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CHANGE MANAGEMENT AT ICICI

CHANGE MANAGEMENT AT ICICI. Introduction. ICICI Bank is India is second largest bank, with over 50 years of financial experience and 14 million customers worldwide.

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CHANGE MANAGEMENT AT ICICI

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  1. CHANGE MANAGEMENT AT ICICI

  2. Introduction • ICICI Bank is India is second largest bank, with over 50 years of financial experience and 14 million customers worldwide. • ICICI Bank is the first Indian company to be listed on the New York Stock Exchange and is apart of the well-established and hugelysuccessful ICICI Group. MBA 623

  3. The Change Leader • In May 1996, K.V. Kamath (Kamath) replaced Narayan Vaghul (Vaghul), CEO of India's leading financial services company Industrial Credit and Investment Corporation of India (ICICI). • Immediately after taking charge, Kamath introduced massive changes in the organizational structure and the emphasis of the organization changed - from a development bank1 mode to that of a market-driven financial conglomerate.

  4. Change Challenges The first move being the creation of the 'infrastructure group (IIG),' 'oil & gas group (O&G),' 'planning and treasury department (PTD)' and the 'structured products group (SPG)', as the lending practices were quite different for all of these. As these new groups took on the key tasks, a majority of the work, along with a lot of good talent, shifted to the corporate center. While the zonal offices continued to do the same work - disbursing loans to corporates in the same region - their importance within the organization seemed to have diminished. Another change management problem surfaced as a result of ICICI's decision to focus its operations much more sharply around its customers. To tackle this problem, ICICI set up three new departments: major client group (MCG), growth client group (GCG) and personal finance group. In the major client group, a staff of about 30-40 people handled the needs of the top 100 customers of ICICI. Merger of bank of Madura (BOM) with ICICI bank

  5. Employee resistance The management had tremendous resistance in the first year. People were willing to come to blows and there were emotional breakdowns also. To face change resistance once again in December 2000, when ICICI Bank was merged with Bank of Madura (BoM) Though ICICI Bank was nearly three times the size of BoM, its staff strength was only 1,400 as against BoM's 2,500. Half of BoM's personnel were clerks and around 350 were subordinate staff. There were large differences in profiles, grades, designations and salaries of personnel in the two entities. This has come up with lot of unrest among the employees of BOM and also among ICICI. As the work culture of the two organizations was totally different. This has created strong resistance among the employees against the change of the management system, fear for unknown also originated in both the organizations.

  6. Question for discussion • What sort of management development programme do you suggest for this company? • Compare and contrast the change management process at ICICI initiated after Kamath became the CEO with the one following the ICICI-BoM merger. Also explain the rationale behind the employee resistance in both the cases

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