Organizational Behaviour

MET’S INSTITUTE OF MANAGEMENT

A Project on “Organization Culture” A Report submitted to MET’S Institute of Management as a part of Organizational Behavior in partial fulfillment of the requirements of the curriculum of PGeMBA for the year ended 2008-09.

SUBMITTED TO: Prof. D.I. Cabral SUMBITTED BY: Rajeev Saigal 1

PGeMBA, Div –B, Roll No- 08111

INDEX SR NO.

CONTENTS

PAGE NO.

1.

Acknowledgement

3

2.

Synopsis

4

3.

Company Information

5

4.

Objective of the Project

8

5.

Organizational Culture

9

6.

Methodology

11

7.

Unfilled Questionnaire

12

8.

Analysis of Questions

13

9.

Conclusion

19

Bibliography

20

10.

2

ACKNOWLEDGEMENT I, Rajeev Saigal, student of MET College PGeMBA deem it my privilege to acknowledge and remain indebted to the people who by their rich and varied contribution have helped me in various concepts of my project. This project on Organizational Culture has been an enlightening experience for me. I would like to thank my Professor “D. Cabral” for his encouragement, guidance, and constant motivation which served as a driving force in the successful completion of the project. In Particular I am thankful to the HR for giving me the permission and the employees of Tata Consultancy Services Limited (TCS), who openly discussed their views and concerns, which helped me in shaping up the project to best of my abilities. I am still a part of TCS BPO and once had been an employee of AFS; fortunately I have been a part of the transition myself. Hence I choose this topic to further improve my understanding of organizational culture.

SYNOPSIS 3

Culture plays an important role in the growth, expansion, productivity and success of any organization. When the culture changes, it brings along a change in the form of new values, working styles, structure, beliefs and mission and vision of the company. For understanding the same, I have targeted employees of TCS BPO who were earlier a part of Airline Financial Support Services (AFS) group. A questionnaire was designed to analyze the understanding and interpretation of the organizational values, beliefs and traditions of both the companies by the employees. The experience of interviewing them was amazing as some of the employees spoke their heart out and a few of them expressed their desire to go back to the old culture and style of working. I have made my best effort in presenting the views and opinions of all the employees regarding the transition from old culture to the new culture.

COMPANY INFORMATION Airline Financial Support Services (AFS) AFS, formed in 1992, was set up as a joint venture of Swissair (holding 75.1 per cent) and Tata Sons (holding 24.9 per 4

cent) as a captive BPO arm of the airlines, to perform revenue accounting services. AFS offers a range of services extending from airline revenue accounting services, traffic accounting and cargo revenue accounting to passenger interline billing, navigation support, Level 1 h/w support and frequent flyer programme administration. AFS is poised to offer its services not just to the airlines, but also cater to the broad spectrum of the hospitality industry. Some of its other customers include Swiss, Tyrolean Airlines, Sabena, Austrian Airlines, Lauda Air, Malmoe Aviation, Loyalty Gate and Unit Pool, among others. With a strong focus on quality, based on its internally developed Total Quality Leadership model and a passion for its customers, AFS has retained its position as one of the leading providers of BPO solutions for the airlines industry. "AFS started as a 'pure play captive arm', to provide the core critical and complex services in airline revenue accounting for Swissair. Over the years, the company has grown its business, added new customers and now provides allied airline back-office processing services as well.

Tata Consultancy Services Tata Consultancy Services (TCS), a division of Tata Sons, is one of the world's largest global software and services consulting organization. Established in 1968 in Mumbai, TCS has more than 111,000 IT consultants in 50 countries around the world. Areas that TCS has operations in: 5

IT

services:

System

integration

solutions,

application

development, management services and testing solutions. Business solutions: Comprehensive strategies and solutions that enable customers to overcome their business challenges. Outsourcing: Services and programmes that help optimise discrete functions and manage business solutions and service areas. Consulting:

Defining

business

goals,

devising

strategies,

implementing solutions and verifying the effectiveness of these solutions. Business

process

outsourcing:

Industry-specific

offerings,

cross-industry shared services and platform-based solutions. Engineering manufacturing

and

industrial

sector

—

services:

aerospace,

Solutions

automotive,

for

the

industrial

machinery, utilities, pharmaceuticals, etc — to enable companies to achieve engineering excellence and operational efficiency. Business

intelligence

and

performance

management:

Business activity monitoring, business process and performance management, and knowledge discovery and management. Enterprise solutions: Managing supply chains, devising CRM strategies, deploying ERP solutions, etc. The expertise here spans enterprise product platforms, supply-chain management, master data management, customer relationship management and elearning. IT

infrastructure

management,

end

services: user

IT

service

computing

desk,

services,

data

centre

application 6

management services, command centre services and managed security services. Full service offerings: Integrated services across consulting, IT services, BPO, engineering services, business and enterprise solutions, etc. Innovation catalyst: TCS has innovation labs that work in new technology areas and attempt to achieve breakthroughs in new products and standards. The areas include next-generation software processes, human-computer interface, bioinformatics, nanotechnology, embedded solutions and grid computing. The company has over 1,000 global clients including eight of the US Fortune10 companies, namely, General Motors, Ford Motors, General

Electric,

Citigroup,

ChevronTexaco,

IBM,

Verizon

Communications and AIG.

OBJECTIVE OF THE PROJECT The main objective of this study is to understand and analyse the transition process of culture which takes place when an organization gets merged with another organization or gets completely taken over by another organization. In this case, Tata Consultancy Services Limited (TCS) acquired Airline Financial Support Services (AFS) on February 01, 2006 and since then there has been no looking back. The organization has grown by leaps and bounds and has acquired business worth five times more than AFS. 7

There has been a total change in the mission, vision, values, beliefs, organizational structure and hierarchy of the company and the objective was the study the transition process and employee re-actions to these changes happening around. I prepared a subjective questionnaire and spoke to a few AFS employees, most of them being the ones who have worked for more than 10 years with AFS. The questionnaire was designed in such a way that it would touch all the aspects of culture. I got an insight on the thoughts, experience and emotions that people go through when the culture of their organization changes; something they have to accept without any options.

ORGANIZATIONAL CULTURE Culture plays a significant role in the life of its organizational members. It has an impact on the attitudes and behaviours of employees. Just as society has a social culture; the place where people work has an organization culture. It is defined as a pattern of basic assumptions – invented, discovered or developed by a given group as it learns to cope with its problems of external adaption and internal integration – that has worked well enough to be considered valuable and, therefore, to be taught to new members as a correct way to perceive, think and feel in relation to those problems. Organizational culture starts up with a common lifestyle adopted by its members in the form of shared learning, behaviours, values & interests and provides the employees with a clear understanding of the way things are done around them in 8

their organization. Culture is considered to be a common perception held by their employees regarding their organization. Organizations too, like individuals, have personalities. Organizations can be viewed as rigid or flexible, unfriendly or supportive, innovative or conservative. Culture in an organization plays at different levels, dominant culture which is shared and accepted by the majority of the organization members, the next level to come are the sub cultures that exist at the micro level reflecting the common problems and situations faced by every member in the company within his group or department. A healthy organization culture rest on eight strong pillars of “OCTAPACE” referring to openness, confrontation, trust, authenticity, proactive, autonomy, collaboration and explicitness. Organization cultures can be categorized into strong and week cultures. A strong culture is generally developed by a strong leader. Besides the leadership factor, there are two other significant factors that reflect on the strength of the organization culture. These two factors are sharedness and intensity. Sharedness is the degree to which organizational members possess the same core values. Intensity refers to the degree of commitment to such core values by organization members. Generally an organization’s founders are the ultimate source of its culture. Employees learn culture from different sources, namely, stories, rituals, material symbols and language. Culture performs a number of functions in an organization. Firstly it plays a boundary defining role. Secondly it builds a sense of identity for its members. Thirdly culture generates and increases the level of commitment more than the self interest of an individual. Fourthly culture increases the stability of a social system. Lastly culture is a control mechanism that directs and shapes the attitude and behaviour of employees. 9

Sometimes an organization fells the need to change its culture. This may be due to drastic changes in the external environment, for which it needs to adapt in order to survive. However it is not east to change cultures and sometimes it cannot be done successfully. Some of the hindrances include entrenched skills, staffs, relationships, roles and structures that work together to reinforce traditional cultural patterns. Moreover, power stakeholders like union, management or even customers may lend support to the existing culture. In spite of these prominent barriers and resistance to change, cultures could be managed and changed over a period of time to match the competitive global requirements.

METHODOLOGY I have selected the questionnaire method in order to evaluate and understand the concept of organization culture. For filling up the questionnaire, Tata Consultancy Services Limited (TCS) was selected. This Questionnaire consists of 07 questions which are designed in such a way that they touch and cover all the data related to the transition from old culture to the new culture. I have made the respondents compare the old culture with the new culture and then tell me the advantages and drawbacks of both of them. Through these questions I have tried to study

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the positive and negative impacts the new culture has had on the employees and the profitability of the company. Since I knew most of the respondents personally, I had a healthy discussion with all of them, the length of the individual discussion being between 10 to 20 minutes. Descriptive answers enabled me to gather as much as information needed to understand and present the details of the transition from old culture to new culture.

QUESTIONNAIRE Kindly give descriptive answers to the following questions. Q1. Please tell me something about the organizational culture of TCS. Q2. How is it different from the culture of AFS? Q3. What kind of changes did you observe during the transition period? Q4. How are the organizational values of TCS different from AFS? Q5. How difficult was it for you/was there any resistance from your end in accepting the new culture? 11

Q6. Which of the 2 cultures do you feel is more favourable for healthy growth and competition amongst the employees as well as the organization? Q7. Would you like to suggest any changes/recommendations from your end to make this culture an ideal culture?

Analysis of question no.1 The organizational culture of TCS is transparent in terms of remuneration and its HR policies. There is a high level of employee engagement as the company pay structure motivates and encourages employees to perform better to earn a good amount of their performance pay. There is continuous improvement and growth of employees through various techniques like the T model. It is a professionally managed organization with client satisfaction as its top most priority. Employees are given high amount of respect and anyone and everyone is addressed as an “ASSOCIATE” to make him feel that his contribution matters. But there are a few who feel that TCS has a cold culture, by cold they mean that people are not bothered about you. Since there are 1,15,000 employees one feels as if he is a drop in the ocean and if he doesn’t make it one day to work, TCS will not be affected much. 12

Others said that TCS has a dynamic culture and there are lot of social activities which the company undertakes to help the poor and needy. One such initiative is the TCS Maitree, it is a non profit subsidiary of TCS which engages the employees to come ahead and teach the under privileged children or hold a camp in a rural area to educate them about the use of computers. This makes them a proud employee and they are happy to be associated with the brand name TATA.

PS – T Model is a new software designed by TCS, all the employee data pertaining to his tenure, skill set, competencies, etc are fed and then the software gives the three best domains where the employee would best be suited. This model when launched will help in smooth inter departmental transfers.

Analysis of question no.2 Every one responded by saying that AFS was a much smaller setup with a flat organizational structure managed and monitored by the senior management. The culture was wide open and flexible in nature, everyone knew whom to consult if they had a problem and there was a high standard of service delivery and quality of work. It was a highly professional organization with very good board room etiquettes, strict policies when it came to meeting of assignments, the people were very punctual and the dress code was purely formal with a tie being compulsory from Mon to Thursday. There was a high level of discipline amongst the employees not only with the senior management but discipline being visible at the lowest level of associates. Most respondents mentioned that the policies and procedures of TCS are well documented but they keep on changing regularly, by the time to understand and 13

digest one policy, you will be surprised to find that it has been changed or something new is in store for you. AFS was not much into corporate social responsibility and the culture was very work centric. The level one associates did the same routine job for years with very less inter departmental transfers. But the company functioned like one big family and the owners had a sense of oneness and belonging with all the employees of the organization. More than 75 % of the employees were Paarsis and everyone knew everybody in the company. Most surprising is the fact that the company did not have a HR department for more than 10 years and it was only recently that they had something called HR with a single women employee who called herself “one women army”.

Analysis of question no.3 There were a lot of changes that happened during the transition period with employee pay structure being the most important and talked about. There were a few employees who were not happy with the takeover and they left the company as soon as the ownership changed hands. This fact is very much true with the CEO of AFS resigning and others following suit. But the ones that stayed benefited since the pay structure of all the employees was revised and bought up as per the industry standards. People at the top management got fat raises and this made the people all the happier with the takeover. Another important change was the grade structure which was changed to match with the BPO structure, the junior associates became BPO1 and the senior most employees became BPO 8. The organizational structure changed completely with the new structure being very complicated and level of approval cycle 14

for any request being difficult. Worst was that employees did not know whom to contact in this new hierarchy and no one knew who their Project Owner or Group Leader was for a while. The billing system changed completely and the management found it very difficult to learn the new TCS system of client management and employee allocations. Tie was now not required and the employees could wear casuals on Fridays, there were many projects that required employees to work round the clock and now the canteen was thrown open 24/7.

Analysis of question no.4 The values of TCS are ethical, there is something called as TATA Code of Conduct which the HR makes sure is followed by one and all. Immense efforts are made during induction time for all the new employees to educate them about the culture, values and policies of the organization. One of the respondents mentioned that TCS is not doing its business from people but TCS is doing business with people. It was nice to come across people who are really happy with their job and are high on positive energy. The vision, mission, policies and procedures are very much in place, if you compare this with AFS – there was a mission but hardly anyone knew about the same. Here everything is well defined and documented. But there are others who feel that adequate support is not there from people, that family feeling “Let’s do it together” is missing and baring a new people the drive is not there in everyone to achieve. 15

Analysis of question no.5 This was the most important question which has made it clear that when the organization culture changes in any company the employees of the company have little choice but to accept it. The only option left here is to quit, which a few employees did as mentioned earlier but the others have accepted it and mentioned that there is no sense in blocking it.

Analysis of question no.6 As mentioned earlier, TCS has a performance based pay. The appraisal happens twice a year and the final rating is decided on the average. The pay raise depends on the rating one receives with A being the highest and E being the lowest. This keeps the employees on their toes all year round and they put their best foot forward to earn a good pay raise. There are a lot of IJP’s that happen all year round which gives the employees a platform to perform and excel. If an employee is unable to perform as per the company expectations, the company provides adequate training and opportunities to ensure maximum efficiency and productivity from that particular employee, this is commonly known as PIP (Performance Improvement Plan). Hence everyone felt that TCS provided a more favourable environment for health growth and competition. 16

But there was one respondent who felt that the performance appraisal was more fare in AFS rather than TCS. In AFS an employee was promoted after certain years of service in a particular grade, everyone was given an equal opportunity to perform and excel. Only if the employee was incompetent he was denied a promotion. But here in TCS, it is only the high performers to get promotions and the average performers at the managerial level hardly get a chance to get promoted. This was observed to be a strong dissatisfier amongst the old AFS employees.

Analysis of question no.7 The culture at TCS is dynamic and favourable for healthy growth and competition. It is in accordance with the global culture that demands high standards of quality and productivity. But my respondents have a few suggestions that would help make this culture the ideal culture. According to one of them, the performance appraisal should also consider the seniority of an individual. An employee after certain years of experience at a particular position should be promoted to the next level and company should provide adequate training and development facilities for the same. Another employee suggested that the work environment needs to become a bit more relaxed and employees should be given the liberty to work and enjoy. The number of social and cultural events should increase and focus should be on employee participation. Also resources need to be allocated in the right areas; right now resources are less where they are required and more where 17

they are not required. Effective planning and organization needs to be done to evenly distribute the resources. Last but not the least, one respondent suggested that the dress code needs to be a bit more formal; employees should wear a tie between Mondays and Thursdays because there are a lot of client visits happening in the BPO area. Hence a more professional image of the organization needs to be created and presented.

CONCLUSION Coming to the end of this project, I wish to mention that my study at TCS has given me a lot of insight on the emotions, experiences, changes and adjustments that organizations and its employees have to go through when their culture changes to keep up with the current trends. Here, it was important to bring in a new culture and ownership change because TCS has the bandwidth, excellence, resources, experience and capability to grow and excel in the BPO industry. Since the takeover the number of projects and employees at BPO has increased to five times the initial size only in 2 years time. It has been able to attract big companies like Dow Chemicals and GSK that now together form one-third of its revenues. The culture at AFS now known as TCS has changed completely and I conclude that a few of the AFS employees are still coping up with the cultural shocks as a result of the 18

changes. They would still prefer to go back to the old culture if there was an option available. Others have accepted and moved on enjoying the challenges and opportunities that have come along with the culture change.

BIBLIOGRAPHY Book References • Handouts on Organizational Culture given to me my Cabral sir. Websites • www.google.com • www.tcs.com

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