Change Management Within Muscat Bank

Importance of Change Management in Organizational Structure

Discuss about the Change Management in Bank Muscat for Culture.

In the recent years most of the companies are dealing with a world of constant change in consideration to its operations whether in service or the production sector. Certain factors that include external as well as internal aspects serve as triggers or change drivers within the companies. The companies those are capable to realise the process of changing surrounding are able to rapidly adapt to such change (Al-Haddad and Kotnour 2015). The companies will only be able to survive and address organizational need in order to bring in drastic change. Such changes are considered within different dimensions of business life, organizational structure, business strategy, culture, human resource along with technology. Considering the same, change management can be defined as a process of continuously managing, developing along with sustaining change along with improvements within the organization. The importance of change includes that the organizations can respond quicker to consumer demands and facilitates in aligning the existing organizational resources. This also includes enhancement in employee performance, decreasing risk and inefficiency along with the opportunities to develop more. Considering the same, the report will focus on explaining the change management within Muscat Bank.

There are three types of change management relied on which the companies carry out change management by means of implementing the below explained ways:

• Structured Change: This is deemed to be a change in a way that the company is managed as well as designed. Structural changes encompass the hierarchy focussed on authority, goals structural characteristics and administrative processes along with management systems. Almost most of the changes in the way company is managed come within the structure changes category (Bruni, Banks and Runyan 2017).
• Technological change: Such change is associated with a company’s process of production regarding the ways in which companies accomplish their work. Technology changes are developed in order to make the manufacturing of a service or product highly effective.
• Culture/ People Change: Such change indicates certain changes within values, norms, attitudes, behaviour and beliefs of employees. Changes within culture along with people pertain the ways in which employees think. These are the changes that remain in mindset and not in technology, products or structure. People change includes just few employees in a way that just few middle managers is sent for taking a training course in order to enhance the leadership skills. Training is deemed to be the most frequently used tool in order to change an organization’s mindset. An organization might provide relevant training programs to a huge employee base on certain objects that includes teamwork, listening capabilities and quality circles along with participating management.

As per Bruni, Banks and Runyan (2017), the company deals with certain change pressures from the environment and along with those managers might observe opportunities and consider advancing certain existing strategies. The vital change forces are explained under:

• Technical improvement along with obsolescence: Certain technical change pressures can take place from an organization’s external environment in the form of new developments carried out by competitors along with availability of new technologies. This might lead to formation of new developments by the competitors that ensures availability of new technologies which the organization might consider using. Internal research or development can also result in persuading the managers to generate internal technical change.
• Political and Social Events: Most of these change pressures might take place from external environment and these do not remain in control of the company and the organizations require responding through changing.
• Competitive Environment: Certain changes have been observed in globalization that has altered competitive conditions to which organizations are focusing to respond through developing innovative strategic alliances. This is deemed to result in changes within the organizational culture, structure as well as style.
• Increased Strategic Awareness and Skills of Employees and Managers: In the recent years employees are observed to be well trained and skilled with ambitions desires for the job satisfaction. All such aspects need opportunities for growth in the company. This can be provided only through alternating the job scope or by means of offering increased responsibilities. New leadership might also change expectations along with the working environment.

Verhulst and Lambrechts (2015) elaborated that employees have the tendencies for change resistance and there can be positive and negative reactions of employees towards the change. Certain negative reasons for change resistance of the employees includes misunderstanding regarding the need for change in a situation where the change reason is not clear. Bridgman and Brown (2016)also explained that the employees tend to resist change because of their fear of unknown, lack of competence, being connected in an old way, low trust, lack of being consulted, poor communication along with absence of rewards and benefits. These researchers also evidenced in case employees do not realise the change need that can expect resistance, particularly from those who greatly believes the recent way of doing things works well.

In contrast, Bridgman and Brown (2016)elaborated that there are several positive reasons because of which the employees of an organization resist change in their workplace. Such positive reasons include loss in status or their job security in the company, current reward system is better than the proposed rewards that will be offered after change takes place after proper training during change. Verhulst and Lambrechts (2015) stated that within an organizational setting job security indicates that employees, managers and peers might resist technological along with administrative changes. This can further result in their job role being compromised or decreased. From such perspective, the employees hold a positive tendency to resist change as this might lead to a situation where change can be harmful to their place within the company.

Types of Change Management

Negative reactions in work environment:Verhulst and Lambrechts (2015) indicated that the employees are deemed to be unmotivated to work along with their performance will decrease accordingly. In addition, these researchers also indicated that there will also be there that can ensure enmity among the enthusiasts along with non-enthusiastic for change along with that they tend to get depressed with the work. According to Verhulst and Lambrechts (2015) there are several implications of successful change implementation along with the negative and positive employee reactions towards change within the work environment. These researchers also indicated that the positive implications of change resistance by the organizations includes affecting the communication at the time of the change process. This is for the reason that the success of change initiatives by organizations depends on the employee reactions that can drastically impact the organizational information communication regarding change. This can further impact their positively influenced reactions towards the change taking place in the workplace.

Positive reaction in work environment: Van der Voet (2014) indicated that the psychology of positive employees will be enthusiasm within the work along with the considering that performance will enhance. This will also make the employees happy and will be ready to be an aspect of change due to the fact that they believe they can attain advantage from change. Van der Voet (2014) elaborated that there can be several negative implications of employee resistance to change. For instance, the resistance to change caused by the employees fear of job security can lead to impact the company’s decision making on downsizing at the time of financial difficulties. This can also result in affecting company’s decision making regarding dealing with its financial difficulties for saving excess operational costs. Such change resistance from employees can also result in sacking employees whose position is found not to be that important in the company by the management. Verhulst and Lambrechts (2015) also added that certain positive implications are also there in change resistance of employees that includes positive commitment towards the process of the organisation as it can disturb the comfort zone and effectiveness of employees in organizational working system.

It is vital for the company to have efficient management for ensuring effective change management to order to ensure success. In accordance, the company conduct change management through two manners managerial approach along with change agent in order to attain change resistance, motivating along with engaging staff within the change process.

1. Managerialist Approach: Considering the approach of all the seniors of the company, the management decides a particular strategy in order to conduct change management (Lozano, Ceulemans and Seatter 2015). This will also be carried out by the following:

• Offering Education:
• Most individuals including the managers and academics agrees that the process of change must initiate with communication along with education.
• Internal stakeholders those are affected by the change should be given a better explanation regarding the change reasons and the ways in which they will personally be impacted by the change.
• Employees needs to be educated regarding the change needs and the ways it can be advantageous for them. They must also be educated on the relevance of regularly updating along with developing individual skills, capabilities along with knowledge.
• In certain companies there will be enough to deal with any change resistance. In others, this might not be enough.
• Participation and negotiation: Involving all the affected stakeholders within the change process is highly vital. Those who are impacted by such change can be asked to implement such change. Through carrying out the same, that will also have certain ownership feeling regarding the change.
• Culture along with Communication as well as Teamwork: Company based cultures which encourage co-operation, sharing of information along with frequent interpersonal communication will find it to be simpler in introducing change within others. Through encouraging communication along with discussion people become willing to “learn together” (Lozano, Ceulemans and Seatter 2015).
• Support: Supporting along with encouraging the people those are impacted by such change that will reduce their resistance within it. In consideration to same, support systems along with networks that includes guidance, training along with counselling needs to be set up.
• Reward Systems: This encompass recognising those teams or employees which have successfully managed change along with rewarding them. They might then act as role models for others within the company.
• Leadership: Effective leadership is vital in developing open and innovative along with enquiring company culture. Leaders will have to develop companies in which individuals continuously develop their knowledge and skills.
• The use of force: Finally, in case everything fails to make the employees willing to deal with the change, management might apply certain force such as coercion. This indicates forcing certain change by means of using the difference in power between the management along with ordinary staff. Such tactic might not be suitable in certain cases along with having negative impact on the management employee relationship after the changes.

Positive and Negative Employee Reactions Towards Change

Lozano, Ceulemans and Seatter (2015) revealed that change resistance will be less in case the change is not imposed but is ensured by those impacted by the change. Change is also made sure in case it is observed to attain certain advantages to those impacted by the same. Change is also highly accepted in case it provides an interesting challenge. In addition, it can also be indicated that change is simpler to implement in case senior management genuinely values the same. 

Lozano, Ceulemans and Seatter (2015) stated that change agent acts as an individual or group from outside or within the company that conducts task of managing and instigating change within the company. In such scenario, the agent will be accountable to conduct change management along with making the same successful. Moreover, the managers will also be free for carrying out their routine jobs along with making sure that their jobs are not highly impacted.Bankmuscat.com. (2018) evidenced that a change agent provides several advantages explained under:

• Offers a focus for the change for the individual in the manner that represents the process. This individual then turns out to be a live symbol of change that motivates other people to get changed.
• In case a consultant is appointed from outside the individual can be an expert in dealing with such process along with having the experience of conducting the identical process everywhere. The individual will be properly acquainted with certain related problems and would also know to deal with the same in an effective manner.
• An external change agent might also indicate the objectivity that is highly needed within the process.
• The introduction of a change agent will indicate that the senior management is not required to be totally occupied in the process.

Permanent behavioural changes encompass three major aspects:

• Unfreezing: It is other than the existing practices along with ideas which turn out to be a barrier of change. It also includes the readiness to acquire as well as learn a new behaviour. This generally needs a trigger such as decreasing profits or sales along with posing a threat related with acquisition or business closure (Hajri, Göknil and Briand 2017).
• Change: This takes place at the time the individuals those feel the need for change attempts to implement certain new ideas. Changes might be introduced either drastically or gradually. Distinct techniques might be employed for the same.
• Refreezing: This takes place at the time innovative business patterns are accepted as well as followed in a better way and willingly. People are highly supportive as well as convinced regarding the need for change along with likely benefits.

Bankmuscat.com. (2018) revealed that Muscat Bank of Oman is a banking organisation that offers various investment along with commercial banking services and products. The bank was established on 30^th April, 1982 in Muscat, Oman. The company has its business operations all across the consumer, wholesale, corporate, global along with the Islamic banking segments. Van der Voet (2014) explained that the bank also offers products associated with personal banking that incudes savings accounts, payroll accounts, fixed deposits, educational loans, home loans, loans for overdrafts. In year 2013 Bank Muscat opened new division for Islamic Banking (Bank Methaq).

In a situation of increased competition along with innovative government regulations in the Sultanate of Oman, there has been a need for the Islamic Bank in order to compete in the market. This has further resulted in emergence of new competitors in the Muscat Bank. It is also observed that the Senate of Oman is a Muslim nation. For this reason a huge consumer base shifted their accounts from conventional banks like Muscat Bank to the Islamic Banks. Razalli, Hasnan and Noordin (2017) explained that this has led to the decline in a number of consumers of Muscat Bank. This can lead to decrease in the profits. In consideration to such reasons, the Bank Muscat has considered implementing Change management for turning out to be successful along with adapting with changing marketplace.

Benefits of Internal Change Agent

In order to sustain a strong position within the banking sector of Oman was being able to adapt in the changing marketplace. Moreover the best banks consider providing conventional and Islamic services and products; Moreover, Muscat Bank has considered change management by open an Islamic Banding division considered as Methaq Islamic Banking. The organization has been persuaded to make necessary changes within the structure for offering services and products along with complying with the Islamic Provision. For this reason it will be made sure that the change will be carried out and followed by employees. Such change has also did not face any resistances from employees and the company has selected internal agent based change agent approach for being responsible for change. This will be responsible for change and will persuading the best strategies, management system along with procedures. This will also be responsible for convincing the staff regarding the reasons, advantages along with the way of attaining such changes.

Due to certain changes, negative as well as positive reactions have taken place in the organizations. For the reason that some employees of the bank accepted and was excited regarding such change they observed such change to be advantageous to the individuals along with the organization (Cummings, Bridgman and Brown 2016). This encouraged the employees in contributing to such changes. On the other hand, employees those are not that enthusiastic regarding change have rejected such change. This resulted in the delay of employees for the departure and attendance, psychological pressure along with lack of interest within work. The bank implemented such change process despite of having presence of resistance concerned with employees.

It is gathered that Muscat Bank dealt several challenges in facing several issues along with the change implementation. The goals along with the reasons of change considering the method of persuasion is not communicated adequately to the employees that has resulted in several change resistances. It is also deemed to be clear that the interval change agent lacked enough experience within Islamic Banks long with its mechanisms that has skills of convincing employees resulting in employee resistance (Cameron and Green 2015). In addition, the internal agent is deemed to be impacted by past relationships with the managers and colleagues. This indicates that the decision makers along with the strategies are also affected by other employees. Additionally, the bank Muscat does not consider recruiting employees from the Islamic Banks. In addition, the Bank Muscat did not follow in a better way all the change management stages for attaining permanent change. Effective change can be ensured through process of unfreezing, change and refreezing. Moreover, there is no commitment from change and the employees are not interested within the goals and results of change over that. Conversely, few of the employees were ignored and are not observed to be involved within the change process that resulted in certain issue along with barriers against the change.

Successful Implementation of Change by Muscat Bank with Methaq Islamic Banking

3.4. Recommendations for Muscat Bank for Better Change Management Handling in Future

• Muscat Bank must select a better way of attaining change management through employing manageriaistic chance or internal and external change agent. Previously it was observed that internal change agent was not suitable to be accountable for change.
• Requires following necessary stages on order to observe permanent changes within the consumer behaviour that includes unfreezing, change or refreezing.
• Must maintain their commitment for change from all its employees
• Aims and reasons for change needs to be communicated in a better manner.
• Certain changes must take place after persuading the employees regarding the advantages, reasons along with the aims of change.
• The internal change agent must never remain biased for their previous relationships with all its employees.
• Employees require to get associated within the change process in order to attain positive results
• The change objectives require to be associated with mission and vision of the Bank

Conclusion

Change is deemed to be vital in maintaining sustainability of organizationsalong with its development. It is an important aspect that every organization must focus on such development and strive to attain benefit from it. For the reason that Muscat Bank has focused on implementing change management through opening new division of Islamic banking known as Methaq Islamic Banking. This is because of elevated competiion along with allowance of new government regulations focused on Islamic banks for maintaining competition within the industry. The bank has also considered employing internal change agent to ensure business success. This is also facilitate and persuade staff to accept such change and also for attaining objectives of the company. Moreover, such change has currently recentky faced resistance from some employees that impacts the change. For such reasons, every company requires to focus on the importance and advantages for change. Moreover, the objectives of change must be associated with the mission and vision of the companies.

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