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Full Project – MPACT OF CHANGE MANAGEMENT ON ORGANISATIONAL PERFORMANCE IN THE BANKING SECTOR IN LAGOS, NIGERIA

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CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

Organizational change generally means rightsizing, new development and change in technologies, rescheduling operations and major partnerships (McNamara, 2011). Organizational change includes Mission changes, Strategic changes, Operational changes (including structural change),technological changes, Changing the attitudes and behaviors of personnel, Countering resistance from different employees of companies and aligning them to strategic directions of the organization. The Society for Human Resources Management (2015) defines change management as the systematic approach and application of knowledge, tools and resources to deal with change. Change management means defining and adopting corporate strategies, structures, procedures and technologies to deal with changes in external conditions and the business environment.

Korir, Mukotive, Loice and Kimeli (2012) define change management as the effective management of a business change such that executive leaders, managers and frontline employers work in concert to successfully implement the needed process, technology or organizational changes. Moran and Brighton (2011) define change management as the process of continually renewing an organization‟s direction, structure and capabilities to serve the ever changing needs of external and internal customers. Burnes (2004) like many other scholars assert that change is an ever present feature of organizational life, both at the operational and strategic levels. Due to its importance, change management is becoming imperative, and needs appropriate managerial skills and strategy.

Change is an integral part of what is needed to bring about this desired result, hence it has become imperative to embrace innovation, change in technologies, equipment and transformation as a driving force and aimed at uplifting organizations higher economically. This study focuses on the change management and its effects on employees performance in Nigeria banking sector. be it private or public. It intended to probe such organizations with a view to determining the change management and its effect of on the employees performance evaluation of departments and individual workers, profitability index comparatively, working relationship amongst workers just to mention but a few. It is a general philosophy that change is a constant phenomenon that is bound to occur in every given environment and business setting. Though it has both positive and negative reactions and effects, it still proffers solution to some identified problems at the end of the day. Therefore change can be described as a means to plan, initiate, realize and control and finally stabilize change processes in both corporate and personal levels. It also covers diverse problems like strategic direction or personal development programmes for staff among others (Oliver Reckiles 2001).

It should also be carried out in a logical and systematic process that will leave no employee emotionally aggrieved. Often times, introduction of change cost a substantial amount in terms of managerial time and emotional upheaval.(kanigel,Robert.1997:45). Many organizations have not tried change or initiate changes to most of their activities either because the managers were afraid that they were simply incapable of successfully implementing the needed change or because of its effect on the management of the employees in the organization.(Head, Simon 2005:22)

In the economic area we also see unprecedented instability in world currencies, massive defaults and (euphemistically called) rescheduling of major national debts of third world countries. The International monetary fund (IMF) no longer seems able to stabilize events and even the major currencies no longer seem to follow the well-established rules.( (Montgomery, David 1989 :1865) Sequel to all these, is the enormous pace of technological inventions and innovations. This is creating major opportunities which were obviously inconceivable, but at the same time it is creating massive employment and forcing major realignment of job skills and talent.

Roger Plant (2012: 115) in his work title “Managing Change and making it tick” observed that there is a wide range of typical causes of resistance. These are rarely simply cause and effect situations, and resistances is usually a complex mix of historic, factual and emotional issues, which are not always easy to disentangle. He listed the following as some of those most frequent sources of resistance to change and unwillingness to engage in new behaviour. Kotler [1996] describe a helpful model for understanding and managing change. Each stage acknowledges a key principle identified as relating to people response and approach to change in which people see, feel and then change.

Basically, this study is aimed at change management and identifying the major effects on employee performance in an organization. This change could be in form of a new policy direction, or a shakeup in the top management of the organization. In Nigeria, introduction of change either political or business related has tremendous effect on the employees of various organizations.(Epstein, marc, 1996: 579).

Change management is an important process, because it can deliver vast benefits (by improving the system and thereby satisfying “customer needs”), but also enormous problems (by ruining the system and/or mixing up the change administration). Furthermore, at least for the Information Technology domain, more funds and work are put into system maintenance (which involves change management) than to the initial creation of a system. The research work intends to take a critical look at the impact of change management on organisational performance in banking sector in Lagos, Nigeria.

The field of banking is nowadays also confronted with many changes due to increasing and worldwide competition, technological advances and demanding customers. Therefore, (efficient and effective) change management is also of great importance in this area.

1.2 STATEMENT OF THE PROBLEM

Change is an inevitable phenomenon in the business world. There have been various forms of innovations with respect to policies and procedures of work activities, products with competitive edge over other products and services in the same industry, and the global growth in technology and information super high way. This in no doubt has impacted upon the activities of public and private enterprises whether profit oriented or non-profit driven organizations in Nigeria and beyond.

Nevertheless, a good number of firms have not swiftly adapted to change or monitor the business environment and make proactive measures to remain afloat in their respective industries. This situation has culminated in the loss of relevance of firms in their industries. As a firm begins to experience downturn, it will eventually impact negatively on the overall productivity and efficiency of the firm. This could lead to loss of customers and the firm not being able to meet operating cost. Organizations in this situation are compelled to downsize (lay off workers). Employees in such organizations are faced with the unfortunate reality of losing their jobs and the attendant social cost of joblessness. Why employees resist change and its change on organizational development, and how to carry out successful change in organization without necessary encountering violence will be concern of this study.

1.3 OBJECTIVES OF THE STUDY.

The main objective of the study is to evaluate the impact of change management on organisational performance in banking sector in Lagos, Nigeria

. However, the specific objectives are as follows:

To ascertain the challenges encountered by organizations in the process of change management.
To determine the benefit of change management to both employees and employers.
To ascertain the effect of change management on organizational growth.
To evaluate the effect of change management on employee productivity.

1.4 RESEARCH QUESTIONS

What challenges do organizations encounter in the process of change management?
What are the benefits of change management to the employees and the employers?
To what extent is the effect of change management on organizational growth?
Does change management have effect on the employees’ productivity?

1.5 RESEARCH HYPOTHESES

In this study, four hypotheses are formulated in line with objectives of the study and the research questions.

H_o: Change has significant effect on organizational growth.

There are significant challenges encountered by organization in the process of change management

H_I: change does not have significant effect on organizational growth.

H_O: Organizations do not have enormous challenges in the process of change management.

Change management has significant benefit to employees and employers

HI: Organizations have enormous challenges in the process of change management.

H_O: Benefits of change does not accrue to both employees and employers.

H_I: Modern production technique has significant change on organizational growth.

H_O: Change does not have significant effect on employee’s productivity policy change has significant effect in employees’ performance

H_I: Change does have significant effect on employee’s productivity.

1.6 SIGNIFICANCE OF THE STUDY

The significance of the study cannot be overemphasized and it can be viewed from the various perspectives below;

The research work will help entrepreneurs and policy makers of industries and governmental agencies to understand the huge implications of not been change advocates. It will point out the available strategies in the introduction of change that will keep the organization chaos free and remain productive.

The banking sector will mostly benefit from the various reasons behind the need for successful change administration.

The study is also significant on the ground that it will benefit students, academia and future researchers because it will clarify and analyze the theoretical framework of change, resistance to change by employees and the most positive ways of managing change vis-à-vis employees and improved organizational productivity.

Therefore the research work will be a contribution to the existing body of knowledge.

1.7 SCOPE OF THE STUDY

The scope of this research work is strictly to study the impact of change management on organisational performance in the banking sector in Lagos, Nigeria. The study is restricted to two selected banks in Lagos, Nigeria. It is agreed that change do normally occur in an organization and its attendant effect on employee management is glaring.

The techniques they employ in introducing change and in controlling and managing organization reaction is what this project intends to research on, and where possible proffer solutions and suggest recommendations to these organizations.

1.8 LIMITATIONS OF THE STUDY

The ‘subject no doubt a very wide area, so much research works have been carried out on it, yet it is still green, green in the sense that most organizations have not certainly come to terms with the need for effecting change as at ‘when due in the organization and how to properly manage the employees in the face of a change been introduced.

1.8.1 Time: Time is a major constraint to the researcher conducting an elaborate and detailed study.

1.8.2 Financial: Financial limitations is another major setback which restricted the researcher to studying only a few selected private organizations.

1.9 DEFINITION OF TERMS

Change Management: Change management is a systematic approach to dealing with the transition or transformation of an organization’s goals, processes or technologies. The purpose of change management is to implement strategies for effecting change, controlling change and helping people to adapt to change.

Organisational Performance: Organizational performance comprises the actual output or results of an organization as measured against its intended outputs. According to Richard et al. organizational performance encompasses three specific areas of firm outcomes: financial performance; product market performance; and shareholder return.

Organization: An organization, or organisation, is an entity – such as a company, an institution, or an association – comprising one or more people and having a particular purpose. The word is derived from the Greek word organon, which means tool or instrument, musical instrument, and organ.

Bank: A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. There are several different kinds of banks including retail banks, commercial or corporate banks, and investment banks.

Employees: An employee is a worker who gets paid an hourly wage or annual salary for a set job. Not all hourly workers are employees.

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