Change Management in Muscat Bank: Strategies, Challenges & Solutions

This report provides an in-depth analysis of change management practices within Muscat Bank, focusing on the types of changes implemented, reasons driving organizational change, and employee reactions to these changes. It explores both positive and negative psychological implications of employee reactions and discusses the significance of effective change management. The report also examines Muscat Bank's experience with change implementation, highlighting challenges faced and offering recommendations for future improvements. It covers managerialist and change agent approaches, emphasizing the importance of communication, education, participation, support, and leadership in fostering a culture of continuous improvement. The analysis incorporates relevant literature on change management theories and practices, providing a comprehensive understanding of the subject within the context of a specific organizational setting.

Running Head: CHANGE MANAGEMENT IN MUSCAT BANK
Change Management in Bank Muscat
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CHANGE MANAGEMENT IN MUSCAT BANK
Table of Contents
1. Introduction............................................................................................................................2
2. Literature Review...................................................................................................................2
2.1. Types of Change Management........................................................................................2
2.2. Employee Tendencies to Resist Change.........................................................................4
2.3. Implications of positive and Negative Employee Reactions...........................................5
2.4. Significance of Change Management.............................................................................6
2.5 Stages in change management.........................................................................................9
3.1. Brief Introduction about Muscat Bank..........................................................10
3.2. Experience of Muscat Bank in Change Implementation........................10
3.3. Problems Faced by Muscat Bank in Change Management
Implementation..........................................................................................................12
3.4. Recommendations for Muscat Bank for Better Change
Management Handling in Future.....................................................................12
Conclusion................................................................................................................................13
References................................................................................................................................14

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1. Introduction
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.
2. Literature Review
2.1. Types of Change Management
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

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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.
Reasons driving organization to do Change 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

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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.
2.2. Employee Tendencies to Resist Change
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

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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.
2.3. Implications of positive and Negative Employee Reactions
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

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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.
2.4. Significance of Change Management
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.
A. Managerialist Approach: Considering the approach of all the seniors of the
company, the management decides a particular strategy in order to conduct change

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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

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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.
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.
B. Change Agent:
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

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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.
2.5 Stages in change management
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.

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 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.
3.1. Brief Introduction about Muscat Bank
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
30th 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).
3.2. Experience of Muscat Bank in Change Implementation
Reasons for change:
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

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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.
Implementing change:
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.
Impact of change in employees:
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