REMARKS:—Please link most of the information including the models with the chosen organization by giving specific examples or situations to meet the requirements
LO1 Identify and analyze the implications for managing strategic change in supporting organizational transformation.
LO2 Analyze the organizational management challenges faced during the transformation and changes experienced by the organization.
LO3 Analyze and evaluate the significance of strategy employed in trying to bring about an effective change management in an organization. How does this impact leadership and human behavior in the organization.
LO4 Evaluate different change management theories propounded on management and leadership attributes which leads to enhanced contribution by managers and the employees.
This report is based on strategic change management in National Bank of Abu Dhabi that is also known as NBAD. The report gives an overview of the organization and includes the current position of the organization. Furthermore, the background of what change means is discussed in-depth and where possible examples given. The report also gives the rationale for the use of the change management processes described concerning NBAD. The next section explores the drivers for strategic change in NBAD as well as their resource implication. The best change management strategy for NBAD is then explored with each of the elements well elaborated. The next section covers the issue of resistance that must show up whenever a change is being instituted. Last but not least, the report presents a series of recommendations and a summary of the gist of the whole content. The last part has a list of sources contacted when compiling the report.
Background of the Organization
Emiri decree established the National Bank of Abu Dhabi also known as NBAD in the year 1968 (NBAD, 2015). NBAD was the first local bank to play a role in the process of revolutionizing the financial systems of Abu Dhabi and the UAE in general (NBAD, 2015). Today, the bank has expanded its operations through branches and offices that are present in more than 19 countries in nearly all the five continents (NBAD, 2015). NBAD has branches in UK, France, South America, China, Libya, Sudan, Egypt, and Brazil. Furthermore, NBAD also has a one of the largest networks in the UAE (NBAD, 2015). The governance of NBAD is through a board of directors whose members have diverse experience in various domains and fields that act as a success factor for the bank. The senior management team guides the strategic direction of NBAD is as well as manage the daily operations of the bank (NBAD, 2015). The current CEO is Alex Thursby, who took the lead in 2013 (NBAD, 2015).
Throughout the past years, NBAD continues to receive accolades as well as awards in different categories (NBAD, 2015). The awards span on strategic operations such as business, leadership, technology, organizational excellence, products and retail products both locally and internationally. NBAD is placed among the leading banks in the Middle East and ranks in the top 5 as the safest banks globally (NBAD, 2015). The Foundation in Abu Dhabi and thus an understanding of the dynamics associated with the Arabic regions, NBAD is better placed to understand the connections between the Arab areas and the markets in the world. NBAD lists on Abu Dhabi Stock Market since 2000 where it originated with almost 30% of its shares (NBAD, 2015). NBAD’s mission is to be recognized as the world’s best Arab Bank (NBAD, 2015). The success of the bank lies with the mission that ensures the customers are well served through the provision of excellent services and products (NBAD, 2015). NBAD has three strong pillars that anchor its development mission (NBAD, 2015). They include home markets wholesale network markets and new franchise markets (NBAD, 2015).
Background of Change
Change whether at personal or organizational level is inevitable and determines the future directions as well as success (Carraher, Buckley & Carraher, 2008). In the complex business world, most organizations seek refuge on organizational change so as to remains relevant. External, as well as internal forces, are a substantial hindrance for organizations to meet their objectives, remain sustainable and prosper (Carraher, Buckley & Carraher, 2008). Management of strategic change within the current market is one of the dilemmas that most managements have had to come to terms with through valid solutions. The pace with which an organization responds to change determines its rate and thus level of success in the market (Carraher, Buckley & Carraher, 2008).
Some trends shape the direction in which change occurs in the contemporary business environment. First off, globalization has made the market complex by expanding competition. Organizations also change to include diversified workforce as well as outsource some of the labor (Adenike, Omotayo & Abolaji, 2013). Secondly, advancement in information technology continuously makes organizations reconsider their old systems and upgrade thus keeping pace with the rest of the competitors in the market (Adenike, Omotayo & Abolaji, 2013). Raid technology makes the old systems obsolete, case in which organizations have to invest in new technologies that would optimize their operations and confer a competitive advantage (Carraher, Buckley & Carraher, 2008). Additionally, changes within the IT systems force the organizations to acquire the new systems due to the security and other range of advantages that they assure the organizations.
Thirdly, innovations in management and leadership also guide the direction in which change in an organization takes for total benefits. As the management of the workplaces and organization transform into new strategies, the organization is left with the options of engaging new operational human management within the organization (Naghibi & Baban, 2011). Changes in the industry and the market also force the organizations to resort to change. The regulations within the markets, as well as the legal obligations of organizations, are very dynamic making change the best way to cope with the pace. Lastly, situational factors such as continued or sudden failure of an organization can also elicit change in an organization, so it soars back to normalcy (Naghibi & Baban, 2011).
There are different types of organizational changes (Naghibi & Baban, 2011). First off, there is planned change that occurs when the leadership deliberate and resolve for the need of change so as to proactively organize and execute the change (Adenike, Omotayo & Abolaji, 2013). Secondly, there is also unexpected change that is random and determined by the prevailing situations of the organization (Naghibi & Baban, 2011). Transformational change, on the other hand, is broad in nature and occurs when an organization changes its culture, structure and the way it operates (Naghibi & Baban, 2011). The opposite extreme to transformational change is incremental change that involve alterations in the organization without necessarily changing the culture of an organization (Adenike, Omotayo & Abolaji, 2013; Naghibi & Baban, 2011).
Another type of change that is common in most organizational literature is the developmental change that occurs with the chief aim of making a situation efficacious such as increasing market share and expanding the customer base (Naghibi & Baban, 2011). Last but not least, remedial change as it name suggests seeks to defuse a situation such as improving the performance of a new product or service as well as improving the organization so as to be successful (Naghibi & Baban, 2011). Examples of organizational change include operational or structural change, technological change, mission changes, HR management changes, and strategic changes (Naghibi & Baban, 2011). Some factors make the National Bank of Abu Dhabi (NBAD) destined for organizational change as well as the best methods and strategies to make the change work better.
Models of Change Management and Relevance to NBAD
There are different perceptions of change depending on the extent to which the people and organizational processes affect each other (Normandin, 2012). There is no single best way to manage change. However, some models have been proposed by previous organizational studies literature. For the scope of this paper, Kurt Lewin’s Model and Kotter’s Model are the key change management models that are relevant to NBAD.
Kotter’s Change Management Model
Kotter came up with a multistep approach that involves eight stages in defining the direction and success of change management in an organization or a system (Sharma, 2007 p.47). In some literature, this model of change is referred to as one of the most influential contemporary model of change management in organizations through eight steps. The model advocates for optimized communication before, during and after the change process (Normandin, 2012). The initial step of this model involves *creating a sense of urgency. Here the leadership or management actively involves themselves in analyzing the competitive environment through forecasting the potential opportunities as well as threats (Normandin, 2012). Additionally, there must be awareness of the organizational forces that create the urgent need for the change (Sharma, 2007).
* The second step crucial to the model involves the formation of a ruling coalition (Sharma, 2007 p.47). In this stage or stage, a management team is set up to lead the change. The process involves thorough scrutiny of the management based on their competence then constituting a team that is change oriented.
* The third step is to create a vision for the intended change within the organization (Sharma, 2007 p.50). A clear vision acts as a guide for the change strategic direction as well as influences the perceptions of the people who are expected to be affected by the change such as the employees.
* The next step involves the communication of the vision. Communication is integral in the process of strategic change management. Therefore, the management team has the mandate to come up with better communication strategies for the conceived vision (Sharma, 2007 p.49). Sharing the vision through effective communication tools makes the people in the organization aligned towards the achievement of the vision.
After sharing the vision, the organization must get rid of the potential perils towards the change or rather the obstacles (Normandin, 2012).
* Some obstacles make change fail in organizations. In this step, all the barriers that might affect the smooth flow of the change strategies are exhaustively identified and taken care of within the organization. For example, to prevent resistance, an organization must empower the employees to remain congruent with the vision (Sharma, 2007 p.48).
* The sixth step in this change model involves the creation of short-term goals or objectives that set the milestones to set for achievement within a given timeline (Normandin, 2012). These goals need to be smart and assure the employees of rewards after their achievement. These aims can also be used to measure the direction and level of success of the change that an organization has taken (Sharma, 2007 p.48).
* The next stage in the model is building on the change. Most of the work come in this stage that must roll out all the plans to ensure that the change is instituted in the organization. In this sense, the management that is charged with the change management process must be persistent with the strategies that are meant for the change (Sharma, 2007 p.48). Consistency ensures that the change becomes part and puzzle of an organization.
* Lastly, the new approaches must be grounded in the organization. It is at this stage that the organization is adequately prepared for the transformation ahead. In most cases, the change becomes an organizational culture reflected in all the three levels of organizational culture (Sharma, 2007 p.49).
Kotter’s change management model has a plethora of advantages. Firstly, the process of conforming to the model is stepwise making it easier to consolidate the necessary ingredients required for each step. Furthermore, the steps also aid in determining the need for more efforts for the success of the subsequent changes (Sharma, 2007 p.52). This model has an assurance of fewer resistance behaviors from the employees and the leaders. The model also advocates for the creation of a perfect vision that coupled with a change management team assures an organization of successful change (Sharma, 2007). The model also has steps that are easy to transit between making it easy to track failures in the change management process in an organization.
The model also prepares the whole organization in accepting the change before the actual change thus making it easy to predict the potential drawbacks and benefits of the proposed change. However, the method has a few drawbacks (Sharma, 2007 p.52). Firstly, none of the steps can be skipped since they are interdependent. Secondly, the implementation of the model and the whole process of change might be lengthy, costly and complex (Sharma, 2007 p.52). NBAD should adhere to this model being that the change will need to be implemented parallel to the current practices in the organization. Additionally, due to the lengthiness of the model and stepwise solutions, NBAD can plan effectively on the timelines to incorporate every tenet for the change to work in the long run.
Kurt Lewin’s Model
Lewin’s change management process remains one of the widely used change management model. This model derives from the force-field theory described by Lewin (Sharma, 2007). According to the force-field theory two major forces that are resistance and drivers to change act antagonistically (Sharma, 2007 p.43). A balance between the resistance forces and driving forces of change means that the changes cannot work being that the organization is in inertia. For change to occur, therefore, the forces instituting change must outweigh the forces against the change (Normandin, 2012). This model advocates for the minimization of resistance and increasing the forces that constitute change (Sharma, 2007 p.44). The model proposes three major steps that are unfreezing, move and freezing stages. The change process begins with preparations that pave the way for the subsequent real action (Sharma, 2007 p.44). The major aim of the preparation is to evade the turmoil or chaos that happen when change backfires.
The unfreeze stage involves laying down strategies for the adequate preparation of the organization for change. The essence of this step is to make change palatable in the organization through outlining the necessity for change in the organization. During this phase, the current cycles composing the status quo are broken down in order build up the new operating strategies (Sharma, 2007 p.45). For the actual solution of the current state of affairs, there is a need to create a message that compels the organization to see the need for change. Such messages could be a failure of existing systems, poor market performance, and poor customer feedback among others (Normandin, 2012). In this way, the whole organization aligns itself with the idea that there is a necessity for change in the organization (Sharma, 2007 p.45). The key starting point for is the challenging of the current organizational culture including the values, customs, beliefs and attitudes of the people in the organizations (Normandin, 2012). This step proves to be stressful and time-consuming. Being that the whole process of change depends on it, adequate measures and rigorous efforts must be invested to ensure that it is a success within the organization (Sharma, 2007 p.45). This step literary creates a potential crisis that builds the resilience and motivation for change that defuses the status quo, as shown in the diagram below.
Lewin’s Three-step change model (Sharma, 2007 p.45).
The second step is the change itself, otherwise referred in the literature as moving (Sharma, 2007). Following the uncertainties or rather crisis created in the preceding stage, the change stage comes in to respond amicably through offering alternatives solutions (Sharma, 2007). This period convinces the people in the organization that the new direction is palatable and has benefits for the organization. However long this period may take, it is essential that all the people understand the implications of the proposed change. The potential advantages of the change drawn from the unfreezing stage must be communicated and internalized by personnel (Sharma, 2007). It is through this that the resistance is overwhelmed by the change forces, the beginning of a successful strategic change in the organization in question (Sharma, 2007). Some resistance might be present at first but as people internalize the benefits, the opposition slowly fades, and change is incorporated into the organization. In some instances, force can be used to coerce people to get involved in the change process (Cameron & Green, 2012). The key determinants of this phase are communication and time as well as prudent and sound management practices.
The last stage is the refreeze stage where the changes are made permanent within the organization (Sharma, 2007). This stage comes after the process of implementation of the change in the second step. It is majorly meant to stabilize the organization (Cameron & Green, 2012). Some of the indicators of refreeze include stable market performance, consistent job analysis and description and a stable organizational structure and chart (Cameron & Green, 2012). This stage aids the people in the organization to introduce change into the organization for the better. Time, resources and communication play an integral role in this step reshaping the notions of the people in the organization.
Factors Leading to the Need of Change in NBAD and their Resource Implications
Change is situational, and many factors either in unison or combination determine the need for change. There is a conglomerate of internal as well as external factors that make it necessary for change within an organization (Auster, Wylie & Valente, 2005 p.55). The National Bank of Abu Dhabi ranks among organizations within the UAE that are growing at a faster rate. This means that the customer base is also increasing and thus the need for new products and services in the market (Auster, Wylie & Valente, 2005 p.55). Furthermore, the bank also needs to expand its footage in the countries where it does not have branches globally. The expansion process means that investments in terms of time and money have to take precedence (Auster, Wylie, and Valente, 2005 p.55).
The plans that are underway for the expansion of the bank imply that some external forces are likely to force it to change (Auster, Wylie, and Valente, 2005 p.63). Firstly, competition from similar businesses in the market, definitely drive NDAD towards embracing change (Kamel, 2012 p.1). Secondly, different countries have different legal, political, social and cultural perceptions that need to align with the mission of NBAD (Auster, Wylie & Valente, 2005 p.64). Thirdly, technological advancements in the banking sector that confer competitive advantage also make change palatable within NBAD. External threats such as security breach and theft also warrant the need for change within NBAD. Moreover, the complex concept of globalization has an implication on the management practices, especially the management of diversified human capital (Auster, Wylie & Valente, 2005 p.65). Essentially, human resource management determines the success in the war of talent and the ability of an organization to become an icon and thus employer of choice.
According to Dunphy, Griffiths and Benn (2014 p.52) new business models that assure an organization of sustainable development make an organization opt for positive change. Some of these models ensure that the needs of the stakeholders are taken care of when planning for change (Dunphy, Griffiths & Benn, 2014 p. 52). The other driver for strategic change is natural capitalism where organizations see the need to increase their productivity based on the available resources (Dunphy, Griffiths & Benn, 2014 p.53). In this sense, the fundamental objective of change instituted in an organization is to gain a competitive advantage over its competitors in the market (Kotter, 2007). For the case of NBAD, it is intuitive that there are competitors that are likely to limit the market share of NBAD should be proactive actions through change delay. The other driver of change is the need to reduce costs and spread or minimize the risks (Dunphy, Griffiths & Benn, 2014 p.54). Authentically, for NBAD to regain its competitive edge, a sacrifice has to be made on additional actions that eat into its budget. Additionally, the financial industry being perilous and susceptible to risks such as economic crisis, change within NBAD is an assurance that the risks are spread handily before the organizational experiences the change. The need to become a knowledge-based organization also makes a change an obvious option for an organization (Auster, Wylie & Valente, 2005 p. 67).
Failure to integrate change within an organization has a few implications. Firstly, the business is likely to either stagnate at its current position or fail entirely as a result of competition from its peers (Kamel, 2012 p. 3). Secondly, the organizational commitment of the human resource is likely to reduce making the organization loose the war of talents (Kamel, 2012 p. 5).
Change Management Strategy for NBAD
The best strategy that NBAD can use for its strategic change is the one that involves the stakeholders. Stakeholders are people who are affected or affect the organization in question (Kotter, 2007). The first step would encompass planning for the change (Garets, Eastman & Garets, 2010 p.14). Here, the management would have to identify the need for change within the organization (Kotter and Schlesinger, 2008). Secondly, the management would the consult far and wide with the stakeholders including the employees, the executive team, and the customers (Garets, Eastman & Garets, 2010 p.15). The management would need to communicate the vision of the change adequately to the stakeholders so that they are prepared (Kotter and Schlesinger, 2008). For example, when NBAD is bound to acquire new Technological devices to be used for the sake of customers, the customers have to be informed of the benefits of the proposed systems compared to the old systems (Garets, Eastman & Garets, 2010 p.16-20). Additionally, for the employees, it should be made clear why the new systems are necessary and the corresponding impacts that might accompany the acquisitions of the systems. (Kotter & Schlesinger, 2008) The team of stakeholders together will determine the success of the change (Kotter, 2007).
NBAD then needs to conduct a feasibility study on organizations that have successfully used the change methods successfully. The next step would be to ensure that there are change management teams led by the change agents (managers) in the organization for successful implementation of the systems that champion the change. In a nutshell, the first step for NBAD will be design and planning of the change at stakeholder level. That is the engagement of the relevant stakeholders. Secondly, encouraging of participation of the stakeholders to effective communication (Garets, Eastman & Garets, 2010 p.16-20). Thirdly, conducting a pilot study in organizations that have used such approaches to success for NBAD to determine the feasibility of the change. The fourth step will be the introduction of change elements whether be it technology, structural or human resource changes (Garets, Eastman & Garets, 2010 p.16-20). Lastly, the management will have to keep track of the success rate of the change and raise a red flag should failure be detected.
Strategies to Overcome Resistance to Change in NBAD
Resistance is an obvious thing when it comes to discussions on change. The management is therefore bound to ensure that there are enough motivation and adequate preparation for the forthcoming change. Resistance is just lack of alignment to the processes or strategies for the expected change (Kamel, 2012 p. 4). There are different dimensions that resistance in organizations takes including cognition and emotional perspectives. It is worth noting that resistance can either be active or passive (Kotter and Schlesinger, 2008). Active resistance is portrayed through blame games, sabotage, and endless ridicule to the strategies (Lunenburg, 2010 p.5). On the other hand, passive change displays itself through the failure of attempting, procrastination and not instituting proactive actions (Lunenburg, 2010 p.5). The managers are essential in the process of overcoming change. The management should, therefore, engage different stakeholders such as employees, the executive, and the customers among others, to ensure that there is an organizational commitment (Kamel, 2012 p. 4; Kotter, 2007). The second strategy that proves beneficial in the management of resistance is offering the necessary support to the strategies through training and educational strategies (Lunenburg, 2010 p.9; Kotter and Schlesinger, 2008).
According to Lunenburg (2010 p.7-8), communication is the chief enabler of change in the organization. Therefore, to keep resistance at bay, an organization must be willing to employ various communication techniques that address the needs of the employees, the investors, and other stakeholders (Smillie and Hailey, 2010 108). Communication breaks the gaps that create uncertainty and cynicism that are vital ingredients of resistance (Kamel, 2012 p. 9). The managers who are agents of change in the organization should embrace the commitment and participation of the employees who stand as a link between status quo of the business and its state after the change (Harvey and Broyles, 2010).
Resistance in the organization is better fought when there is credibility within the organization from the strategies to the visions and to the organizational structure itself (Kamel, 2012 p. 1). For that matter, the management must use credible opinion leaders to spread the message about the intended change so as to win the logical and emotional appeals of the members of the organization. The change should also be rolled out promptly such that other operations of the organization are not affected by the strategies used for the institution of change in an organization (Kamel, 2012 p. 3).
The management of NBAD should also ensure that there is room for negotiation where either of the parties involved in the strategic change process is given time to give their opinions over the proposed change strategies (Smillie and Hailey, 2010 p.109). Furthermore, where the tactics are too expensive or require much effort, motivation and cooperation must be evoked to institute successfully the change (Harvey and Broyles, 2010). Last but not least, an organization must ensure that there is both implicit and explicit coercion especially where the resistance is recurrent. Harvey and Broyles (2010) argue that compulsion helps the management and the whole organization to restore compliance with the proposed changes. However, too much coercion has undesirable effects that might hamper the change process altogether. With all these actions in place, the proposed organizational change will be successful in NBAD.
Conclusions and Recommendations
The best way to ensure that the change is effective is through communication. Communication is a tool that mitigates any form of resistance in an organization. The potential key drivers for change in NBAD is the need to expand, the current state of the financial services industry that is experiencing volatility, technological advancements, and globalization. Resistance to change affects the extent to which an organization becomes successful. However, different strategies can be used to overcome resistance to change in the workplace. There are a few recommendations for consideration by the management of NBAD. First off, there is a need for change in the organization to meet its sustainable objectives. Secondly, being that the organization is already stable Lewin’s strategy combined with Kotter’s management process (earlier described) can be coupled for success in instituting change. Thirdly, when sourcing for change stakeholders should be engaged in the decision-making process through organized communication. Fourth, the employees and the management should be rewarded after the change succeeds in the organization. Last but not least, NBAD needs to explore technologically, human resource and structurally based changes owing to the diversity of the markets that it expects to expand into within the global business landscape.
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