Examining Change of Management within an Organization

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Satyam Computer Services is a leading global business and information technology services company that leverages deep industry and functional expertise, leading technology practices, and an advanced, global delivery model to help clients transform their highest-value business processes and improve their business performance. The company's professionals excel in enterprise solutions, supply chain management, client relationship management, business intelligence, business process quality, engineering and product lifecycle management, and infrastructure services, among other key capabilities.

Mahindra Satyam is part of the $6.3 billion Mahindra Group, a global industrial conglomerate and one of the top 10 industrial firms based in India. The Group's interests span financial services, automotive products, trade, retail and logistics, information technology and infrastructure development. Mahindra

Satyam development and delivery centers in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and Australia serve numerous clients, including many Fortune 500 organizations.

"Satyam BPO brings in the best Quality of services among all other European suppliers, which is above our expectation Levels. Things have improved a lot compared to the earlier Service period."- Strategic-planning Manager

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"Initially, we were very sceptical about this model. Though Satyam BPO is quiet successful in US, we were bit sceptical as Europe is altogether a different culture, and we have no experience in outsourcing. But today, this is a success for us. Thanks a lot for your continuous efforts to make this a success story. Today, we are recommending our various European facilities about Satyam BPO's capabilities." - Strategic-planning Mana

Introduction

Change management can take many forms and include many change environments. The most common usage to the term refers to organizational change management.

Organizational 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 Management consulting change management is euphemism for dealing with an organization's actual or impending insolvency.

Many technical disciplines (for example Information technology) have developed similar approaches to formally control the process of making changes to environments. Change management can be either 'reactive', in which case management is responding to changes in the microenvironment (that is, the source of the change is external), or proactive, in which case management is initiating the change in order to achieve a desired goal(that is, the source of the change is internal). Change management can be conducted on a continuous basis, one regular schedule (such as an annual review), or when deemed necessary on a program-by-program basis.

Change management can be approached from a number of angles and applied to numerous organizational processes. It's most common uses are in information technology management, strategic management, and process management. To be effective, change management should be multi-disciplinary, touching all aspects of the organization. However, at its core, implementing new procedures, technologies, and overcoming resistance to change are fundamentally human resource management issues.

History Of Satyam Computer Services

Satyam Computer Services Ltd is one of the leading global consulting and IT services company that offer send-to-end IT solutions for a range of key verticals and horizontals. Satyam Computers has domain expertise in verticals such as Automotive, Banking & Financial Service, Insurance Healthcare, Manufacturing, Telecom, Infrastructure, Media, Entertainment, and Semiconductors. Satyam has nearly 40,000 employees on its rolls, working in development centers in India, the USA, the UK, thecae, Canada, Hungary, Singapore, Malaysia, China, Japan and Australia. Satyam Computers' network is spread over55 countries across 6 continents. Satyam serves over 558global companies including over 163 Fortune 500 corporation Satyam Computers was founded in June 1987 as private limited company by Ramalinga Raju along with one of his brothers-in-law, DVS Raju. In June 1991,Satyam Computers got its first Fortune 500 Client. In the same year in August, Satyam Computers was recognized as a Public Limited Company. Satyam went public in May1992 and its issue was oversubscribed 17 times. In July1993, Satyam entered into a joint venture with Dun &Bradstreet. Satyam was awarded ISO 9001 Certification in March 1995. In December 1995, Satyam Info way was incorporated. In May 1997, Satyam became the first Indian IT Company to get ITAA Certification for Y2KSolutions. In November 1998, Satyam became one of the first companies to enter Indian Internet service market with the launch of Satyam Info way's ISP Service. In thesame year Satyam entered into a joint venture with GE .In 1999, Satyam Info way became the first Indian Internet company to be listed on NASDAQ. In February 2000Satyam was declared one of '100 Most Pioneering Technology Companies' by World Economic Forum,Davos. In May 2000 Satyam became the first organization in the world to launch Customer-Oriented Global Organization training. In March 2001 Satyam became first ISO 9001:2000 Company in the world as certified by BVQI. In May 2001 Satyam was listed on New York Stock Exchange

Achievement Of Satyam

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1. First Indian IT Company to get ITAA Certification for Y2K Solutions.

2 .Satyam Info way is the first Indian Internet company to be listed on NASDAQ.

3. Declared one of '100 Most Pioneering Technology Companies' by World Economic Forum, Davos in the year 2000.

4. First organization in the world to launch Customer Oriented Global Organization training.

5. First ISO 9001:2000 Company in the world as certified by BVQI.

6. Ranked by the Brown-Wilson Group as the number two outsourcing vendor globally in the year 2006.

Milestones

Our journey has been eventful, designed for growth, and marked by numerous pioneering achievements and global awards. We have made significant contributions to the professional services industry, in India and overseas. Some significant milestones are listed below:

2009

1 .Unveils the new brand identity, "Mahindra Satyam"

2. Tech Mahindra announces an open offer to buy an additional 20% in Satyam from existing shareholders

3. Tech Mahindra acquires a 31% stake (Preferential Shares) in Satyam

4.Venturbay Consultants Private Limited, a TechMahindra subsidiary, emerges as the highest bidder to acquire a controlling stake in Satyam.

2008

1. Adopts new tagline "Business Transformation. Together."

2. Enters agreement to acquire S&V Management Consultants, a Ghent, Belgium-based supply chain management (SCM) consulting firm

3. Becomes the first company to launch a secondary listing on Euro next Amsterdam under NYSE Euro next's new "Fast Path" process for cross listings in New York and Europe

4. Becomes the first company to be invited by the National Stock Exchange (NSE) to ring the opening bell

5. Enters into a definitive agreement to acquire Chicago-based Bridge Strategy Group.

2007

1. Becomes the Official IT Services Provider for the FIFA World Cups, 2010 (South Africa) and 2014 (Brazil)

2. Announces acquisition of UK-based Nitro Global Solutions Limited

3.Opens Global Development Center (GDC) in Malaysia

4.Opens Development Center in Vizag, India

5. Becomes the first Asian company to feature in the Training Magazine's list of Top 125 companies for learning

2006

1. sets up the first "Global Innovation Hub" in Singapore

2 . Sets up operations in Guangzhou, China

2005

1. FLC framework launched across the entire organization

2. Largest global development center outside India (in Melbourne) begins operation

3. Citisoft and Knowledge Dynamics acquired

2002

1.Satyam BPO launched in Hyderabad

2 .First Customer Summit conducted

Avards

1.Hyderabad Organizational unit assessed at a maturity level 5 on the SEI CMMI ver 1.2 in Jan 2009 by KPMG

2."Excellence In Practice" recognitions for learning American Society for Training & Development (ASTD) Declared as Voice-Ready partner for Microsoft Unified Communications

By Microsoft

2008

1. BS25999 Certification for all India Operations. Satyam Computer Services Ltd. is the third company to achieve this certification. By BSI Management Systems

2. Asian MAKE (Most Admired Knowledge Enterprise) Award Teleos, in association with KNOW Network UK Trade & Investment India (UKTI) Business Award for corporate social responsibility BUKTI By KNOW Network

3. UK Trade & Investment India (UKTI) Business Award for corporate social responsibility

By UKTI

4. SAP Pinnacle Award 2008 under "Service - Ecosystem Expansion (Growth)" category

By SAP

Why change in Management Required at Satyam

Downfall Of Satyam ( A satyam SAGA)

The problem started when the Ramalinga Raju, Satyams computers chairman announced the decision taken by board members to buy 51% stake in Maytas infrastructure and 100% stake in Maytas properties. The Maytas infra structure and Maytas properties are the companies run by family members of Ramalinga Raju.This decision is taken without share holders considerations. It was the big surprise to share holders world wide and the ADR fell by 50% on the same day in

the American market and the stock fell by 30% in the Indian stock market on next day.

Then the Ramalinga Raju taken decision immediately to withdraw the idea of purchasing the Maytas infra andMaytas properties. Satyam was plunged into a crisis in January 2009 after its founder, B. Ramalinga Raju, said that the company's profits had been overstated for several years. Finance professionals, however, say that the scam could not have happened without the complicity of company auditors n.Satyam had engaged Pricewaterhous eCoopers as itsauditors over past 10 years. The company's accounts arebeing restated.

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On 7th January 2009 morning at about 11 O'clock the news came that the Ramalinga Raju The Chairman of Satyam Computers Services limited resigned to his

chairman post. He also confessed that the accounts shown in the quarter ending 30th September, 2008 were wrong and the amount of net income to be shown as Rs.

600 Cores instead of 60 crores. This means the profits of Satyam Computer Services for the quarter is only 60crores and hence the stock has fallen 80% based on its

actually earnings. On 7th January 2009 morning at about 11 O'clock the news came that the Ramalinga Raju The Chairman of Satyam Computers Services limited resigned to his chairman post. He also confessed that the accounts shown in the quarter ending 30th September, 2008 were wrong and the amount of net income to be shown as Rs.600 Crores instead of 60 crores. This means the profits of Satyam Computer Services for the quarter is only 60crores and hence the stock has fallen 80% based on its

Raju confessed that Satyam's balance sheet of 30

September 2008 contained:

inflated figures for cash and bank balances of Rs 5,040 crore (US$ 1.07 billion) (as against 5,361 crore (US$ 1.14 billion) crore reflected in the books). an accrued interest of Rs. 376 crore (US$ 80.09 million) which was non-existen an understated liability of Rs. 1,230 crore (US$ 261.99 million) on account of funds was arranged by himself.

an overstated debtors' position of Rs. 490 crore (US$ 104.37 million) (as against. 2,651 crore(US$ 564.66 million) in the books).

Raju clamed in the same letter that neither he nor the managing director had benefited financially from the inflated revenues. He claimed that none of the board members had any knowledge of the situation in which the company was placed.

He stated that

"What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly (annualized

revenue run rate of Rs 11,276 crore (US$ 2.4 billion) in the September quarter of 2008 and official reserves of Rs 8,392 crore (US$ 1.79 billion)). As the promoters held

a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. The aborted Maytas acquisition deal

was the last attempt to fill the fictitious assets with real ones. It was like riding a tiger, not knowing how to get off without being eaten"

Controversies

Maytas acquisition

In 2008, Satyam attempted to acquire (Maytas Infrastructure and Maytas Properties

founded by family relations of company founder Ramalinga Raju for $1.6

billion, despite concerns raised by independent board directors. Both companies are owned by Raju's sons. This

eventually led to a review of the deal by the government, a veiled criticism by the vice president of India and Satyam's clients re-evaluating their relationship with the

company. Satyam's investors lost about INR 3,400crorein the related panic selling. The USD $1.6 billion (INR8,000 crore) acquisition was met with skepticism as Satyam's shares fell 55% on the New York Stock Exchange. Three members of the board of directors resigned on 29th December 2008.

World Bank

The World Bank had banned Satyam from doing business with it for 8 years due to inappropriate payments to the World Bank's staff. The World Bank accused Satyam of

giving improper benefits to its (the Bank's) staff and of failing to maintain documentation to support fees charged for its subcontractors. However, it clarified thatSatyam was not involved in incidences of data theft or malicious attacks that had been made on the Bank's information systems

Accounting scandal of 2009

In addition to other controversies involving Satyam, onJanuary 7, 2009, Chairman Raju resigned after publicly announcing his involvement in an accounting fraud.Ramalinga Raju is currently in Hyderabad prison along with his brother and former board member Rama Raju, and the former CFO Vadlamani Srinivas.

CHANGE IN MANAGEMENT AT SATYAM

Over the past few decades, large-scale organizational change has become a way of life in business. Many organizational changes, however, have failed to deliver

promises of increased productivity and morale, decreased costs, decreased waste, and increased customer satisfaction. A common theme among these failures is a lack of understanding of the power of the collective human system to obstruct the progress of initiatives. The result has been to reinforce fear, defensiveness, and cynicism among workers toward change efforts.

Failure of an organizational change for businesses has both short term and long term consequences. Direct short term implications to a failure of an effective

organizational change means that objectives are not achieved and resources, including money, time and people, are wasted. Indirectly, morale suffers, job

security is threatened and confidence in leadership diminishes. Over the long haul, a failure of change means that business strategies are not accomplished; resistance

to change increases and the organization's survival is threatened.

Mahindra Satyam uses the iceberg metaphor to explain these upheavals. In organizations when Change is announced, the whole focus of change is on observable reality. Although, there are lots of invisible forces that will destroy the success, if not handled scientifically and systematically.

The conscious world is the observable reality (iceberg above the surface - 10% of total size) - rational facts, figures, logic, analysis, plant, equipment, capital systems

--- people come to grips with these relatively easily. However, the sub conscious world (iceberg below the surface - 90% of total size) is a different matter

altogether. It consists of attitudes, values, beliefs, feelings, habits, assumptions, emotions, norms and culture.

1. A customized approach to nature of project and prevailing organizational context.

2. Tracks interwoven with project implementation track.

3. Leadership buy in and preparation of written statement of future state early in the project.

4. Early identification and timely involvement of stakeholders.

5. The formation of change management network across the organization, involving managers, supervisors and informal leaders as change agents. 6. A real time change management approach involving careful diagnosis and periodic risk assignment.

7. Team building between client and vendor teams.

8. Mechanism for post execution sustenance.

9. For the analysis of business impact of change on users and role clarification support.

10. For developing internal change management capabilities through change management training to line managers / supervisors.

11.Mahindra Satyam has a proprietary change management methodology successfully deployed in multiple change management initiatives across global organizations. These include Fortune 100, government and UN organizations. The methodology

is comprehensive, proactive and real time in nature and includes interventions which are interwoven with the project lifecycle phases.

John P Kotter's 'eight steps to successful change'

John Kotter's highly regarded books 'Leading Change'(1995) and the follow-up 'The Heart of Change' (2002)describe a helpful model for understanding and

managing change. Each stage acknowledges a key principle identified by Kotter relating to people's response and approach to change, in which people see, feel and then change. Kotter's eight step change model can be summarized as

1. Increase urgency - inspire people to move, make objectives real and relevant.

2. Build the guiding team - get the right people in place with the right emotional commitment, and the right mix of skills and levels.

3.Get the vision right- get the team to establish a simple vision and strategy focus on emotional and creative aspects necessary to drive service and efficiency.

4. Communicate for buy-in- Involve as many people as possible, communicate the essentials, simply, and to appeal and respond to people's needs. De-clutter communications - make technology work for you rather than against.

5. Empower action=Remove obstacles, enable constructive feedback and lots of support from leaders - reward and recognize progress and achievements.

6. Create short-term wins-Set aims that are easy to

achieve - in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones.

7. Don't let up- Foster and encourage determination and

Persistence - ongoing change - encourage ongoing progress reporting - highlight achieved and future milestones.

8. Make change stick-Reinforce the value of successful change via recruitment, promotion, and new change leaders. Weave change into culture.

Solutions Overview

Business Value Enhancement has developed a set of process solutions-spread across the value chain, covering continuous operations at the base and consulting led value delivery at the pinnacle-that enable business transformation together.

Strategic

How do I optimize my business performance?

What should be my technology portfolio, both existing and new?

How do I mobilize the Enterprise for 24 X 7 operations?

Is the IT Portfolio aligned to my organizational business processes and architecture?

Does it make sense to get this done externally or to-do it myself?

Will this investment provide impetus to the planned growth?

While I have grown inorganically, how do I drive strategic alignment, efficiency, and effective operations?

Tactical

How do I simplify IT and Business Process landscape?

Do I have the basis for effective utilization of resources leading to the desired outcomes?

Can we improve significantly our historical returns by asset class and by business unit?

Am I prepared to deliver 'High Availability' and Continuity' to the business?

.Principal of change of management

1. Address the "human side" systematically. Any significant transformation creates "people issues." New leaders will be asked to step up, jobs will be changed, new skills and capabilities must be developed, and employees will be uncertain and resistant. Dealing with these issues on a reactive, case-by-case basis puts speed, morale, and results at risk. A formal approach for managing change - beginning with the leadership team and then engaging key stakeholders and leaders - should be developed early, and adapted often as change moves through the organization. This demands as much data collection and analysis, planning, and implementation discipline as does a redesign of strategy, systems, or processes..

2. Start at the top. Because change is inherently unsettling

for people at all levels of an organization, when it is on the horizon, all eyes will turn to the CEO and the leadership team for strength, support, and direction. The leaders themselves must embrace the new approaches first, both to challenge and to motivate the rest of the institution. They must speak with one voice and model the desired behaviors. The executive team also needs to understand that, although its public face may be one of unity, it, too, is composed of individuals who are going through stressful times and need to be supported

3. Involve every layer. As transformation programs progress from defining strategy and setting targets to design and implementation, they affect different levels of the organization. Change efforts must include plans for identifying leaders throughout the company and pushing responsibility for design and implementation down, so that change "cascades" through the organization. At each layer of the organization, the leaders who are identified and trained must be aligned to the company's vision, equipped to execute their specific mission, and motivated to make change happen

4. Make the formal case. Individuals are inherently rational

and will question to what extent change is needed, whether the company is headed in the right direction, and whether they want to commit personally to making change happen. They will look to the leadership for answers. The articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment.

5. Create ownership. Leaders of large change programs must

over perform during the transformation and be the zealots who create a critical mass among the work force in favor of change. This requires more than mere buy-in or passive agreement that the direction of change inacceptable. It demands ownership by leaders willing to accept responsibility for making change happen in all of the areas they influence or control. Ownership is oftenest created by involving people in identifying problems and crafting solutions. It is reinforced by incentives and rewards

New Management At Mahindra Satyam

On 5th February 2009, the six-member board appointed by the Government of India named A. S. Murthy as the new CEO of the firm with immediate effect. Murthy, an

electrical engineer, has been with Satyam since January1994 and was heading the Global Delivery Section before being appointed as CEO of the company. The two-day-

long board meeting also appointed (formerly with Tata Chemicals ) and Partho Datta, a

Chartered Accountant as special advisors