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Habib Bank Limited (HBL) is the most recently privatized amongst the local big banks in Pakistan. HBL is the leading private bank in Pakistan with over 1400 branches and international outreach of more than 30 branches across the Globe.
HBL was privatized in 2004 and since then has emerged head on with the competition because of its aggressive and effective customer oriented strategies, especially re-branding and revitalization of branches. HBL has a workforce of around 15000 employees, most of which had been part of the pre-privatization phase.
Being recently privatized, it is facing the problems of pre-privatization bureaucratic culture. However despite the fact mentioned above, HBL has been seen as emerging out in the competition with aggressive and effective customer oriented strategies even though a majority of its work force is used to dealing with conventional bureaucratic management styles and a change resisting attitude.
The banking industry in Pakistan has progressed at a fast pace in the recent years where multinational banks have provided the impetus for economic growth and change. Thus in order to keep up with the new trends it became necessary for the local banks to develop new strategies in order to keep abreast with the evolution of the banking industry. The researcher is attempting to explore how HBL has implemented its change management program after it was privatized in 2004.
HBL has emerged as a bank that revitalized itself to keep up with the changing trends. However this change was not implemented overnight and through this research, the researcher seeks to understand the challenges that the management faced while implementing and managing the change program and what sort of resistance did the middle level management employees put up to counter the new process through following research questions:
What were the HBL employees' perceptions regarding the organizational change taking place after privatization?
What were the factors that lead to resistance to change from employees? How did HBL's change agents overcome those factors?
What was the way by which new organizational change program was implemented by HBL's management so that the employees having a bureaucratic organizational orientation are now performing their jobs in an entirely new culture?
Have these changes been productive?
The above were the major questions relevant to the problem statement which came in the mind of researcher and were addressed.
To analyze the process of change adopted at HBL from the perspective of those middle level management employees employed at the branches, seeking to identify strengths and weaknesses in the process
To find out what types of resistances were faced by HBL's management during the change management process
To find out how HBL's management responded to employees' resistance and the effectiveness of these applied strategies
To evaluate the validity of existing change management models and to find out the type of organizational change implemented (rational-empirical, normative - reeducative or power - coercive)
Scope of the Study
The scope of this research was limited to HBL, which covers only post privatization era. The research studied that how resistance to change of middle level management level employees working at the branches is being managed at HBL in post-privatized environment so that they are performing their jobs in more effective manner after privatization.
The research, being a case study, was qualitative in nature.
Since the research was exploratory in nature the researchers chose a case study methodology. Moreover, out of literature reviewed by the researcher, many of the research papers and articles emphasized on qualitative case study pattern and researcher was of the view that case studies provide a detailed study of the various frameworks and theories.
Level of education
Rank in organization
The respondents were employees belonging to the Middle Level Management of HBL. From this level of hierarchy the employees from branches were chosen, as the major change management process was implemented in the branches of HBL primarily. 30 out of 157 branches of HBL in Karachi were chosen on convenience basis. The branches selected were those, which were in existence before HBL was privatized.
Approximately 2000 middle level management employees work in HBL at Karachi, out of which the research sample size consisted of approximately 150 employees, who work in branches and have been with HBL before privatization.
Apart from branch level employees, structured interviews were also conducted from business heads (or their nominated personnel) of 3 departments namely Human Resources/ Organization Development, Branch Banking and Service Quality as these departments were directly in interaction with the employees and played an important role in managing and implementing the change process. The number of business heads that were interviewed was 8 individuals.
Sources of Primary Data
Interviews of Top Level Management: The first method of data collection was the interviews of top level management of HBL which were conducted by the researcher in order to understand how the resistance to change was managed while implementing the change management program at HBL. Questions were put forward to the top management from the departments of Human Resource, Organization Development, Branch Banking and Service Quality as these departments are directly in interaction with employees and have a considerable role in managing and implementing the change process. For this purpose Senior Managers and Heads of Departments were interviewed and a total of 8 senior management personnel were interviewed.
Questionnaire: After conducting an experimental test survey, the formal questionnaire survey to be administered to the branch banking employees of HBL was carried out. The questionnaires were developed keeping in mind the variables identified during the interviews with the top management and also the common variables that were found out during the course of the research of various literature on change management. The questionnaire questions were kept to the point and easy to understand so that the participants could easily fill the questionnaire.
Sources of Secondary Data
Journals: The sources of secondary data included research journals such as JSTOR, Journal of Change Management, Harvard Business Review, Journal of Human Resources, Human Resource Development Quarterly, Willey Blackwell, SZABIST - JISR. To date, major business and commerce journals and some social sciences journals have published special editions on this topic. The focus of the journals varied, from technical aspects of a privatization deal to managerial topics, and exemplified the complex nature of the change management and privatization process. Apart from these journals several other sources available over the internet and HEC digital library were also referred to.
Close-ended questionnaires were the tool used to get required information from employees working in the branches. The respondents were asked to either tick a particular option from the given list options or Likert scale.
Structured interviews were conducted of personnel belonging to upper level of management. The researcher opted for structured format of interviews because responses of such interviews were precise and clear in order for the researcher to grasp an understanding of the subject at hand.
Expected Thesis Outcomes
Employees' major concerns while management change was taking place and their reasons
Types of resistance faced by the management (such as union strikes, employee turnover, complaints, etc.) and strategies to manage them
Tools and techniques used by the management to communicate the change (if any)
Changes in the organization's environment (Culture change, attitude change, leadership change) due to administrative change
Technology clash (if any) that has come about due to the change management process
Impact on the motivational level of employees after or during the implementation of change program
Limitations of the Study
It was a new area of research which was not yet completely tapped in Pakistan so it was not particularly easy to get the required information (especially from secondary data).
As the researcher had difficulty in gathering data on a country-wide basis from HBL branches, the data was gathered from only the city of Karachi and from branches of HBL only
Limited availability of time on part of the respondents and researcher
Organization of Study
The second section of the thesis includes an in-depth understanding of the concepts of change management, its impact on the organization and the individuals, why individuals resist change and how the employees need to be involved in the change management process in order to implement a successful change management program in any organization. Various cases most matching the requirements and objectives of the researcher's subject matter were analyzed by the researcher in order to gain an insight into the concept of change management and resistance. The common factors among the various cases were highlighted so as to provide support to the data gathered by the researcher.
The third section is based on the information that the researcher gathered through the interviews of the senior executives of HBL. This section gives a detailed insight into the history of HBL, how and why the need was felt to privatized HBL, details of the implementation of this process and its outcomes. The researcher's objective was to clearly convey the reasons and the causes of the decision taken by the management of HBL. The fourth section includes the findings and analysis of the employee questionnaire. Each question was analyzed by the researcher so as to clearly explain the researcher's objective in asking that question and to what extent did the results support the literature the researcher had reviewed.
The fifth section comprises of the conclusion and recommendations provided by the researcher based on information acquired through the top level management interviews and through the analysis of the employee questionnaire. The researcher's aim was to provide objective and unbiased recommendations which in turn could be used both by the management of HBL and for the purposes of further research.
Literature Review & Theoretical Framework
The Global Economy and Organizational Change
In today's rapidly changing global economy, organizational change is a necessary element to follow up with the altering economic, technological and social discoveries. No organization can now function in isolation; rather every organization is affected by the external forces and global trends that are dominating the business world today. Altering constantly has become regular practice of organizational dynamics, employees not willing to accept change can inadvertently, in their ignorance, cripple the organization.
Resistance to change is said to be an inevitable response to any sort of change. Employees feel that their status quo is being threatened and lack of security compels them to resist change; even if the change is for their betterment. Folger & Skarlicki (1999) assert that "any organizational change could cause disbeliefs, and rebellion amongst groups in that organization, hence often leading to problems and conflicts in applying desired new policies".
To bring about any change, the management has to work with employees to help them accept change and address their misapprehensions effectively. Coetsee (1999, p.205) states "management's are able to take maximum advantage of the new policies and procedures as long as they are capable of providing an environment that is friendly towards these changes, and promotes agreeable attitudes and support".
Change has been defined in different ways by many different representatives. A most basic definition of change is that it is a phenomenon of time. Huber et al (1993, p. 216) defines change in reference to organizations as, "organization's operations, hierarchy and its responsibilities and job descriptions, how does it grow with time, or how it applies it budgetary controls". From an organizational development purpose, researchers have defined change as the behavior science theories, systems and values whose purpose is to enhance individual development and the organizational work environment in order to have a well balanced and productive work cycle by altering the employees' work behaviors.
The Need for Organizational Change Management
To constantly evolve and uplift an organization's approach, framework, cope up with changing environment and cater to the varying needs of customers has been defined as change management (Moran & Brightman, 2001, p. 111). Burnes (2004) states that change is the most prevalent characteristic of an organizational life, both at strategic and operational level both. Hence, the importance of change to any organization is not avoidable as it helps the organization to understand future needs and the measures required to get where it wants to be. As a result, changes in organization cannot be separated from its action plan or vice versa (Burnes, 2004; Rieley & Clarkson, 2001). As the importance of change in organization is growing, its administration is now a days becoming a highly required decision-making skill (Senior, 2002). Graetz (2000, p. 550) suggests that 'Against a background of growing globalization, lesser regulations, the increasing number of technological breakthroughs, growing pool of sophisticated and knowledgeable human resource, and uneven socio-economic trends, some might contradict that the main task of managhement today is the leadership of change in organization.
As the requirement for change cannot be predicted resultantly change tends to be hasty, irregular and mostly initiated by a condition of organizational disaster. (Burnes, 2004; De Wit &Meyer, 2005; Luecke, 2003; Nelson, 2003). However, the proper management of change a necessity to compete in today's dynamic environment (Luecke, 2003; Okumus & Hemmington, 1998), Balogun and Hope Hailey (2004) mention that the rate of failure of change programmers commenced has been 70% and this disappointing success rate may be attributed to the inadequacy of strong structure which guides for implementation and management of change and what is presently available to the implementers and academics is a pool of mystifying suppositions and ways the change phenomenon is dealt with (Burnes, 2004).
Guimaraes & Armstrong (1998) assert that widely opinionated analyses have been printed in the field of change management, and as per Doyle (2002) there is an indication of uncontested suppositions in theories and practices regarding character of modern organizational change management. Edmonstone (1995, p.16) reiterate this fact while reporting that 'various change processes within last 25 years have been subject to basic flaws, thwarting the triumphant change management.
Although, it is hard to recognize any agreement concerning structure for organizational change management, but there are two points agreed upon unanimously. (1) The speed of change has never been higher than in the present business environment (Balogun & Hope Hailey et al., 2004). (2) Change may be initiated by internal or external factors both (Balogun & Hope Hailey et al., 2004).
At the same time, there is common literature stressing on the significance of change and recommending ways to implement it (Guimaraes & Armstrong, 1998).
There exists strong contradiction about one fine way of dealing with the process of change management (David & Stephen, 2005). This disagreement stems from various practitioners from the field of change management who have reservations and also confusion when to comes to which approach should be used.
Change in organization involves movement from one step to another or it can also be said that deforming the older framework forming a newer one (Chonko 2004). The source of change can be technology, communication, common insecurity, acquisition or unification, reengineering organizational growth or by institutional and market instability. However, focused concentration is required to manage the condition as it has varying effects of employees.
Desplaces (2005) advocates that some environmental/workplace and individual factors may result in positive attitudes and behavior towards change which are basically connected with societal, individual, working set up, cultural and organizational services.
Employee Behavior Analysis and Change
Many researches have been carried out in the field of change management since last many years and they indicate personal and organizational factors for employees' willingness to change. Miller et al., (2006) focused and identified managerial/leadership associations, job awareness and ability, and job demands for this purpose. Rafferty & Simons (2006) focused on self-efficacy, faith in colleagues, and logistic and structural support. Recent study conducted by Holt et al., (2007), focused on employees' attitudes of self efficacy, aptness and upper management reliance. Such variables have favorable impact on employees' willingness to adopt change.
Conversely to comprehend the word 'change' it is also critical to define the term 'resistance' so that better understanding of the concept of resistance can be sought. Folger & Skarlicki (1999, p.36) described resistance as "peoples response that it denies and challenge, interfere, or overturn widespread assumptions, discourses, and authority affairs". Other researchers have defined resistance as constantly behaving in a certain manner that maintains the status quo when this status quo is challenged to be changed.
Authors (Lawrence, 1954; Maurer, 1996; among others) assert that causes for the unsuccessful change proposals can be seen in confrontation to change itself. Conflict to change is a key factor of adding up expenses and delaying the change process that can not be predicted but must be aware of (Ansoff, 1990).
As per Dent & Goldberg (1999), "employees aren't really against the change, but rather they are too much concerned, worried for the loss job's perks and benefits which are part of it". Employees feel threatened as soon as any new change is announced as they feel that their job security is threatened. Atkinson (2005) states that the first question that people ask as soon as they hear of any change management process is "How is this (change) going to affect me?" Change is always a force that is looked upon with suspicion and it is up to the management to keep an open process of communication with their employees when change management is being undertaken.
The Responsibility of Central Tier of Management in Facilitating Change
Though the transition to change in an organization is considered to be a necessity to have the organization thriving, but it is also crucial to comprehend from which level of management the most resistance to change is coming from. Studies propose that supervisors at all levels have a vital part in bringing about a successful change process in an organization (Floyd & Lane, 2000; Ireland, Hitt, & Vaidyanath, 2002). In a summarized form the top-level managers are responsible for making strategic decisions such as goal setting, action plan development etc; while the middle level management are responsible for assuring that assigned targets are successfully achieved, and are also responsible for effectively communicating information from the top-level management to operating level management.
Ghoshal & Bartlett (1994 in Duane 2005) also support this view and "recognizes middle-level managers as a bridge between employee's commercial activities to form new interests or engage in new fronts." This statement again reiterates that no change process is possible without the involvement and cooperation of middle level management. If resistance comes from this quarter then the top level management cannot effectively implement the new changes as the basic function of this level of management is to communicate and implement the strategies developed by the top management.
According to Duane (2005) that middle level mangers resist change for two reasons; firstly because they feel unwilling to quit the current mode of working whereby they feel that their job status and security is in danger; and secondly they resist change as they feel they would be overburdened with new responsibilities and duties. Middle level managers are generally operating on two extreme levels. Firstly they are responsible for acquiring resources from the top level management in order to implement the strategic actions, while on the other hand they also "reach other assets from lower hierarchy, selecting, for example, specially skilled person to demonstrate on commercial initiatives and acquiring other available or probably new facts and assets-based property required to execute the desired new prospect" (Duane, 2005). However it is also noted that if the middle level managers did not agree with a new process suggested by the top level management then they were also reluctant to implement the transfer of resources and thereby influenced the change management process negatively.
Thus it can be assumed that middle level management does resist change for varied reasons where not only can resistance from this level of management severely hinder the change management process, but also influence the operating level management to combat the processes bringing about a new change.
Reasons for Employees Resistance to Change
While in the process of adopting change, employees may answer with opinion of pressure or reduced assurance. Such opinions should be taken as gauge of how change is being taken and the desired behaviors (Armenakis & Bedeian, 1999). This way, change becomes easy to apply change if change enablers understand what is required from them. Triumphant organizational change is when employees actively participate and have some proposal and plan (Bridges, 2003). Willingness for change is described as a rational step based on some perceptions and intentions with respect to change endeavor (Armenakis et al., 1999). The idea of inclination for change is analogous to Lewin's (1951) conception of unfreezing that has been defined as the course through which organization members' attitude and approach about imminent change are changed so that it can be perceived as essential as well as victorious.
Recruits are vital constituent for the change to be effective, or else it would be just reorganization without any impact (Bridges, 2003). According to Armenakis et al., (1993), Mayer et al., (1995), Wanberg & Banas, (2000) and Young & Post, (1993), "Managers' ability to converse correctly with employees about the change interference improves management trustworthiness and employee openness to change.
According to (Business Performance) employees resist change for a number of reasons. Causes for employee confrontation include:
Belief that the change initiative is a temporary fad
Belief that fellow employees or managers are incompetent
Loss of authority or control
Loss of status or social standing
Lack of faith in their ability to learn new skills
Feeling of change overload (too much too soon)
Lack of trust in or dislike of managers
Loss of job security
Loss of family or personal time
Feeling that the organization is not entitled to the extra effort
A number of people might have multiple reasons for resisting change. According to Bhutan (1995 as cited in Bolognese, 2002) it is necessary to find out the causes behind the resistance and the symptoms of the resistance. There are two categories of opposition; vigorous-opposition and reactive-opposition. "Conditions of vigorous-opposition include cynicism, insult, causing to scares, and exploitations. Reactive opposition include oral commitment rather than practical solutions, feigning unawareness and preserving information" (Bhutan, 1995 as cited in Bolognese, 2002).
Kotler & Schlesinger (1979) state that though an employee would understand that change is required and is necessary, they are unable to make the connection emotionally and they resist the change even while not understanding why they are actually resisting. As per de Jager (2001, p.26), "opposition is simply a very valuable endurance means".
Trader-Leigh (2002) has come up with some more specific factors as to why people resist change; they are stated as follows:
Self interest which refers to the way in which people see the change as harmful in one way or another.
Psychological impact which refers to the perceived impact of the change on job security, professional expertise and social status in the organization.
Tyranny of custom which refers to the tendency to be caught up in the web of tradition.
The redistributive factor suggests that people resist change because through the redistribution of tasks and responsibilities they will stand to lose some or all of their privileges.
The destabilization effect points towards the introduction of new people into the organization who are not familiar with its culture and operations. The destabilization that accompanies such change will be resisted strongly.
Culture incompatibility suggests that a clash between, for example, an academic- and a business-oriented culture will be resisted.
The political effect refers to the power relationships in the organization and the degree to which they are threatened.
Therefore it is safe to assume that change creates feelings of animosity, suspicion and anxiety which are then translated into resistance by employees.
Employee Tactics to Resist Change
Judson (1981) defines spectrum of possible behavior towards a change as follows:
Enthusiastic and Cooperation
Cooperation under pressure from management
Apathy loss of interest in the job
Doing only what is ordered
C. Passive Resistance:
Working to rule
Doing as little as possible
Personal withdrawal(increase time off job and away from work committing "errors'
Trader-Leigh (2002) states that the most common way of resisting change is to maintain the status quo and refuse to change by maintaining the 'tyranny of custom'. In this way the supporters of the resistance state that they are doing no wrong as they are maintaining the traditional way of doing things. This usually happens when employees develop a tunnel-vision approach whereby it is not possible for them to see the future benefits that can be brought about by the change management process.
Another way of resisting change is the withholding of information by operational and front-line managers. The information they possess is crucial to bring about any change management process; however lack of cooperation from this quarter can seriously hinder the implementation of new changes. In order to show their displeasure with the change process, employees may also refuse to take responsibility for tasks they normally engage in. Instead of taking the change management process in their stride; the employees are uncooperative, disgruntled and frustrated with the changes taking place. One way to overcome this hurdle is by adopting a humor filled approach to bring about a change. Bovey & Hede (2001) claim that humor enables the change process to take place in a most effective manner and enables an individual to view the reality in a different context altogether.
Individuals also make use of personal constructs to seem right of their world (Dalton & Dunnett, 1992; Fitzgerald, 2002; Frances, 1995). Personal constructs are the theories that are created in an individual's mind with the help of systematic thought. With the help of these personal constructs individuals can decide to view a particular situation as favorable or unfavorable depending; where negative personal constructs can obviously inhibit the change process.
Various employees may employ the different types of resistances to change but it is management's part to ensure that resistances are not allowed to get out of hand and that the negative energy is channeled into something positive.
Fostering Employee Commitment to Change
Coetsee (1999) states that effective change management demands commitment of stakeholders and utmost management of resistance to change. Hence it can be said that "Commitment" and "Managing Resistance to Change" are prerequisites for successful change management.
"Commitment" has been described as the "Acceptance of Change" in literature of Change Management while as popularly known "Resistance" is the "Rejection of Change".
Commitment and Resistance have been defined as two independent factors in the literature of organizational development associated with "Change". However these two factors are interlinked. Judson (1991) states that any management's capability to attain maximum payback from change depends; in part on how successfully they make and uphold an environment that reduces defiant actions and increases acceptance.
Since change in an organization is an inevitable conclusion and employees are always going to resist the change management process; researchers have developed certain theories that managers can take to overcome resistance to change.
Rosenberg (1993) has suggested the following ideas that can be undertaken in order to overcome resistance to change in the most effective way possible;
Let it sink in: Rosenberg (1993) states that people need time to adapt to the idea of change. It is best to announce the change management plans much before the actual implementation begins rather than springing up the announcement as soon as the actual transition is about to take place; in most cases it has been noted that individuals were unhappy with the rapidity at which the change management course was employed rather than the idea of change itself. If for example a company plans to layoff 20% of its staff by the end of the week; no prior announcement of this action might result in severe chaos, anger and frustration by the employees who would have to deal with the situation there and then which could result in severe emotional and mental trauma.
Teach the staff well: People are usually comfortable with the familiar and suspicious of the unfamiliar. For this purpose individuals might resist changing over to a new system or procedure of doing things simply because they are afraid of making mistakes and would prefer to work according to the tried and tested procedures. Management here needs to ensure that individuals are encouraged to experiment under the new system and are allowed to learn from their mistakes rather than being reprimanded for their behavior.
Relinquish some control: Rosenberg (1993) has mentioned time and again in her article that to bring about an effective change, it is necessary to give autonomy to individuals so that they feel that they are also in control and play an integral role in the course of managing change. Again resistance is not necessarily to the change itself; rather than the way the change was implemented. A good manager would always involve his employees in the change management process to garner their full assurance and support to the change being implemented.
Communication is the key: This is a very important aspect as employees want to be constantly kept in the loop regarding what changes are taking place in the organization. Both the employees and their managers have to keep an fluent mode of conversation so that the queries and grievances of the employees can be addressed by the managers and the managers are also aware of the strategies they would have to use in order to compel their workforce to remain committed to the cause.
If managers want to successfully overcome resistance to change then these are some of the few viewpoints they have to keep into consideration when being involved in a change management process.
Kimberling (2006) has suggested four simple steps for overcoming resistance. For today's management one of the growing challenges is overcoming employee's resistance to change. It is widely assumed that people dislike change.
There are some ways of overcoming employee's resistance to change as given below:
Identify change agents early in the project/program
Train, train, train
Involve employees in the change enabling process
According to Brown & Cregan (2008), "Cynicism tells regarding employee's opinion of their organization's management and it is derivative of employee's familiarity with the environment, it may require considerable efforts by management to trim it down.
Engaging employees is one of the ways of managing Organizational Change Cynicism (OCC). Sharing information has been considered as the approach is suitable top-down form of engaging employees which has important and negative association with OCC. It is believed that information passed down by the management is based on employee accepting of management decisions and thus reducing level of OCC. Taking inputs from employees validates that employees and employers have differing interests in the employment relationship. Delegating the role of decision making reflects shift in the form of employment terms.
Managers and employees work in a cooperative environment where solutions/ decisions may emanate from either side and no more managers are the only authority holders. Engaging employees in decision making reduces levels of OCC.
This helps employees in understanding the fall out of managerial decisions as nothing comes to them as a surprise this undermines the potential of cynicism to develop.
This point of view is further supported by other researchers who state that constant communication and employee involvement is the key to a successful change management process. Communicating decisions justifies change, improves sense of employee effectiveness, and makes clear the changes to employee responsibilities (Young and Post, 1993). Besides, it provides employees information on how the intervention will happen and its fall out and hence allowing them greater control over the process of change.
Successful Change: Paying Attention to the Intangibles
Adams (2003) asserts that though bringing about any sort of change is a challenging and daunting task, confrontation to change can be combated and an organization can make the transition to a new environment successfully. Adams (2003) further states that while there would be approximately 10-15% of an organization's employees who would be resisting change; there would also be another 10-15% who would be supportive of the change. Organizations who have implemented the change management program successfully in their vicinity have done so by involving these proponents of the change management program from the beginning stages in order to garner their full support. This does not mean that these organizations did not face any sort of resistance; resistance to change was there just like any other change management program but it was dealt with in a smart manner so that the hostile and negative feelings of the employees did not take over the entire process.
The basic factors that have been identified by Adams (2003) for successful change implementation are: accepting the need for change, faith that change is both favorable and probable, enough fervent assurance, explicit deliverable goals and a clear starting strategy, structures or mechanisms that require a repetition of the new pattern, feeling supported and safe, patience and perseverance, clear accountability, the responsibility of 'others' in the organization (not just change agents) and rewarding of new behavior. All of these factors combined have worked together in bringing about a successful change program in various organizations that applied these theories or factors either entirely or used combinations that supported their organization structure. The basic premise of bringing about a successful change program has been that it is possible to overcome resistance if a clear strategy if firstly identified and secondly people are managed in such a way so as to develop feelings of enthusiasm and commitment towards the process of change. It is how these intangible factors of change are managed that determines the successful implementation of any change management program in the world.
Simultaneously, with fast pace of change organizations are currently experiencing, there is parallel increasing interest in the role of organizational trust within these processes. (Mayer et al., 1995). Lower level of trust in organization will make change look doubtful and upsetting. Change agents need to take a closer look at trust and control factors in order to comprehend better how a constructive association among employees and employers can be continued.
Triumphant organizational change can take place if employees stick to the processes sketched by organizational leaders. Non-acceptance or refusing attitude towards change may harm the relation between individual and organization (Ferguson & Cheyne, 1995).
On the other hand, control is seen as 'a regulatory process by which the basics of a system are made more foreseeable by making standards in the pursuit of some preferred goals or state' (Leifer & Mills, 1996, 117). This means that when employees have a high sense of control over a change intervention, it means they predict the result associated to it, hence they feel comfortable increasing the probability of sticking to the change.
Some authors have treated trust and control as substitutes (e.g. Inkpen & Currall, 1997; Leifer & Mills, 1996), such that the more trust there is in a partner, the less need to control its behavior.
A different approach is presented by Das & Teng (1998) which state that these parallel phenomena hold a supplementary character. According to them, "If employees' perceptions of control over change represent how comfortable and familiarized employees are concerning the change, what is the impact of lower or higher control in the relationship between employees and organizational agents? Although the stronger is employees' trust in their supervisor, the more committed these employees are to their organization, we believe trust has differential effects on work outcomes depending on how employees perceive change (i.e. how much they feel they control the change process)".
For this purpose Das & Teng (1998) explain the concept of organizational change interventions. Organizational change interventions are situations in which both perceptions of trust in the supervisor and control over change are high stake factors because of the risks entailed in them. A situation in which employees have low perceived control over an organizational change intervention is a situation where trust concerns are increased. If an employee has lower control over the change, a trusting relationship with his supervisor will help him maintain his level of commitment to the organization. As a consequence, not only employees with low perceived control over change and low trust in the supervisor are expected to have the lowest levels of organizational commitment, but also the relationship between trust in the supervisor and affective organizational commitment is stronger for employees with lower perceptions of control over the change intervention.
Brockner et al. (1997) found that when trust concerns become more prominent, the level of employees' trust in organizational authorities is more likely to influence their support for the organizational authorities and their organizational commitment.
The Hard Side of Change Management - The DICE Factors
Sikrin et al. (2005) has a different opinion on which factors to focus on when bring about the change. Recently the gurus of change management tend to pay more attention and emphasis on soft factors such as culture, leadership and motivation. These factors play an integral role in making an organization attain success but one cannot focus on these factors only when an organization needs to be transformed. Such basic factors do not always affect the change management programs in organizations. For example, a good leadership is essential to the success of any organization but is not the sole affective factor. Communication plays a major role when bringing about any change but again, is not the only factor to severely affect the change process. The most difficult factor to change is changing the mindsets of individuals; individuals and organizations have certain perceptions and behaviors that are so deeply inculcated in their personality that it is very difficult to steer them in a different direction. Sikrin et al. (2005) also states that while surveys can be conducted to understand the effect of such soft factors such as culture and leadership, it is difficult to quantify such soft factors.
An emphasis on the unconventional outlook of change management, the hard factors, is also important to be taken into consideration. These factors have three important characteristics which are as follows:
Organizations are capable to evaluate them in straight or circuitous methods.
Organizations can simply correspond their significance, both inside and outside of the organizations.
And possibly mainly vital businesses are able to influence those essentials rapidly.
Such important factors that directly affect the change process are the time span taken to undergo a process, the individuals necessary to carry out the various job requirements and ultimately the financial returns that such an activity leads to.
There are numerous researches that depict that hard factors play an essential role in bringing about any sort of change process, else the organizations face failure. (Sikrin et al., 2005). On the other hand it is also necessary for the management to pay an equal amount of attention to the soft factors. However, if organizations do not firstly emphasize on the hard factors, the entire change process would result in severe failure.
Sikrin et al. (2005) write in their article that they gained an insight into a new aspect when they studied and identified the basic factors of change that all processes shared. They conducted a hypothesis that studied how various organizations conducted similar transformation programs. For this purpose the authors studied various industries in various countries in order to take out the common elements. 225 companies were part of the research conducted where it showed that there was a directly related relationship between the outcome of a change process and tough four elements: "plan life span, specifically the time between plan feedbacks; performance veracity, or the abilities of project teams; the dedication of both higher staff and the lower staff whom the transform will influence mainly; and the extra attempt that peoples must make to manage with the alteration. They named these factors as the DICE factors since we could stack them in support of projects' accomplishment" (Sikrin et al., 2005).
According to Sikrin et al. (2005) "We finished our learning in 1994, and in the 11 years since then, the Boston Consulting Group had used those four elements to forecast the results, and direct the completion, of more than 1,000 change management stances globally. Not only has the association held, but no other elements (or combination of these factors) have forecasted results as well."
The Four Hard Factors
Organizations work with the four factors in different ways in order to create new combinations. On one end of the continuum, there are projects that will ultimately face success than the ones that are going to face failure on the other end. For example, Sikrin et al write, " At one end, a small plan led by a capable, ambitious, and consistent team, led by top management and implemented in a division that is open to the change and has to put in very little further attempt, is destined to thrive. On the other end, a lengthy, designed plan implemented by an unskilled apathetic, and incoherent groups, without any higher management sponsors and aim at a function that disapproves the alteration and has to do a excessive efforts, will be unsuccessful".
Through this process the organizations can then find out which change program fell at which end of the continuum. However, most of the change processes ended up in a neutral position where it was difficult to find out if they were a success or if they had failed. It is the responsibility of executives to conduct an in-depth analysis of the DICE factors to decipher which direction the change program go.
Following are the DICE factors:
D. The time span "Duration" required concluding a transformed plans if it has a limited duration; if not limited, the longevity of time between feedbacks of objectives.
I. The plan's team's performance Integrity; that is, its skills to finish the program on time. Which are linked to team's abilities and expertise as per plan's necessities.
C. The Commitment to revolutionize that top hierarchy (C1) and staff affected by the transformation (C2) display.
E. The Effort other than the routine work that the transformed initiative necessitates from staffs (Sikrin et.al., 2005).
This study therefore goes to show that there are multiple methods that could be adopted in order to bring about an effective change management process. Furthermore, case study research shows that there are multiple methods adopted for managing change. "While many prescriptions, guidelines and models exist, managers responsible for executing the changes are selective in the way they use these ideas" (Storey, 1992).
Keeping in mind the above mentioned point of view we can assume that to a major percentage of the change varies from person to person. "Those who see themselves as creating organizational change as an intentional process (i.e. top management formally leading change) will have a different perspective to those who are on the receiving end of change" (Kanter et al., 1992).