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POWER DYNAMICS (A): POLITICAL CATALYST IN ORGANIZATIONAL
TRANSFORMATION
Kalpana Sahoo and Partha Das wrote this case solely to provide material for class discussion. The authors do not intend to illustrate
either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying
information to protect confidentiality.
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Copyright © 2024, Ivey Business School Foundation
Version: 2024-09-10
Companies often operated by distributing authority and setting a tone of power without paying attention to
the nuances. It was no wonder, therefore, that individuals who were highly motivated to secure and use
power found a familiar and hospitable environment in business. When managers purported to make
decisions based on rationality, most observers and participants might have experienced a sense of disbelief,
as they knew that personalities and politics played a significant if not an overriding role in decision-making.
Where did the error lie?
tC
E-India Ltd. (E-India), a major player in India’s telecom sector headquartered in India, made headlines in early
2021 with its acquisition of THEPSU, a public sector enterprise, marking a significant milestone in the country’s
telecom privatization landscape. The merger brought together two distinct organizational cultures, each with its
own unique approaches and operational philosophies, presenting formidable challenges in integration and
cultural alignment. Leading the charge was Aisha Khan, E-India’s newly appointed chief human resources
officer (CHRO), known for her strategic vision and ability to navigate complex organizational transitions.
No
While Khan recognized the potential within the existing human resources (HR) team from THEPSU, she
was looking to align their roles effectively within E-India. She intended for the team to comprise both
professionally qualified young managers and individuals who had risen through the ranks, hoping to create
a blend of backgrounds and experiences.
Do
For Eknath Mohan, a young and ambitious HR professional based in THEPSU’s northern region office, the
transition posed both opportunities and uncertainties. Coming from THEPSU’s bureaucratic environment,
Mohan had excelled with his proactive and resilient work style, albeit within constraints. Adapting to the
fast-paced dynamics of a private sector environment could potentially pose challenges, given the more
relaxed culture of THEPSU. As E-India embarked on merging these contrasting cultures, Mohan hoped to
make significant contributions under Khan’s leadership, aligning with her vision for a more dynamic and
progressive HR approach.
However, as the merger progressed, it became evident that internal competition and unfair practices might
be issues. This environment could pose risks to team cohesion and performance, potentially necessitating
careful management of organizational culture during the integration process. Amid these changes, Mohan
wondered how he might strategically position himself to enhance his career outcomes within E-India given
the turbulent environment.
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THEPSU
THEPSU was a well-performing and reputable public sector manufacturing enterprise with a long-standing
presence across all regions of the country. However, it faced challenges such as legacy issues, bureaucratic
processes, traditional thought practices, excess workforce, and a lack of priority placed on business
performance and profitability. The news of its acquisition came as a shock, as privatizing public sector
firms was uncommon at the time. The announcement caused significant anxiety among employees, eliciting
mixed reactions. Trade unions became highly active, protesting vehemently against the privatization. The
change was unwelcome for most employees but was met with optimism by younger, ambitious individuals.
Speculation about job security and prospects became rampant. The initial months following the acquisition
were marked by uncertainty and other typical signs of a merger.
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E-INDIA
E-India was a large, reputable Indian conglomerate known for its ethics, values, and strong presence in the
country. It had pioneered many practices related to developing a strong people culture. The leadership exuded
confidence regarding the success of the merger, although reality proved otherwise, as THEPSU had its own
nuances and operating style. Initial communications focused on instilling confidence among employees, and
several meetings involving senior leaders were convened to familiarize THEPSU employees with the merger
process. The objective was to assure employees that the integration would not drastically alter their lives.
tC
Over time, strategies emerged to shift the work culture significantly. However, challenges soon became
apparent as developments unfolded. While younger employees eagerly embraced E-India’s agile and
performance-driven culture, older employees expressed concerns about job security. The first few years were
a struggle for survival, fostering intense internal competition. E-India introduced tools like assessment centres
to assess employee potential, reduce bias, and gain a competitive edge. Perhaps the missing element was HR
business partnering; stakeholders could have been better informed about the objectives of HR interventions.
Merger and Acquisition
No
To embark on its journey, E-India initiated communication channels such as town halls and separate
meetings for different groups. Khan and her team led these efforts to spread awareness. During this turbulent
period for the acquired organization, employees were apprehensive, fearing for their job security. E-India
had not fully anticipated the complexities it faced, as its planning had been insufficient. The leadership
team decided to proceed cautiously, implementing changes gradually and carefully considering resistance.
Do
They gradually identified several issues among the existing personnel, including surplus staff,
incompetence, inefficiency, underperformance, lack of business acumen, complacency, and a laid-back,
unprofessional approach. To address these problems, there was a pressing need to stabilize the middle and
senior management levels and implement a strategic top-down approach to gain a competitive advantage.
To streamline the workforce and improve efficiency, E-India chose to introduce multiple rounds of a
voluntary retirement scheme (VRS) rather than involuntary separations. The goal was to reduce the
workforce from 3,000 to 1,500 employees. Approximately 1,700 employees met the VRS eligibility criteria,
which included being over 40 years old and having at least 10 years of service. Despite significant
opposition from employee representatives, HR task forces were established to ensure the smooth execution
of the VRS. The HR helpdesk played a crucial role in assisting eligible employees, addressing their
frequently asked questions and clarifying the VRS terms.
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Nuances of the Merger and Integration
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Amid the uncertainty, about 1,000 employees (300 executives and 700 non-executives) chose to take the
VRS in the initial phase. Many of these employees were compelled to retire voluntarily due to their
inefficiency. Professionally qualified employees like Mohan, who had achieved managerial positions
through nationwide competitive exams, underwent evaluations through assessment centres. Those who
successfully passed these assessments were retained and offered enhanced roles, including leading special
projects aimed at implementing various new initiatives.
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Overall, the culture underwent a significant transformation with the arrival of new personnel and the departure
of long-standing employees. Established practices were replaced with modern HR approaches. However, this
transition came with drawbacks. There was a noticeable lack of transparency and collaborative effort. Many
processes were handled in a secretive manner, which fostered working in silos instead of a cohesive team
approach. The prevailing atmosphere of insecurity hindered genuine teamwork and collaboration.
Many organizations observed that young managers often chose to leave due to experiencing professional
jealousy or insecurity from their superiors, peers, and senior colleagues. These individuals, typically highperforming and high-potential, were often mistreated because their superior performance threatened others.
This perception of threat led to them being targeted by colleagues and peers. High-performing individuals
who contributed selflessly to the organization often inadvertently highlighted the inadequacies of average
performers. How had Mohan found himself in such a predicament?
Organizational Structure and the Change in HR Practices
tC
Khan assumed leadership of the HR function at the corporate office, overseeing corporate vertical leaders
in talent acquisition, HR business partnering, learning and organizational development, compensation and
benefits, and compliance. Reporting directly to her were four regional HR managers, each responsible for
managing five or six locations with four to five direct reports at regional offices, and unit HR managers at
each location. Her rapport with team members based at the corporate office was stronger than with those at
other locations due to proximity.
No
Under Khan’s leadership, there was a marked emphasis on core HR activities as part of a cultural
transformation initiative. This evolution was evident through organizational development efforts, such as
the rollout of a robust key result area (KRA)-based performance management system (PMS). The company
made significant investments in learning and development initiatives, including workshops aimed at
enhancing both skills and behavioural attributes among HR personnel. Technological advancements
included the automation of HR processes through a systems, applications, and products platform,
positioning many of them as ahead of their time.
Do
Despite these advancements, the primary challenge lay in execution and achieving effectiveness,
particularly in driving cultural change throughout the organization. Initially supportive of the core HR
initiatives, Mohan experienced challenges stemming from leadership changes and stark differences in
management styles.
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EKNATH MOHAN
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Mohan had been part of the regional HR team for Northern India for the last four years, establishing
visibility through his knowledge, skills, networking, and contributions. He entered through an all-India
level competitive examination and reported to multiple managers during this period. Ambitious and eager
to contribute, he navigated post-merger interventions and was recognized as a high-potential employee.
Actively involved in mergers and acquisitions, he played a crucial role in initiatives such as the VRS,
process alignments such as organizing meetings and KRA-setting workshops, and HR automation. He
preferred private sector culture and had not enjoyed his previous stint in the public sector. His visibility
also grew with experience and accomplishments, leading to increased responsibilities delegated by his
manager, Jay Sharma, based on his performance. Sharma, his reporting manager for the last year, had
developed confidence in Mohan, empowering him to lead new projects due to his proactive and diligent
behaviour. Sharma was a supportive leader who fostered a learning and performance culture, but
unfortunately he moved to the corporate head office (HO) in Mumbai for a higher assignment. He was
replaced by Vinod Aziz from the HO in Mumbai, who took time to settle in.
Mohan felt his momentum wane with the change in leadership. Aziz’s leadership style differed significantly
from Sharma’s. Aziz delegated tasks without leading by example or prioritizing effectively, struggled to
adapt to agile corporate culture, and frequently delayed or did not make decisions. He often advised Mohan
to attend critical decision-making meetings on his behalf, leaving Mohan in a challenging position without
empowerment for certain decisions. Despite expressing his challenges to Aziz, Mohan found it difficult to
adjust to his leadership style. During his performance appraisal that year, Mohan faced difficulties due to
Aziz’s tendency to centralize feedback, though he managed to convince Aziz of his contributions and secure
a better score. Aziz’s laid-back approach inadvertently raised Mohan’s visibility as he became the face of
the HR department and was informally accepted as the head of HR for the region. Stakeholders did not
perceive Aziz as a competent leader.
No
tC
Mohan’s assertive and straightforward communication style further distanced him from Aziz. Additionally,
several of Mohan’s peers, including Mohammad Syed, Rohan Patel, and Zainab Hassan, also reported to Aziz.
Mohan, senior to these three, had mentored them since they joined the organization, forming strong bonds.
Despite their different roles, they frequently sought Mohan’s guidance. Each of them had distinct
characteristics: Patel, who typically avoided direct involvement, chose to move to another department within
E-India; Syed, known for his easy-going nature, was unsure about his future; and Hassan, less assertive, grew
insecure with the changes and developed a closer relationship with Aziz, capitalizing on the strained dynamic
between Aziz and Mohan. By the time Mohan realized what Hassan was doing, Aziz had decided to change
Mohan’s role. When Mohan questioned Aziz about this, he cryptically replied, “Let it be a surprise.”
Do
One morning, Aziz informed Mohan that his role had been swapped with Hassan’s, effective immediately.
Mohan was deeply shocked as there had been no prior discussion. He could not accept the change,
considering the significant effort he had invested in developing systems and processes for various tasks
such as talent acquisition, the PMS, KRA formulation, conducting KRA workshops, HR automation, and
other crucial assignments like streamlining onboarding processes. In response to this announcement, Mohan
chose to initiate a dialogue with Aziz to understand the rationale behind the change. He was informed that
Hassan lacked visibility and needed to be entrusted with important assignments to gain exposure. Mohan
felt disappointed and expressed his disagreement with Aziz, which resulted in a brief discussion. During
the discussion, it became apparent that, due to his profound insecurity, Hassan had provided Aziz with some
insights about the need for the job rotation. Mohan confronted Aziz, arguing that his visibility was a result
of his efforts, not chance. However, Aziz maintained his decision. He even informed Mohan that he could
contribute more effectively at HO due to his enthusiasm for strategic work. Mohan, however, was reluctant
to relocate to Mumbai at that time and thus accepted the initial role Aziz put forth.
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While settling into his new role as a manager within the department of learning and development and
employee engagement, Mohan received a transfer letter for relocation to HO, much against his wishes. Aziz
had imposed the transfer to improve conditions for Hassan. Mohan had no option but to relocate; even his
request for a six-month extension was denied. These events happened so quickly that Mohan’s life was
disrupted. He felt he had been uprooted from the foundation he had built through sheer hard work. Moving to
Mumbai was a heavy-hearted decision for Mohan. Despite having purchased a flat in Delhi, he never had the
chance to live there.
SHANTANU AHMAD
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Mohan’s new boss at HO in Mumbai was Shantanu Ahmad, who reported to the CHRO. Ahmad, a THEPSU
veteran, had established a rapport with Khan and adhered strictly to traditional HR practices, emphasizing
hierarchy. An introvert who resisted change, Ahmad was tasked by Khan with integrating Mohan into his
team and assigning him specific responsibilities.
Mohan struggled for a month to settle into the new environment, feeling unwelcome and lacking a clearly
defined role. He never felt comfortable at work. Ahmad, showing little concern for Mohan’s integration,
did not prioritize defining his role. Mohan felt uprooted from his settled life and sensed that his colleagues
at HO viewed him as a threat. Despite this, he was determined to assimilate without disrupting his
relationships with Ahmad or others at HO, and carefully monitored his behaviour.
tC
Eventually, Mohan was assigned responsibility for talent acquisition and onboarding, including leadership
and campus hiring, a role that brought him satisfaction. Khan wished him luck in his future endeavours.
Mohan was eager to introduce new dimensions to the talent acquisition and onboarding processes.
Overcoming initial doubts, he began adding a strategic perspective to his tasks and successfully attracted
talent by effectively promoting E-India’s brand and work culture.
Mohan’s Encounters
No
In August 2021, both Mohan and Ahmad received an email from Khan mandating them to hire 200 graduate
engineering trainees (GETs) through campus placements for immediate business expansion plans. By then,
the campus placement process had concluded at most reputable engineering colleges. Ahmad, not optimistic,
delegated the project to Mohan, stating, “All the placement drives must have finished. It’s not worth our time.
You can try if you want, but I’m not hopeful. You should update the boss on the real situation.”
Mohan wasted no time in getting started on this significant assignment and was unconcerned with the job’s
complexities. His goal was to onboard 200 GETs.
Do
Mohan began by establishing connections with placement officers at various regional engineering colleges
across the country. He was pleased to discover that there were still good students available. Through
effective branding, Mohan attracted a substantial number of applicants and kept the process moving
forward. From the outset, he managed the entire process independently, without Ahmad’s support.
Mohan oversaw the end-to-end process, which included forming interview panels, scheduling interview dates,
coordinating the selection process, and issuing on-the-spot offers. The process gained momentum and lasted
two months. Mohan was so immersed in his work that he had little time to attend to other matters at the office.
Initially, Ahmad filled 206 GET positions, ensuring that offers were made on schedule. However, due to some
dropouts after hiring, only 196 GETs were ultimately onboarded. This achievement brought him great job
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satisfaction, and he viewed it as a significant milestone in his professional journey. However, his celebrations
were short-lived. He soon realized that he had not received any recognition from Ahmad or anyone else for
his success. Ahmad had neglected to inform Khan about Mohan’s contributions, and she was unaware that
Mohan had single-handedly driven the entire campus placement project.
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One afternoon, upon learning about the onboarding of 196 GETs, Khan approached Ahmad’s workstation
and congratulated him on the significant achievement. She praised Ahmad, believing he had played a crucial
role in the project’s success. Mohan was also present with Ahmad at that time. However, Ahmad neglected
to acknowledge Mohan’s exemplary efforts to Khan, instead taking full credit for the job Mohan had done
well. Ahmad gave Khan the impression that he had led the project, as formal skip-level interactions were
not allowed. Mohan never had the opportunity to update Khan about his role in the hiring of the GETs. This
incident devastated Mohan. All his happiness in his achievement vanished, leaving him feeling betrayed
and shattered. This was the last thing Mohan had expected from Ahmad. His morale plummeted, and he
felt disengaged, cursing his luck. Meanwhile, Ahmad was elated to be appreciated for someone else’s hard
work. Mohan decided to move on and relocate from Delhi to Mumbai.
Mohan observed that the corporate culture at HO lacked transparency and, without hesitation, began his job
search the next day. Khan, known for her meticulous professionalism and transformative abilities, had been
brought in to manage the intricate merger and acquisition process. Despite her effective execution of duties,
she made a critical error by placing unwavering trust in some of her direct reports, who often misused it.
tC
Khan’s approach to managing her team also contributed to the issues. She frequently received negative
feedback from her direct reports regarding the performance and behaviour of team members based at other
locations. Moreover, Khan’s participation in lunchroom gossip and forming opinions based on hearsay
allowed toxic individuals to gain undue influence. These individuals became central figures in a negative
culture that ultimately damaged many careers, including Mohan’s.
Do
No
Mohan’s own situation took a severe turn when his name did not appear on the promotion list that year,
despite his substantial contributions over the previous years. The promotion system was tainted by bias and
favouritism, with Aziz playing a significant role in this unjust process. This development was a crushing
blow to Mohan, leaving him disillusioned with his future at E-India.
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