change effective a clear
vision of the firm’s new strategy, shared values and behaviours is needed. This vision provides
the intention and direction for the culture change

2. Display Top-management commitment: It is very important to keep in mind that culture

change must be managed from the top of the organization, as willingness to change of the
senior management is an important indicator (Cummings & Worley, 2005, page 490). The top
of the organization should be very much in favour of the change in order to actually implement
the change in the rest of the organization. De Caluwé & Vermaak (2004, p 9) provide a
framework with five different ways of thinking about change.

3. Model culture change at the highest level: In order to show that the management team is
in favour of the change, the change has to be notable at first at this level. The behaviour of the
management needs to symbolize the kinds of values and behaviours that should be realized in
the rest of the company. It is important that the management shows the strengths of the current
culture as well, it must be made clear that the current organizational does not need radical
changes, but just a few adjustments.

4. Modify the organization to support organizational change: The fourth step is to modify
the organization to support organizational change.

5. Select and socialize newcomers and terminate deviants: A way to implement a culture is
to connect it to organizational membership, people can be selected and terminate in terms of
their fit with the new culture.
 EVALUATING THE CHANGE PROCESS AT TATA
MOTORS
Evaluating the organizational change in culture, Tata Motors follow different approaches such
as, analysing the fundamental assumptions, investigating the cultural gaps and managerial
behaviour in the organization.

There are different models provided for investigating and analysing the organizational culture.
But in our researches, we applied the “Denison” model. This model is one of the most
comprehensive models that divide the organizational culture into four parts based on two axels
(degree of focus and degree of stability)

On the basis of organizational concentration, It is possible to divide this model into two parts
by horizontal dissection. Cooperation and compatibility pay attention to organization internal
dynamism, but they don’t care about their relations with external environment. Yet adaptability
and mission consider organization’s connection with the external environment. It is also
possible to divide the model into two parts by vertical dissection. Involvement and partnership
enforce on organization’s capacity for flexibility and change, although compatibility and
mission enforce on stability and

having a specific path. Regarding to researches these four cultural characteristics have a
positive influence on organization performance.

Characteristics have its own specifications that will be described below:

Adaptability: making the demand of market practical is called adaptability. Belief and norm
systems of the organization perform the related behavioural changes by supporting
organization’s opportunities and it will increase the organization’s chance for survival,
development and expansion with the help of perception, explanation and rendition of
environmental signals, and. There are three aspects of adaptability considered in Denison
model which affect the organization’s effectiveness. The First aspect is called the ability of
realization and reacting to the external environment. Nowadays successful organizations are
the ones which has a special emphasis on their customers and competitor’s behaviour’s. Second
aspect is the ability to reacting to internal events without considering level, department,
function and output. And the third aspect is the capacity and ability to organize and reengineer
processes and behavioural structures which help the organization to adapt with new conditions.
Without this ability the organization will miss its effectiveness.

The standards for adaptability are: • Making the changes, • Customer focus, • Organizational
learning.

Constancy: defines the values and systems which form a strong culture. Constancy provides a
central force for organizational solidarity and harmony. Organizations provide constancy by
developing a set of organizational systems that establishes an internal management system on
the basis of bilateral support of employees and employers. These organizations have committed
employees, core values, different ways to perform business, tendency for promotion and an
obvious set of rules that determine things musts and mustn’t. Constancy creates a powerful
organizational culture based on joint beliefs, values and symbols which are reasonable and
perceivable for the employees. Internal control systems that are based on

organization’s values are more effective tools in order to reach integrity and coordination than
external control systems that are on the basis of rules.

Standards for this cultural characteristic are: • Integrity and coordination • Core values •
Agreement.

Involvement: what we mean by involvement is to increase responsibility in employees.

According to organizational culture when employees are highly attached to their work, they
are encouraged to involve in performance and have responsibilities. These organizations have
informal, volunteer controls instead of formal, obvious ones. Responsibility causes
commitment and independency in employees and improves employees’ decisions quality.

Standards of involvement are: • Empowerment • Capability development • Team orientation

Mission: defines a long term direction for the organization. Mission distinguishes goals of the
organization with defining social role and external objectives of the organization. With the help
of the direction and these distinct goals, mission specifies the activities that should be
performed by the employees. Considering the position where organization is planned to reach,
activities and strategies will be identified. Probability of organization’s success will be
increased by converging employees and the organization.

Standards of this section are: • Strategic direction and intent • Goals and objectives • Vision
 CONCLUSION
Tata Nano achieves what most people deemed impossible through originality and ingenuity. It
is a no-frills car that serves the needs of the general public and India's deplorable road
conditions and notorious traffic. In this sense, the production and launch of Tata Nano can be
called a revolution - not only to the consumers but also to industry players. Other players are
contemplating on their own versions of low-cost alternatives as a result of the overwhelming
response from the Indian public and all over the world during the pre-launching ceremony.
Moreover, their scepticism is met with a surprise upon seeing the model in action. The next
step forward for Tata is to address the possible concerns with regard to ownership in order for
customers to grasp the value proposition that Tata is trying to propagate. This includes
dispelling all perceptions of shortcomings normally associated with a low-cost car through
vigorous testing on real roads using real users. The basic rule of customer service still applies.
Tata Nano should meet the consumer's expectations by providing a reliable and modestly safe
vehicle to drive. The car, with its immense recognition gained even before its launch, is
expected to fulfil the dreams of common people.
 REFERENCES
• www. en.wikipedia.org/wiki/ Change management

• www. documents.bmc.com/products/documents/98/29/89829/89829.pdf

• www.scribd.com/doc/2876978/tatamotors siebelcasestudy

• www.autofocusasia.com/ management / tata nano.htm

• www.managementhelp.org/org_chng/org_chng.htm

• www.12manage.com/i_co.html

• www.en.wikipedia.org/wiki/Organization_development

• www.alumni.caltech.edu/~rouda/T3_ OD .html

• www.iveybusinessjournal.com/view_article.asp?intArticle_ID=532