Org..Change and Develpoment

8/9/2019 Org..Change and Develpoment

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lakshmi mittal private limited company

TypeSocit Anonyme (Euronext: MT,

NYSE: MT, BMAD: MTS, LuxSE: MT)

Industry Steel

Founded 2006

HeadquartersAvenue de la Libert,Luxembourg,

Luxembourg

Area served Worldwide

Key peopleLakshmi Mittal(ChairmanandCEO)

Aditya Mittal(CFO)

Products

Steel, flat steel products, long steel

products,stainless steel, wire products,

plates

Revenue US$65.11 billion (2009)

Operating

income (US$1.678 billion) (2009)

Pro fit US$118 million (2009)

Total assets US$127.7 billion (2009)

Total equity US$65.40 billion (2009)

Employees 281,700 (2009)

Website www.arcelormittal.com

ArcelorMittal(Euronext: MT, NYSE:MT,BMAD:MTS, LuxSE: MT) is thelargeststeelcompany in the world, with over 281,000 employees in more than 60 countries. The

company was formed in 2006 by themergerofArcelorand Mittal Steel. It ranks 28th on the2009 Fortune Global 500 list. The company is headquartered in Luxembourg City, theformer seat ofArcelor.

About ArcelorMittal
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ArcelorMittal is the world's number one steel company, with 320,000 employees in more

than 60 countries. The company brings together the world's number one and number two

steel companies, Arcelor and Mittal Steel.

ArcelorMittal is the leader in all major global markets, including automotive, construction,

household appliances and packaging, with leading R&D and technology, as well as

sizeable captive supplies of raw materials and outstanding distribution networks. An

industrial presence in 27 European, Asian, African and American countries exposes the

company to all the key steel markets, from emerging to mature, positions it will be looking

to develop in the high-growth Chinese and Indian markets.

ArcelorMittal key pro forma financials for 2006 show combined revenues of USD 88.6

billions, with a crude steel production of 118 million tonnes, representing around 10 per

cent of world steel output.

ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris

(MTP), Brussels (MTBL), Luxembourg (MT) and on the Spanish stock exchanges of

Barcelona, Bilbao, Madrid (MTS) and Valencia.

Business

ArcelorMittal is the world's largest steel company and is the market leader in steel for use inautomotive,construction,household appliances and packaging. It holds sizeable captivesupplies of raw materials and operates extensive distribution networks.

Its industrial presence inEurope,Asia,Africa and the Americas gives the Group exposureto all the key steel markets, from emerging to mature. ArcelorMittal is looking to developpositions in the high-growth Indian and Chinese markets.

ArcelorMittal key financials for 2007 show revenues of US$105.2 billion, with a crude steelproduction of 116 million tonnes, representing around 10% of world steel output.

ArcelorMittal is listed on the stock exchanges ofNew York, Amsterdam,Paris, Brussels,Luxembourg and on the Spanish stock exchanges of Barcelona, Bilbao,Madrid andValencia.]

As of 4 November 2008, the market capitalisation of ArcelorMittal was $35.37B]

In December, 2008, ArcelorMittal announced several plant closings, including the formerBethlehem Steelplant in Lackawanna, NY and LTV Steel in Hennepin, IL.

On 30 June 2010, the European Commission fined 17 steel producers a total of 518mtoday for running a price-fixing cartel, with ArcelorMittal hit the hardest.
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Organizational structure

Lakshmi Mittal (owner of Mittal Steel), a non-resident Indian, is the Chairman and CEO.

The composition of ArcelorMittal's Group Management Board is as follows: Lakshmi N.Mittal (Chairman and CEO), Aditya Mittal (CFO), Michel Wurth, Gonzalo Urquijo, Sudhir

Maheshwari, Christophe Cornier, Davinder Chugh and Peter Kukielski.

ArcelorMittal's 11-member Board of Directors is responsible for the overall supervision ofthe company. The composition of the Board of Directors reflects the principles agreed inthe memorandum of understanding dated 25 June 2006.

Head office

Headquarters inLuxembourg City

Headquarters in LuxembourgCity

Headquarters inLuxembourg City

The head office of ArcelorMittal is in Luxembourg City, and 600 employees work there. Thebuilding was the head office ofArbed before that company merged with Aceralia andUsinor.

Lakshmi Mittal

The steel magnate shares with BusinessWeekhis thoughts about reshaping theglobal steel industry and son Aditya's role in Arcelor Mittal (name of the company)

Lakshmi Mittal, 56, pulled off one his most daring deals last year when he acquired Arcelorfor $38 billion after a long, hostile takeover battle. It was the biggest move yet in anextraordinary career that began with a small steel mill in Indonesia in the 1970s. Startingfrom that humble spot, Mittal has snatched up about 10% of world steel capacity and built a$90 billion empire.

Over the last few months, BusinessWeekLondon bureau chief Stanley Reed talked toMittal at his home in London and his office on Berkeley Square about the steel industry; thenew company, Arcelor Mittal; his career; and his family. Here are edited excerpts from theirconversations.

On the strengths of the new company:

As I always said, there is a very strong industrial logic to this merger. We are now the No. 1
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producer in five major regions of the world. For example, we have 46% market share inautos. Mittal Steel had a very lean organization; Arcelor did not have a lean organization.We needed to strengthen our middle management at Mittal Steel. Arcelor provided theopportunity to strengthen our middle management. Arcelor had very good people with a lotof experience.

On the need to change the Arcelor Eurocrat culture:

It is the culture of the organization that has to change, not the people. There is no need tobe bureaucratic. We need to make decisions swiftly, take risks, and move forward. If somepeople cannot change, we will have to change them. We cannot allow strong bureaucracyin our organization. We are a public company; we have to deliver results every day.

On choosing a new management team:

I interviewed the top 50 people on both sides to understand their mindset. Surprisingly, Inoticed that hostility (from the takeover battle) was concentrated among a few people. Itwas not really down the line. I interviewed the senior managers on both sides, and Irecommended this organization. I had ideas coming in from all of the people, but finally Idecided.

On his first plant in Indonesia:

My father bought some land there (to build a steel mill) but decided to abandon that projectand wanted me to sell that land. I was going on vacation with friends and I dropped byIndonesia (in 1976) to finalize the sale of the land. At the time, I was very new; I wanted toknow why my father wanted to sell the land. I said, "Let's spend a couple of daysunderstanding the issues." When I found I could resolve the issues, I said I want to stay inIndonesia and build this project. So I picked it up and built it. It started with a rolling mill in1977, and then we put in a Japanese electric arc furnace. At the time Indonesia wasgrowing very well. There were a lot of oil dollars. By the time I left in 1985, we had thelargest steel company in the private sector.

On his knowledge of steel mills:

I can still manage the control panel. I built a steel plant from the grassroots, so I learned allthe nuts and bolts. When there was a problem, I would be able to guide them, though I amnot a technical person.

On how he branched out:

I worked in this company for almost 13 years. In 1987 or 1988 I met [a German steelexpert] who was managing director of a company in Hamburg that had the most advancedmini-mill in Europe. I met him at a conference where I was making a presentation on mini-mills. We got together and I asked him to travel with me to Indonesia, and we becamefriends. His company had a management agreement with a company in Trinidad anddecided not to continue with that contract, so he asked me if I would like to work with thatcompany in Trinidad. We went there and we found that we could take over. Our contractwas a lease agreement with an option to purchase after five years. This was the firstinternational experience for me. Success in Trinidad gave me a lot of confidence.

On why he could make a success of mills where others failed:

We always looked at it fresh. We never looked at the traditions of these companies. Wealways looked at things out of the box, We did not carry any baggage. We had not beenworking at these companies for 20 or 30 years. We would ask what is wrong, how can wemake changes? I like to find a solution, move on, look to the future.

On his son Aditya:

I am happy people like him and that he is well accepted. People clearly see the role hebrings with ideas. I don't think that he is young. He has 10 years of official experience and alot of unofficial experience. He understands the subjects well, and he is very thoughtful.


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LATEST KEY DEVELOPMENTS OF ARCELOR MITTAL.

ArcelorMittal Signs Agreement To Develop Iron Ore Mining InSenegal

Friday, 23 Feb 2007ArcelorMittal announced that it has signed various agreements with the State of Senegal in West Africato develop iron ore mining in the Faleme region of South East Senegal. The project is expected toentail an investment of approximately $ 2.2 billion. The total estimated reserves are approximately750m tonnes, located in four locations in the Faleme region and comprising both haemetite andmagnetite deposits. The project is an integrated mining project and will encompass the development ofthe mine, the building of a new port near Dakar and the development of approximately 750 km of railinfrastructure to link the mine with the port. The mine is expected to commence production in 2011.The Company will also consider selective investments in the downstream steel facilities. Theagreements will become effective upon fulfillment of certain conditions precedent by the State ofSenegal.

ArcelorMittal Issues FY 2007 Q1 EBITDA Guidance; AboveAnalysts' Estimates

Wednesday, 21 Feb 2007ArcelorMittal announced that it expects to report first quarter 2007 EBITDA to be between USD 4.0-4.2billion. According to Reuters Estimates, analysts are expecting the Company to report an EBITDA forthe first quarter of the fiscal year 2007 of USD 3.6 billion.

Justice Department Requires ArcelorMittal To Divest US Mill-ReutersTuesday, 20 Feb 2007

Reuters reported that U.S. antitrust authorities would require ArcelorMittal to sell a facility in SparrowsPoint near Baltimore, Maryland, to address competition concerns arising from Mittal's acquisition ofrival steelmaker Arcelor. The Justice Department also announced that the sale of the Sparrows Pointmill would remedy concerns about competition that arose from the deal that combined the twocompanies to create ArcelorMittal.

ArcelorMittal Enters Joint Venture With Bin Jarallah Group-BettenBeursmedia NewsThursday, 15 Feb 2007

Betten Beursmedia News reported that ArcelorMittal has signed a joint venture agreement with the BinJarallah Group of companies for the design and construction of a seamless tube mill in Saudi Arabia.This facility will be located in Jubail Industrial City, north of Al Jubail on the Persian Gulf. The mill willhave a capacity of 500,000 tons per year. About two thirds of its capacity will be used for tubes used inthe oil industry and the remainder for line pipe, in sizes ranging from 4 inches to 14 inches. Semi-products for the mill will be sourced from ArcelorMittal steel plants. Construction is planned tocommence at the end of the first quarter of 2008 and to be completed by the last quarter of 2009. Onceit is up and running, the mill is expected to employ 420 people. The agreement with the Bin JarallahGroup was signed on February 14, 2007. ArcelorMittal will hold a 51% share in the companyestablished for this project, with the Bin Jarallah Group holding the remaining 49%. ArcelorMittal willhave management and operation rights.

ArcelorMittal To Build Tubes Plant In Saudi Arabia-ReutersThursday, 15 Feb 2007

Reuters reported that ArcelorMittal announced had signed a joint venture agreement to build aseamless tube mill in Saudi Arabia. It said the mill, which it will build together with the Bin JarallahGroup, would have a capacity of 500,000 tons per year and that it expected construction to becompleted by the last quarter of 2009. The Company will have 51% of the joint venture and BinJarallah the rest. Semi-products for the mill would be sourced from the Company, which would havemanagement and operation rights.


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CVM Refuses Bid By ArcelorMittal On Outstanding Shares InArcelor Brazil-Betten Beursmedia NewsTuesday, 13 Feb 2007

Betten Beursmedia News reported that CVM (Comissao de Valores Mobiliarios) has not supported thebid brought by ArcelorMittal on the outstanding shares, which ArcelorMittal does not own, in ArcelorBrazil. ArcelorMittal has been in talks with CVM since the summer of last year and has brought a public

bid of EUR 9.070 billion against the remaining 44% of the Arcelor Brazil.

ArcelorMittal Pays Out Interim DividendFriday, 2 Feb 2007

ArcelorMittal announced that the Board of Directors of ArcelorMittal has declared an interim dividend ofUSD 0.325 per share. The cash dividend will be payable on 15 March 2007 to Euronext Amsterdam,Euronext Brussels, Euronext Paris, Luxembourg Stock Exchange and Spanish Exchangesshareholders of record on February 27, 2007, and to NYSE shareholders of record on March 2, 2007.The share will be traded ex-dividend starting 28 February 2007. European Shareholders will receiveUSD 0.325 per share in Euros, based on the ECB exchange rate of February 26, 2007, NYSEshareholders will receive USD 0.325 per share, both payable from 15 March 2007 onwards.

ArcelorMittal Name To Be Used For Stock Market QuotationTuesday, 30 Jan 2007

Mittal Steel N.V. and Arcelor S.A. announced their intention to use their trading name ArcelorMittal onits different stock exchange listings in order to better reflect the economic reality of the group.ArcelorMittal will replace Mittal Steel currently used for the legal entity Mittal Steel Company N.V. Thecurrent ticker codes will, however, remain unchanged.

Mittal Steel Company N.V. Announces Name ChangeMonday, 29 Jan 2007

Mittal Steel Company N.V. announced that it has changed its name to ArcelorMittal.

Rotterdam Court Denies ThyssenKrupps Petition for an OrderDirecting Mittal Steel Company N.V. to Cause Arcelor S.A. to SueStichtingWednesday, 24 Jan 2007

Mittal Steel Company N.V. announced that the President of the Rotterdam District Court has deniedThyssenKrupp AGs petition for an order directing Mittal Steel Company N.V. to cause Arcelor S.A. toinitiate legal proceedings against the independent Dutch foundation Strategic Steel Stichting, with aview to forcing the foundation to dissolve. The foundation currently owns 89% of Dofasco Inc., theNorth American steel producer. Among other reasons for its decision, the Court stated that Mittal SteelCompany N.V. cannot be expected to do more than it has already done in order to seek dissolution ofthe foundation.


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Organization Mittal Steel is a holding company based in Rotterdam,

Netherlands, with no business operations of its own. Instead, operations arecarried out through subsidiaries that are wholly or majority owned by Mittal.

ArcelorMittal Announces Change in Its Human

Resources Leadership.

LUXEMBOURG & ROTTERDAM, Netherlands -- ArcelorMittal today announces that MrInder Walia, Executive Vice President of Human Resources, is leaving the Company at the

end of June 2007. He will be replaced by Mr Bernard Fontana.

Inder Walia has been with the Group for 8 years. Prior to


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the merger of ArcelorMittal, he held the position of Corporate Director of Human Resources

at Mittal Steel Company N.V. since 1999. He was also the Secretary to the Appointments &

Remuneration Committee of the Board since 2002.

Mr Walia led the Group Human Resources function through a period of substantial growth

for the company, managing all aspects of HR including due diligence and post acquisition

integration work in many countries across diverse cultures. He also introduced the

successful deployment of various people policies, including the talent management process

now embedded and central to the Company's performance management culture.

Inder Walia said: "The past 8 years have been the most exciting period of my professional

life, with each day bringing new challenges and learning on a global basis. ArcelorMittal is a

fast growing and dynamic company and HR was always involved in the integration of new

acquisitions - of which there have been many during my eight years with the company! This

combination of integration work combined with more traditional human resources

responsibilities created a unique opportunity which I have thoroughly enjoyed."

Lakshmi Mittal, President & CEO said: "I have greatly enjoyed working with Inder as an

important contributor to the business. He is a thorough professional who successfully

integrates across diverse cultures. I thank Inder for his tremendous sense of belonging to

the Group and wish him every success in his new endeavour. I also take this opportunity to

welcome Bernard to his new role in Group Human Resources''.

Bernard Fontana, who takes over the responsibility as Executive Vice President of Human

Resources, joined Arcelor as Senior Vice President of Human Resources, Flat Products

Europe in 2004. A graduate of Ecole Polytechnique, one of France's leading engineering

schools, he was hired by French chemical group SNPE in 1986, where he managed

various production sites and business units as well as its North American branch,

eventually becoming deputy CEO. With the merger of ArcelorMittal in 2006, he was

appointed as Executive Vice President of Global Automotive business, which he

successfully led.

Mr Fontana said: "I am very much looking forward to taking up the position of Executive

Vice President, Human Resources. Human Resources is an important function in any

company, but when you are talking about a business comprising 320,000 employees. it

becomes a critical component of the success of that business. This is particularly true in the

period following a large-scale merger, such as that between Arcelor and Mittal Steel. There


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are many challenges ahead as we seek to continue to build on our leading market position.

I am confident that we will continue to develop on the excellent work carried out by Inder

and his team since the merger, to ensure that ArcelorMittal continues to operate a human

resources department worthy of its position as one of the world's leading businesses

today."

Management Science-II

Dr. Sangamithra

Indian Institute of Technology Madras

MODULE 6

Planned Change Introduction To Od


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Organization Development (Od)

A long-term effort, led and supported by top management, to improve an

organization's visioning, empowerment, learning, and problem-solving processes,

through an ongoing, collaborative management of organizations culture with

special emphasis on the culture of intact work teams and other team configurations

utilizing the consultant facilitator role and the theory and technology of applied

behavioral science, including action research.

Primary Distinguishing Characteristics Of OD

Focuses on culture and processes

Encourages collaboration between organizational leaders and members in

managing culture and processes

Teams of all kinds are particularly important for task accomplishments

Focuses primarily on the human and social side of the organization.

Primary Distinguishing Characteristics Of OD

Participation and involvement in problem solving and decision making by

all levels of organization

Focus on systemic change; views organizations as complex social systems


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OD practitioners are facilitators, collaborators, and co-learners with the

client system - focus on imparting of problem-solving skills and knowledge

of continuous learning through self-analytical methods to client to enable

it to solve its problems on its own.

Reliance on action research model with extensive participation by client

system members

Development view seeking betterment of both individuals and organization.


Dr. Sangamithra


Assumptions And Values Underlying OD


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Dealing with individuals

Most individuals want to develop their potential and have drives towards

personal growth and development if provided with supportive and

challenging environment Most people desire to make, and are capable of

making, a higher level of contribution to achieving organizational goals than

is normally permitted.

Implication for managers

Ask, listen, support, challenge, encourage risk-taking, permit failure,

remove obstacles and barriers, give autonomy and responsibility,

set high standards, reward success.

Assumptions And Values Underlying OD (Contd.)

Dealing with groups

One of the most relevant reference group for individuals is the work

group, including peers and boss.

Most people desire to be accepted, and interact with one or more

small reference groups.

Most people are capable of making greater contributions to the


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groups effectiveness and development


Dr. Sangamithra


Implication for managers

let teams flourish; leaders should invest in groups/teams; adopt a team-


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leadership style rather than a one-on-one style; actively engage group

members to help leader in decision-making and problem-solving, by

training them up suitably; help group members to deal with both positive

and negative feelings; solve problems through mutual interactions.

Designing and running an organization

Traditional bureaucratic organization structures to give way to newer

organizational designs.

Needs and aspirations of employees to be addressed.

Putting people first can result in organizations that are humane,

developmental and empowering, as well as high performing in terms of

productivity, profitability and quality of output.

Implication

People are an organizations most important resource; they are the source of

productivity and profits and should be treated with care.

OD Interventions

Intervention


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refers to a set of planned change activities intended to help

an organization to increase its effectiveness.

Based on valid information (accurate organizational diagnosis)


Dr. Sangamithra


Opportunity for free and informed choice (employees active

involvement)


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Gain members internal commitment (employees accept

ownership of the intervention and its implementation)

Human Process interventions

T-groups

Provides members with experiential learning about group

dynamics, leadership, interpersonal relations

Process consultation / third party interventions

Consultant helps group members to diagnose group functioning

and to devise solutions to process problems (conflicts,

communications, norms)

Team building

Goes beyond process consultation, examines group's task,

member roles, strategies for performing tasks.

Search conference

Clarifying important important values, looking for new ways

to address problems, articulating a new vision for the organization.

Organization confrontation meeting

Mobilizing employees in problem solving during periods of stress.

Normative approaches

Specifies best way to manage an organization, through use of

standardized instruments for measuring organizational practices.


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Dr. Sangamithra


Techno-Structural Interventions

Formal structures

Concerns organizations division of labour how to specialize

task performances.

Four kinds of structures:

Functional, self-contained units, matrix, and networked

Differentiation and Integration


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Specialization and coordination mechanisms redesigned as

per environmental demands

Techno-structural interventions

Parallel learning structures

Creating an informal, flexible collateral organization to

supplement existing organization, to solve problems that a

regular organization cannot solve.

Human Resource Management Interventions

Goal setting

Setting clear and challenging goals, improving organizational

effectiveness by establishing better fit between personal and

organizational objectives.

Performance appraisal

Joint assessment of work-related achievements, strengths and

weaknesses; providing performance feedback to individuals and

work groups


Dr. Sangamithra


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Reward systems

Designing incentive and reward system for improving

employee satisfaction and performance

Career planning and development

Guiding employees to choose career paths and to attain career

objectives; means of improving employees quality of work life.

Managing workforce diversity

Change in gender ratio, ethnic ratio, physically challenged

employees; flexibility in policies to accommodate these changes


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Employee wellness

Employee assistance programs, stress management, etc.

Parallel Learning Structures

Creating an informal, flexible collateral organization to

supplement existing organization, to solve problems that a

regular organization cannot solve.

Person-Focused OD Interventions

Partnerships between individuals (participants) and behavioral

science experts (facilitators)


Dr. Sangamithra


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Participant-active

Interventions

Facilitator-active

Interventions

Encounter groups Psychodynamic models

Role playing Motivation arousal

Instrumentation Training

Self-study and Reflection Feedback

Awareness Expansion Coaching and Mentoring

Encounter Groups (EG)

Sensitivity training, laboratory training, T-groups,

L-groups (changing individual attitudes and values)


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Purpose

Role Playing

Techniques / processes

Usefulness:

Perception of others feelings

Autonomy

Leadership and group work

Self-assessment

Internalization of learning

Interpersonal orientation


Dr. Sangamithra


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Role Playing

Techniques / processes

Usefulness:

Perception of others feelings

Autonomy

Leadership and group work

Self-assessment

Internalization of learning

Interpersonal orientation

Instrumentation

SAFI

Completion of instrument, conceptual input, prediction,

scoring, interpretation, feedback, action planning,

experimentation, follow-up


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Dr. Sangamithra


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Using HRD Instruments

Disadvantages Advantages

Engenders fear of exposure Enables early, easy learning of

theory

Encourages labeling Promotes personal involvement

and commitment

Fosters dependence on the

facilitator

Supplies personal feedback

sooner than other participants

are able to

Makes the facilitator an expert Facilitates contracting for new

behavior

Can result in threatening

situation

Fosters open reception of

feedback through low threat.

Triggers anger and anxiety Surfaces latent issues

Makes distortion of feedback

possible through manipulation of


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scores

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