Case Study Can a Strong Culture Be Too Strong

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Apr 3, 2024

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Can a Strong Culture Be Too Strong?  How would you describe the organizational culture at Parivar? What are its strengths and weaknesses? Parivar is a growing IT company in Chennai, but it's struggling to maintain its organizational culture compared to bigger competitors like HCL and Infosys. The company has two main types of culture: personal and adaptive and flexible. Employee turnover has gone up in recent years, worrying managers. The VP of HR mentioned in the case study that employees are leaving faster than the recruiting team can replace them. To address this, the CEO wants to focus on employee retention by adopting a personal culture. This means taking care of employees' needs and listening to their concerns. They plan to do this by appointing a group of managers whose job is to listen to employees and address their needs. Strengths  Parivar company is growing in revenue, profitability, and reputation.  Employees from across the company, especially newcomers and young staff, were invited to participate in brainstorming and design sessions with senior leaders. This event reflects Parivar's inclusive culture and aims to promote collaboration and an entrepreneurial mindset.  Sudhir's emphasis on nurturing a supportive culture is a major attraction for recruits. Prospective employees appreciate the opportunity to have their voices heard and feel valued by Parivar and its managers, including Sudhir. Weakness  The company is experiencing a high turnover rate, with employees leaving faster than the recruitment team can replace them, resulting in a turnover rate of up to 35%.  Despite its growth, Parivar remains significantly smaller than industry giants like Infosys and HCL, and other global leaders in business process outsourcing services.  While Parivar's culture may initially attract prospective employees, it struggles to retain them, particularly when competitors offer substantial pay raises of up to 30%.  The personalized attention provided by the CEO is selective and only extended to a few favored individuals, rather than being inclusive across the organization. Describe CEO Sudhir Gupta’s leadership style. How does it shape the organizational culture?

Sudhir Gupta's has a strong belief in the 'people-focused' culture and believes it will nurture both people and the company's global development. Sudhir is described as charismatic and a good listener. His interaction with staff and customers is highly valued. Sudhir Gupta and other executives show that he is a people person, understanding nuances of emotions, thus fostering closer bonds with employees. As a result, his company's leadership style will promote loyalty and retention rates. Valuing principles - Sudhir is highly aligned with the philosophy of 'love - culture' and 'everyone matters'. He aims to steer the company towards a Human Support function in a natural way rather than artificial formality. The CEO values entrepreneurial spirit as evident from how newcomers like Nisha are allowed to present in meetings of top executives. However, he also appreciates young individuals with bold ideas; and whenever he encounters them, he encourages solutions rather than dwelling on problems. Risk-taking - Acceptance is the most suitable term to describe Sudhir as he acknowledges the risks when applying his human-focused cultural philosophy. Nonetheless, he continues to pursue the People Support function despite the risks because he believes in innovation through satisfying his people. Despite being a great CEO and a living example for the desired company culture, he still lacks time to meet with employees as Amal notes that he rarely visits the office and Amal has never spoken to him. Sudhir takes on too much responsibility, making it difficult for him to handle everything, seemingly missing out on valuable opportunities.  What has been his role in shaping the organization’s culture? As CEO, Sudhir Gupta has influenced Parivar's culture by encouraging empathy, inclusivity, and innovation. He supports entrepreneurial thinking and bold ideas, and he created initiatives like People Support to help employees, promoting a culture of mutual support and well-being.  What do you recommend Pandit do with high turnover? I recommend Pandit to conduct thorough exit interviews to understand the reasons behind the high turnover. Based on the feedback received, Pandit can implement measures to address the underlying issues causing employees to leave. This could involve improving workplace culture, offering competitive benefits, providing opportunities for growth and development, and ensuring effective communication channels to address employee concerns. Additionally, Pandit should focus on employee engagement and retention strategies to create a more positive and supportive work environment.

 How relevant is the managerial/business situation discussed in the case to your company (or to your role in your organization)? The managerial and business situation discussed in the case study is highly relevant to my company, especially in terms of addressing attrition challenges. At Allstate, particularly in the India branch, attrition is a significant concern, mirroring the scenario described in the case study. Employees often leave shortly after receiving bonuses and pay hikes, typically around March or April. The competitive job market makes it difficult to retain talent, as individuals are frequently lured away by substantial salary increases ranging from 15% to 25%. This high turnover rate poses considerable challenges for talent retention and organizational stability, requiring proactive strategies to address the issue effectively.  If you faced this situation in your company, given the resources and goals of your organization, what would a realistic action plan be? As discussed above, even Allstate India is facing the same issue. If I get the opportunity to handle such a scenario, I will ensure that the exit interview process is robust, where we ask for the exact reasons for leaving and what could prevent it. Informally speaking with colleagues at the India branch, I see that while salary hikes are one concern, the mandatory office attendance policy is also contributing to resignations. Many of them are resigning because they have to travel 1 to 1.5 hours each way to reach the office. I think I will remove this mandate and make it flexible, allowing employees to work in the office for 1 or 2 days a week. By doing this, I believe we can reduce attrition by 35-45%. Additionally, giving them flexibility to work in different shifts, such as from noon to late evening or early morning to late afternoon, would further enhance employee satisfaction and promote a positive work culture. Resources will definitely appreciate this idea and also believe that the company is promoting a good work culture by implementing employee-friendly policies.

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Case Study Can a Strong Culture Be Too Strong

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