Professional Documents
Culture Documents
Productivity
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Contents
1. Introduction .........................................................................................................3
2. Literature review ................................................................................................4
2.1. Organizational change ..........................................................................................4
2.1.1. Definition of the Organizational Change .............................................................4
2.2. Reasons for Organizational Change .......................................................................6
2.2.1. Internal forces and external forces ......................................................................7
2.3. Factors are affecting organization change ..................................................................9
2.3.1. Employee Commitment and Organizational Change .................................................9
2.3.2. Organizational Culture and Organizational Change ..................................................9
2.3.3. Leadership Style and Organizational Change ......................................................... 10
2.4. Principles of the organization change ...................................................................... 11
2.5. Resistance to change ............................................................................................. 12
2.5. Impact of the Organizational Change on the Employees Performance ......................... 12
2.6. Conclusion .......................................................................................................... 13
3. Explanatory Research .............................................................................................. 13
3.1. Introduction about Explanatory Research ................................................................ 13
3.2. Benefits of Exploratory Research ........................................................................... 15
3.3. Exploratory Research Conducted in this Study ......................................................... 15
3.3.1. Sample Characteristics ....................................................................................... 15
3.3.2. Data Collection Tools used ................................................................................. 15
3.3.2.1. Focus group .................................................................................................... 15
3.3.2.2. Interview ........................................................................................................ 15
3.3.2.3. Observation .................................................................................................... 16
4. Research Problem ................................................................................................... 16
5. Research Questions ................................................................................................. 16
6. Research objectives ............................................................................................... 17
7. References ............................................................................................................. 18
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1. Introduction
The world is living an era of globalization, high technology, and an economic shift; an
era of constant and rapid change. It is the information age which involves a dramatic
shift in the methods by which political and social power are organized and used today.
Changing economic conditions have combined with technological developments to
make the international dimensions of public and private administration and their
workforce, more important than ever. Understanding the activities of political and
administrative officials in other countries is important not only for those who will
spend part of their careers outside their home country, but also for those who will
work at home. Multi-national companies, specifically speaking, must be experts in
international business and cultural diverse workforce to be able to cope and deal with
different cultures, ideas, and principles. This is the only right path to prosperity and
success in our ever changing world. Globalization demolished the geographical
boundaries among nations and organizations, and this is a real challenge for those
who work overseas. In relation to this important aspect of rapid change, the
researchers chose to tackle an important topic, which is “the impact of organizational
change on employees productivity”. They decided to explore primary and secondary
data in order to come up with findings and answers to the research questions and
trying to study the hypotheses to end up with research conclusions and
recommendations.
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2. Literature review
The process of change is gradual, sequential and planned, it should not have drastic or
unexpected turns, since it is a continuous, controlled evolution; It is a long-term
process, this does not mean that there are no radical structural changes, if any, but
planned, agreed upon by the management and accepted by every member in the
company, involving all its members and others, convinced of their urgency and
benefit. To achieve the goal of organization change is to improve the current position
or to face future challenge, company should prepare itself to any challenges.
Change is an accepted and normal pattern in today's society, although its effects may
or may not be recognized or experienced immediately. However, it can be said that
the change of the nature that affects each individual either directly or indirectly.
Basically our patterns of change and responses to it (if they exist) are influenced by
our individual, group and organizational and collective culture that develop during our
life and personal and professional development. The change involves evaluating the
present and determining a future that is relevant and satisfies the present objectives, so
it can be said that it implies a vision, since if an organization does not establish a
vision would go without a fixed course , Would be drifting and that could lead to the
non-survival of it. Every change is dynamic, it is not static, it is necessary to establish
a change management that takes a planning of strategies motivated by diverse factors
what guarantees a positive result in agreement with the established objectives for the
organization, group or individual that faces The requirements of change.
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Some socholars defined organization change as normal result of rapidly change in the
environment of the businesses. Iqbal1 (2011) defined organization change as the
process which changes either the composition or purpose of business. According to
Carnall (1986) he refers to organization change as an ordinary thing for the
organizations to continuous experience modifications in the way businesses do its
work. also Herscovitch and Meyer (2002) argues that the organization change is
either internal or external factors enforce the organizations to make changes that are
necessary for survival or involve the venture to act in order to remain industrious and
competitive in its market. (Iqbal, 2011).
Some researcher defined organization change from different view such as Khosa,
Rehman, Asad, Bilal, & Niaz (2015)3 they viewed organizational change as change
includes Mission changes, Strategic changes, Operational changes (including
structural change),Technological changes, Changing the attitudes and behaviors of
personnel's, Counter resistance from different employees of companies and align them
to strategic directions of the organization. According to Mowat (2012)4 explained The
goals of organizational change are multi faceted however the major one's are
improving the organization mergence, crisis intervention and to overcome day to day
hauling competition.
1
Iqbal, R. (2011). Impact of Organizational Change to Achieve Competitive Edge. European Journal of
Business and Management, 87-96.
2
Lunenburg, F. (2010). Forces for and Resistance to Organizational Change. NATIONAL
FORUM OF EDUCATIONAL ADMINISTRATION AND SUPERVISION JOURNAL, 1-11.
3
Khosa, Z. A., Rehman, U. Z., Asad, A., Bilal, M. A., & Niaz, H. (2015). The Impact of Organizational
Change on the Employee’s Performance in the Banking Sector of Pakistan. Journal of Business and
Management, 54-61.
4
Mowat, J. (2012 ). Managing Organizational Change. The Herridge Group.
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The planned organizational change is a conscious, deliberate and collaborative effort
to improve the functioning of the organizational system through the application of
scientific and technological knowledge.
According to Chruden and Sherman (1999) point out that there are four reasons for
making changes in organizations. 1). Improve the means to meet economic needs, 2).
Increase profitability, 3). Provide jobs to humans and 4). Contribute to the satisfaction
and social welfare of individuals. (Chen, Suen, & Lin, 2013)5
There are theories explains the organizational change According to Chen, Suen, &lin,
(2013) they argues different theories such as teleological theory , based on this theory
organizational change is an attempt to reach an ideal state through a continuous
process of goal setting, vision, structure and strategies. However, life cycle theory
believe that organization change is process of interacting between organization and
external environment through organization's life stages from birth to declination.
Also, dialectical theory believes that organization has varies cultural , change occur
when one force dominates over other.
Many theories discussed the need for change we can classified those theories into two
categories 1) evolutionary theories, refers to that organizational change is gradual ,
interrupted and narrowly focused (George & Jones, 2007), the best explanation of
this theory are socio-technical system theory that concern on the impact of social and
technological aspect in organization, Total quality management theory that concern
on the continual improvements by all members and departments to improve quality.
Management by objectives theory that concern on importance of meetings between
managers and employees to measure the outcomes and correct deviations .
5
Chen, J. M., Suen, M. W., & Lin, M. J. (2013). Organizational Change and Development.
T&D.
6
According to experts in the subject of change the trends that organizations must keep
in mind to correctly guide the necessary changes in the company are considered the
following:
- As the first macro trend is the information and communication technologies. This
marks the transition from an industrial society to a technological information society,
such as computers, the internet, intranet and all the advances in communications. It
can be said that it is related to the speed of the changes in the society and of that it
depends the speed of the information.
- The worldwide trend towards the implementation of the small office, home office,
mobile office that entails the management of remote data banks shortening the need to
be physically in the event or situation that implies immediate results.
- The global trend of a national economy to a world economy, where the decisions
that can take one person or state will have repercussions in the others.
Like any interaction there are forces either in imposed or voluntary change, which are
derived from within and outside the organization.
A SWOT analysis can prescribe some of the forces exerted by this form of pressure
such as: organizations that are continually merging, growing or decreasing their
positions in the market through the modification of their products, changes in their
location, reacting to Legal changes and political pressure, reacting to technological
developments and changes in the workplace through increased demands to manage a
multicultural workforce. (Yonnedi, 2010)6
6
Yonnedi, E. (2010). Privatization, organizational change and performance: evidence from
Indonesia. Journal of Organizational Change Management, 537 - 563.
6
Many of these aspects exert an increasing pressure by the increase of the restrictions
of the time as it can be to take a product to the market, the time of formation or
training of the human factor to operate with a new technology, the time to react to the
changes in a market structure as well as other forces such as the reduction of distances
of foreign markets (considering the time of transport and communication through
telecommunications) and the reduction of barriers allowing the increase of
competitiveness. (Mowat, 2012 )
The existence of these forces or internal or external pressures can determine the
causes of change. The internal forces of change can come from any of the internal
audiences of an organization. These include customers and their reactions to the
products and services provided (which is why continuous market research and
marketing information is necessary), human factor and suppliers. These forces could
also include managers or marketing consultants committed to the purpose of
developing management improvement strategies, SWOT analysis mentioned above
that is very useful for these cases.
The external forces of change come from any external agent that includes politicians,
lobbies, courts, competitors of either products or services, benchmarking and how
competitors treat suppliers and their staff.
It can be said that regardless of the forces, the internal ones represent a greater
importance for the change since the external forces do not all have application or
meaning unless they are assimilated in the organization. Such forces will only
provoke a reaction if the direction or one of the internal public tries to implement a
change in the established state.
Due to the above, organizations should be recycled and updated day by day and not
let time pass without renewing, without changing their habits, structure and processes,
because in a very short time they would be obsolete and would be overtaken by
change and modernity.
According to Tayles and Drury,(1994) points out that there are some forces that
could be considered as detonators of organizational change, such as: 1) technological
change, 2) international economic integration, 3) the maturation of markets in
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developed countries, and 4) the fall of socialist and communist regimes; These forces
cause changes to occur through competition and globalized markets and that in some
way represent threats to organizations, but also opportunities that, if prepared, could
be exploited. (Johnson, Cassell, Close, & Duberely, 2001)
However, the surprising variety of pressures for change faced by organizations are
considered to be three of the most important: (1) the globalization of markets, (2) the
diffusion of information technology and computer networks And 3) changes in the
nature of the workforce employed. Therefore, the general attitude of the
administration, is to be attentive to detect the moment when any of these conditions,
or what would be better, to prevent them or anticipate their arrival.
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Iqbal, R. (2011). Impact of Organizational Change to Achieve Competitive Edge. European Journal of
Business and Management, 87-96.
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performance in the organization. Earlier studies showed that culture of organization
influences employees and organization itself that in turn influences change. In today’s
more competitive environment it is necessary for the organization to develop
favorable organizational culture that increases job performance that help to reduce
resistance when organization is going to change its strategies or way of doing things
at workplace. (Khan & Hashim, 2014)8
Norms and values of the organization are not always consistent or fixed. It changes
with the passage of time that’s why it look sensible or realistic to imagine all cultural
system that demonstrate constant, and increasing modifications in the organization..
Changes in the organization are affected by the norms and values of the employees
that are embedded at the workplace. Sathe and Davidson (2000) said that alterations
in organizational culture also modify the mentality of people to do work and it also
changes the attitudes of employees towards implementing change. (Khan & Hashim,
2014).
the transformational leadership would be more in agreement with this new perspective
of the change, since one of Its fundamental characteristics is to promote the
development of competencies in the organization, in which each contributes to
organizational change (Seidman & Mc Cauley, 2011)9.
8
Khan, M. A., & Hashim, M. (2014). Organizational Change: Case Study of General. University of
Bridgeport.
9
Seidman, W., & Mc Cauley, M. (2011). Transformational Leadership in a Transactional World.
Organization Development Practitioner
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While transformational leaders have the ability to change the perspective of their
collaborators, motivate and inspire, transactional leaders reward subordinates for
complying with the directions given , the latter, more in line with the traditional view
of change. It should be noted that transactional and transformational leadership
behaviors are not mutually exclusive, in fact they can occur simultaneously in
managerial practices without affecting a distinctive leadership style. change (Seidman
& Mc Cauley, 2011)
The role of the transactional leader would be more in line with traditional models of
planned change, in which leaders plan and generate strategies to ensure compliance
with the processes that will lead to the desired outcome. For this, an instructional and
managerial style can be more functional.
2. Never throw yourself into an action program until you make a diagnosis of the
situation and an estimate of the strength and weakness of the existing structure.
3. The diagnosis must be made in collaboration with the client system and the ability
to diagnose must be transmitted to the client.
4. The client system must learn to see for itself the problem, participate in the
elaboration of the diagnosis and be actively engaged in the search for solutions.
6. The change does not have to be accidental. A change, carefully planned and
considering the need for people to be involved in it, does not mean that it has to
disrupt an organization.
10
Rafferty, A., & Griffin, M. (2006). Perceptions of Organizational Change: A Stress and Coping
Perspective. Journal of Applied Psychology, 91(5), 1154–1162.
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2.5. Resistance to change
According to Khan & Hashim, (2014) they argues that any individual involved in the
process of change in the organization belonging to an area or department must be
informed of what is intended to be done, understand why it is done, what involvement
will have all of this and above all be able to participate in it. It is worth mentioning
the contributions made by Eliyahu Goldratt who mentions five behaviors of resistance
to change:
1. Existence of the need for security and stability that allow it to develop other
skills.
2. be unique, taste important feelings and be recognized.
3. Develop as individuals and professionals.
4. Need to share, interact with others not feel alone
5. Disgust to boredom, but taste to the variety surprise and challenge
6. Deeply saddened to see that what he does not contribute at all, emotional need
to see that what is done at work contributes to the good of the organization
Reducing resistance to change involves managing at least four forms of resistance that
can be:
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employee's performance will help the organization to discover and improve
employee;s performance.
2.6. Conclusion
When planning the organizational change, members often take the change activity too
seriously, but neglect the change goal itself. Thus, members participate in the activity
vigorously, but the achievement is actually very limited. Poor management in change
process is another commonly made mistake. Many factors have to be considered and
attended to in the unfreezing, moving or freezing stages. Overlook certain factors
many lead to total failure of the organizational change. the match between change
plan and organizational context may also play a significant role in the success or
failure of organizational change.
3. Explanatory Research
The purpose of exploratory research is, as the name implies, to examine or explore a
research topic or problem that has not been studied or has not been addressed before.
Therefore, it serves to familiarize itself with relatively unknown, little studied or
novel phenomena, allowing to identify promising concepts or variables, and even to
identify potential relationships between them.
allows to know and expand knowledge about a phenomenon to better specify the
problem to be investigated. It may or may not start from previous hypotheses, but the
scientist here demands flexibility, that is, not be biased in the selection of information.
Exploratory research studies which variables or factors could be related to the
phenomenon in question
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Exploratory Investigation will be the first phase that a researcher accomplishes, about
an object of study that is unknown to him, or even also for the rest of the professional
community of the field in which the investigation is carried out. That may guide the
research undertaken.
In this way, some professionals describe the Exploratory Investigation as the first
approximation that a researcher makes about his object of study, in order to be able to
grasp with general information about its appearance, behavior and characteristics, for
which this type of research is cataloged also as an approximate study, because it is
based on the observations and approximate calculations that the researcher can
establish in his first contact with what he intends to establish an investigation.
1. Identification of the problem: in the case of phenomena or objects that have not
been previously studied, an Exploratory Investigation can provide researchers with
sufficient information that will lead them to identify the characteristics and angles
from which more research can be undertaken Exhaustive, which - thanks to the
Exploratory Investigation will have more questions, from where to start looking for
the appropriate answers. Likewise, the nature of these questions will provide
researchers with knowledge and guidelines on the initial methods that should be put
into practice in order to expand the knowledge obtained on the basis of Exploratory
Research.
3. Other stages of research: Finally, researchers and specialists have pointed out that
every Exploratory Research process originates or gives rise to the second phase,
known as Descriptive Research, in which, with a little more method, the researcher
will enter Take note of the main characteristics of the object of study.
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3.2. Benefits of Exploratory Research
Exploratory research Increases the understanding of the topic by improving the
knowledge of the research about the different aspects of the topic, concept testing by
checking the topic notions and their ability to be performed, it plays the role of
assistant to the researcher to assess the potential causes of the topic or the problem
which the researcher is investigating, other exploratory research pros is flexibility in
reaching data sources it use secondary data for instance published research, in
addition to better conclusion it can achieve deep understating of the topic which will
lead to more advanced research question then better findings.
3.3.2.2. Interview
The importance of the interviews that can easily to choose the right demographic
factors such as gender and age , interviews characteristic by unstructured and
questions are open ended to know the respondents thought .
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3.3.2.3. Observation
Observations will be made to investigate subjects and measure variables of interest.
However, unlike experiments, the researcher is not able to control the environment
subjects are exposed to. The researcher only records what he intends to study among
the subjects.
4. Research Problem
The changing political, economic conditions are affecting the mission, structure, and
workforce of multi-national organizations. Challenges face managers and employees
in multi-nationals who must play new and important roles in economic development,
including international economic development, which may require them to know as
much about business decisions in a foreign country as in their own one. Also
challenges face those working in the human resource departments, who have found
themselves dealing with a highly diverse workforce descending from different
cultures all over the world. They have to articulate and develop successful policies
and strategies to be able to bring together this diverse group of employees and
workers in a way that helps to attain company’s goals and objectives effectively and
efficiently. Never-the-less, managers in all company’s divisions and departments have
to deal with the rapid change and the resistance to this change which often happens
now-a-days and its impact on performance and productivity. Researchers decided to
study one of the international banks in Egypt in order to find about this problem there
and see how do managers and decision makers deal with it.
5. Research Questions
This study aims to answer the following questions:
1. What is the meaning of “organizational change”? And what are the driving forces
behind this change?
2. What is the relationship between the rapid global change (macro level) and the
organizational change (micro level)?
3. How does the organizational change affect the workforce?
4. What are the common strategies and policies the multi-nationals embrace to deal
with the organizational change?
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5. How does the international company handle the change? And how does
Caterpillar company specifically speaking deal with the change and its impact on
its workforce?
6. Research objectives
1. Defining the organizational change and what are the driving forces behind it
2. Identify the relationship between the rapid global change (macro level) and the
organizational change (micro level)?
3. Finding out how does the organizational change affect the workforce
4. Articulating the common strategies and policies the multi-nationals embrace to
deal with the organizational change
5. Identifying how the international company is handling the change, and how
does Caterpillar company specifically speaking deal with the change and its
impact on its workforce
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7. References
Bloodgood, J., & Jr, M. (2003). Strategic Organizational Change: Exploring the Roles of
Environmental Structure, Internal Conscious Awareness and Knowledge. Journal of
Management Studies , 1761-782.
Chen, J. M., Suen, M. W., & Lin, M. J. (2013). Organizational Change and Development. T&D.
Khan, M. A., & Hashim, M. (2014). Organizational Change: Case Study of General. University
of Bridgeport.
Khosa, Z. A., Rehman, U. Z., Asad, A., Bilal, M. A., & Niaz, H. (2015). The Impact of
Organizational Change on the Employee’s Performance in the Banking Sector of
Pakistan. Journal of Business and Management, 54-61.
Rafferty, A., & Griffin, M. (2006). Perceptions of Organizational Change: A Stress and Coping
Perspective. Journal of Applied Psychology, 91(5), 1154–1162.
Appelbaum, S., St-Pierre, N., & Glavas, W. (1998). Strategic organizational change: the role of
leadership, learning, motivation and productivity. management decision , 289 - 301.
Chen, J. M., Suen, M. W., & Lin, M. J. (2013). Organizational Change and Development. T&D.
Johnson, P., Cassell, C., Close, P., & Duberely, J. (2001). performance evaluation and control:
supporting organizational change. Management Decision, 841 - 851.
Sjoerd Beugelsdijk, A. S. (2002). Shapes of organizational change: the case of Heineken Inc.
Journal of Organizational Change Management, 311 - 326.
Smith, I. (2011). Organisational quality and organisational change. Library Management, 111
- 128.
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Yonnedi, E. (2010). Privatization, organizational change and performance: evidence from
Indonesia. Journal of Organizational Change Management, 537 - 563.