Running Header: Case Analysis - 2

Case Analysis-2-PNB Housing Finance Limited

Table of Contents

Introduction 3

Company Background 3

Factors which Influenced a need for Organizational Change 4

Challenges in Implementing Change Management………………………….……………………5

Steps taken to Implement Organizational Change…………………………… …………………..6

Recommendations…………………………………………………………………………………7

Conclusion 8

References 9
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Introduction:

In India there was growing market for consumers to acquire financing to purchase homes.

With the housing finance industry being able to provide long term finance there was mergers for

raising funds. Punjab National Bank Housing Finance Limited PNB a subsidiary of Punjab

National Bank entered a strategic partnership with a global investment firm to acquire gaps in

funding. While the finances where in place the PBN portfolio was stagnant in growth and there

were many undefined practices such as: an insufficient business operational standard, no clarity

on job roles, responsibilities and performance management, mismatched reporting hierarchy,

standard operating procedures (Vallabh et al, 2020). PBN required an overall haul in change

management, a transformation which would position it a stronger organizational structure

servicing customers, for success in performance, will managing resources, and allow it to adapt

to future initiatives successfully

Company Background:

Punjab National Bank Housing Finance Limited (PNB) is a subsidiary of one of India’s

largest banks - Punjab National Bank, which owns 72.6% of the Company’s equity, the

remaining is held by Destimoney Enterprises Private Limited a global investment firm (PNB

Housing, 2021). Established in 1988, its head office is in New Delhi and has over 1000

employees. At the start it had a market share of 0.4% with sluggish growth in comparison with

competitors even with it being affiliated with a national bank. It underwent management change

to be transformed into a competitive offering of products and services company which issues

equity shares in November 2016 which were listed on the National Stock Exchange and Bombay
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Stock Exchange. (PNB Housing, 2021). With a offices in India’s 17 provinces and 38 cities, with

a total of 47 branches. It was set up according to branch offices which offered sales, collections,

deposit, customer service, while its 16 processing hubs and zonal offices were back-office

support for its branches (Vallabh et al, 2020).

Factors which Influenced a need for Organizational Change:

There were multiple reasons why an organizational transformation was required. There are

external factors such as industry and market standing to internal factors: mismanagement of

human resource resources, lack of investment in technology, processes, and organizational goals.

If there is no clear structure organizational change management is required to focus on both the

micro and the macro levels. Whether requiring workers to learn new skills, reallocating

responsibilities and priorities or investing in new tools or software, organizational change

management process involves a top-down approach to managing change.

Since its conception PBN was still a small player in the industry with a small loan portfolio

in comparison to other companies. Even with the backing of a national bank which it was

leveraging to overshadow other competitors the subsidiary was behind in offering products and

services and lacking in growing the business Its target customer market undermined the quality

of loans, and its non-performing assets were 1.5 times the industry average, which hinder growth

(Vallabh et al, 2020).

The employees at PNB were hired based on an country wide examination, which did not

necessarily come with experience and limited. Public sector banks in India recruit professionals

based on performance in banking exams conducted around the year, with requirement to speak
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one local language and a diploma in computer operations, proficient in reasoning, general

knowledge, English, and math (Sheen, 2020). There wasn’t a job description which outlined

roles and responsibilities Reporting hierarchies did not make sense, this created confusion on

functional, accountability and demotivated employees from maintaining a high performance and

generating sales. The business did not have polices and procedures in place which did not

motivate the performance to achieve business objects because there was no clear direction.

Therefore, hiring and maintaining people with experience would be a challenge.

PNB was lacking in providing resources and tools to attain sales and clients. The overall

culture moral was low because there was no clear direction from the leadership team. Only in

2010 did the company higher a managing director- Sujaya Gupta. The processes were lacking in

standard operating requirements, the online platform was inadequate. It was a customer service

interface which did not provide feedback or easy to use. (Vallabh et al, 2020). Its ecosystem was

poorly coordinated, and decentralized management prevailed.

Challenges in Implementing Change Management:

PNB faced challenges from different fronts in implementing change management.

Employees who felt threatened with the changes, to reporting accountability, undefined

processes, technology and compliance etc. There was resistance to change and no motivation for

employees to improve their performance and achieve sales targets. (Vallabh et al, 2020).

Workers face the prospect of significant disruption of their work responsibilities. Fear of change

is normal, by tying to address their fears and issues and to address any concerns, would help the

change managers to mitigate the resistance. By trying to highlight how the changes support with

new company goals and emphasize how the as employees are important part to help to drive the
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change and make the organization successful. New branding was required to attract clients and

investment of infrastructure both brick and motor and technology.

Steps taken to Implement Organizational Change:

While managing change is not easy it requires commitment form the leadership team to not

only sponsor it but to continually show support and provide communications for the reasoning

behind the change along the way. Only then to move forward it requires a Change leader who

have a passion for their organization and its mission or else their energy and commitment will

diminish when the change they are advocating faces resistance and obstacles (Beatty, 2016).

PNB hired a globally recruited managing director Sajaya Gupta. He began with gathering the

information needed to attest the need for transformation, formulating a vision of the desired

future, determining on how much involvement other levels of the organization will have during

the change process, and setting up a transition structure to manage the change project through to

completion (Judge, 2012). Gupta prioritized what changes were required and where the

roadblocks would be, presented it to the board of directors who gave their approval. Gupta and

32 middle managers would communicate the change plan and asked employees to be evaluated

on various parameters to help understand the frame of mind of employees. Employees were

identified as Change Champions with the skills and support who would to help lead the process

and communicate with others. Their “ability to form alliances with individuals and groups—and

to convert them into supporters of the change—is essential” (Judge, 2012).

To implement a cultural transformation involved holding townhalls where executive

managers met, presented and interacted with different employees. They listened to their

opinions and concerns. A Skype-based communication channel and whistleblower online portal
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was set up to communicate with Gupta. At the same time there were seminars for employees on

the organization’s vision and values (Vallabh et al, 2020). There is never “over” communication

because when implementing changes being transparent and upfront is the key to getting support

and participation. Gupta and his team worked to introduce changes made to polices in

performance management polices, which showed a push for transparency, to empower and

motivate employees by sharing the same feedback from bottom to top (Vallabh et al, 2020).

There implementation plan contained training to upgrade skills to match roles and

responsibilities, how to function with new systems and platforms.

Investment was made to update their technology infrastructure to provide online information

systems and applications that were centralized. Social media and multiple marketing campaigns

were used to attract customers. The offices were remodelled for a clear modern look and so was

the overall organization structure to support overall organizational success. The new operating

model was as launched to support branches as points of contacts for customer while the hubs

supported the back office and used as knowledge centers.

Recommendations:

While PNB was successful in managing its transformation it still needs to keep up the

momentum. Employees are a great resource and asset that needs to be invested in. A coordinated

system of key positions works to bring about change in an organization, PBN needs to look at

mentoring employees so they can move to the next level in the organization. Then hiring

qualified recruits who can bring fresh and innovative ideas. Culturally while performance based

is good moving towards the company shred vision and values is important, it keeps employees

motivated and working towards the same goals and objectives. It is essential to continue to
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connect and interact with employees to speak about any concerns they may have and provide

feedback. So that they as individuals can help to maintain the change. At the same time the

organization needs to keep abreast with changing market and industry trends so that they can

adapt to changes as required.

Conclusion:

By understanding that remaining static will produce the same outcomes and that sometimes

changing things around is necessary to take an organization to the next level. PNB faced many

challenges on its journey to change management. Yet with a strong change sponsor, change

champions and the support of cross appointed managers changes were achieved due to an

coherent plan for change, communication to explain why it is required, working to creating a

climate where change would be accepted and implemented.

References:

Beatty, C. A. (2016). The Easy, Hard & Tough Work of Managing Change. Queen’s University

IRC. Retrieved from https://irc.queensu.ca/wp-content/uploads/articles/the-easy-hard-and-

tough-work-of-managing-change-carol-beatty.pdf

Judge, W (2012). Focusing on Organizational Change. Saylor Foundation. Print.

PNB Housing Finance Limited: About company, Board of Directors, leadership team. (2021,

May 18). Retrieved October 29, 2021, from https://www.pnbhousing.com/about-us/

Sheen. (2020, July 14). Scope in banking sector in India, career in banking sector after

graduation. Retrieved October 30, 2021, from

https://www.reviewadda.com/institute/article/72/scope-in-banking-sector-in-india

Vallabh, P., Das, R. and Jayaseelan, S. and Dhar, S. (2020). PNB Housing Finance Limited:

Toward Successful Transformation. Ivey Publishing. Product Number:

9B20M078. https://www.iveycases.com/ProductView.aspx?id=109323