Analysis of Organizational Change Management at Muscat Finance Company

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Running head: ORGANIZATIONAL CHANGE MANAGEMENT
Organizational Change Management
Name of the Student
Name of the University
Author Note
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Executive Summary
The process of change management is one that is known to be quite harsh and complex
and the manner by which it is implemented has an influence on how effective it is. This
assignment discusses the change management policy of attrition implemented by Muscat Finance
Company for creating competitive advantage. The report analyzes the competitive strength and
background of the company before proceeding to analyze why the change management is being
introduced, how it is going to shape and the precautions and measures that have to be taken by
the HR management of the organization for the adequate implementation of the same.
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2ORGANIZATIONAL CHANGE MANAGEMENT
Table of Contents
1. Introduction..............................................................................................................................2
2. About the Muscat Finance Company.......................................................................................3
3. Competitor Analysis – Muscat Finance Company...................................................................5
4. Organizational Structure and Culture.......................................................................................7
Change Management at Muscat Finance Company......................................................................11
5. Reflection...............................................................................................................................15
6. Recommendations..................................................................................................................16
References......................................................................................................................................20
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3ORGANIZATIONAL CHANGE MANAGEMENT
1. Introduction
Organizational change refers to a change that is brought about in the processes, the
strategies, the technologies and the operations of a given organization. Organizational change is
implemented more often than not with the help and the assistance of the HR division of the
organization, a process that is also referred to as change management. It is the HR executives and
managers who take on the arduous job of explaining to employees the process of change, the
reason why the change is taking place and the benefits and the advantages that are likely
associated with the change process. Organizational change management has far reaching
consequences, and more often than not, a well formulated policy or plan is drafted with the
purpose of implementing the proposed change by the higher authorities in the organization. One
of the greatest difficulties that are associated with organizational change is to get employees to
accept the change that is taking place. It is quite normal for employees to resist the change
process, and to fight the given situation by either resigning from the organization or by
demonstrating a decline in the area of productivity. It is therefore a challenge for the HR
management of an organization to get the workforce in the organization to embrace the change,
so that the far reaching consequences of the change are well received and the purpose for which
the change is introduced in the first place, is achieved. This assignment engages in an analysis of
the change management procedure that is implemented by the HR department at an organization
in the Sultanate of Oman known as the Muscat Finance Company. The change that is introduced
and which will be analyzed in detail in this assignment is attrition or cost cutting, with several
employees of the company being laid off and new smaller workforce being created for the
purpose of establishing competitive advantage. In the process of analyzing the change, the
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external environment in which the company operates is studied using the framework of Porter’s
5 Forces, the actual change management introduced is studied using the Mckinsey’s 7S
framework and the impact that the change has on the staff of the organization is something that is
studied in a considerable amount of detail as well. The report concludes with a reflection section
on how and why the change management was successful and also provides a list of
recommendations that can be taken into consideration by the company in order to get the
employees to adapt better to the change initiative so as to be able to perform better and with a
greater degree of productivity at the workplace.
2. About the Muscat Finance Company
The Muscat Finance Company is a leading organization in the city of Muscat in Oman
that has acquired name and fame in the way by which it provides financial solutions to top notch
clients living in the city. The Muscat Finance Company has been in existence for quite some
time now and is serviced by an elaborate organizational structure that is made up of a higher
management, a lower management and an extensive workforce. Apart from operating from one
main center, the company has a number of branch locations as well and it functions with the
efficiency and the proficiency that one would normally expect from a finance company. Muscat
Finance Company is one that believes in the rendition of quality financial solutions for its
customers and as such is not seen to compromise on the manner by which it takes up and delivers
assignments for its clients. Assignments are delivered in a timely and accurate manner, and the
organization leaves no stone unturned to make sure of the fact that its clients are content and
satisfied with the work that is performed by the organization. A key strength of the organization
lies in the fact that it provides timely solution for customers and there is also a variety of
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financial services that customers can make a choice from when signing up for the services that
are offered by the organization. In spite of the efficiency and the competitiveness with which the
organization runs its operations, the intense competition that it is faced with in the financial
industry in Oman is compelling the organization for ways and means by which it can cut down
upon its resources and maximize the advantages that are being offered by whatever investment
that it is making. One area where the company has decided to downsize in the recent past is on
the size of the workforce. As mentioned above, the company is serviced by an employee base
that is quite exhaustive and which is made up of a vast number of managers, line managers and
employees or regular workers who run the day to day operations of the company. The company
believes that by downsizing its workforce, it will be able to retain talent better, while also
reducing its investment in the area of human resource. With fewer but gifted employees, the
organization will be able to race ahead and compete successfully with its rivals in the industry
which is the unfortunate incident of attrition needs to take place.
The Muscat Finance Company is by and large quite a thriving company and it has made a
name for itself for the provision of highly specialized financial services such as debt recovery,
the liquidation of assets, leasing of capital, working finance and various other types of financial
activities. The company aims on becoming one of the leading names in Muscat in the area of
financial solutions in the upcoming five to ten years and is willing to take recourse to whatever
step or method is needed for the purpose of maximizing productivity. The fact that the profit or
financial turnaround is not as high as it should be is something that has compelled the company
to opt for attrition or workforce in order to make up for some of the financial losses that it is
currently faced with. The competitor analysis of the Muscat Finance Company will be carried
out in more details below.
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3. Competitor Analysis – Muscat Finance Company
The competitor analysis of the Muscat Finance Company is something that will be carried
out using the framework of Porter’s 5 Five Forces.
Competitive Rivalry – Muscat Finance Company in Oman is an organization that provides top
quality financial solutions such as debt recovery assistance, the leasing of property and vehicles
and the complex task of asset management. Yet these are services that are also made available by
other financial organizations that operate in Muscat and which also have the capability, the skill
and the manpower that is needed to deliver quality timely solutions in a timely manner. Muscat
Finance Company is definitely not the only organization in Oman that offers the type of services
that it does, and there are many other rival organizations that are seen to offer the same. Hence
competitive rivalry for an organization like the Muscat Finance Company is quite high.
Bargaining Power of Suppliers – The Muscat Finance Company in Oman is one that is
serviced by an elaborate network of suppliers and distributors. This is because of the fact that
there are many organizations in Muscat in Oman which offer or specialize in the same or related
services. The availability of suppliers and distributors is something that can always be counted
upon, and the bargaining power of suppliers may be considered to be low for Muscat Finance
Company.
Bargaining Power of Customers – The bargaining power of customers on the other hand is
high for an organization like the Muscat Finance Company. This is because customers can
choose from a diverse range of options or companies when it comes to the services that are
offered by the Muscat Finance Company. There are numerous other companies in the city that
offer related services and that too at cost effective rates. Hence customers do not have to restrict
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themselves to only using what is offered by the Muscat Finance Company in the event that they
require immediate, urgent and long term financial solutions.
Threat of New Entry – The threat of new entry is quite significant for a company such as the
Muscat Finance Company and this is because of the large scale demand for financial services,
not only in Muscat but in the country of Oman as a whole. There is every possibility of a new
enterprise making its presence felt in the city, which offers financial services which are similar to
those offered by the Muscat Finance Company and which may also be provided at rates that are
more affordable than what is offered by the Muscat Finance Company. The threat of new entry is
high for the Muscat Finance Company.
Threat of Substitution – Every effort needs to be made on the part of the Muscat Finance
Company to make sure of the fact that it the services that it offers in the financial market of
Muscat are uniquely positioned. In the event that it fails to do so, there is every possibility of
such services being substituted and improvised upon by other rival organizations operating in the
city, leading the company to fall out in the area of competition. The threat of substitution is high
for Muscat Finance Company.
The above competitor analysis of the Muscat Finance Company using the framework of
Porter’s 5 Forces goes to show that although the Muscat Finance Company is a thriving business
organization in the city of Muscat in Oman, there is plenty of competition that the company is
faced with and the company needs to keep its services quite uniquely positioned so as to be able
to offer its customers something that is of a novel nature. Hence the policy of attrition which is
going to be discussed in detail in the following sections is a step that the company is taking
recourse to in order to remove its liabilities once and for all and create the type of competitive
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advantage that will work in favor of the company in the long run. The competition for the
Muscat Finance Organization in Oman is real, it’s strong and it’s powerful and there are quite a
few steps that need to be taken by the organization in order to ensure that it stays ahead in the
game. One of these is unfortunately to downsize the workforce and introduce a change in this
respect in the organization’s structure, a task that will be handled by the HR management of the
organization.
4. Organizational Structure and Culture
When it comes to understanding the culture and the structure of the organization that
prevails at the Muscat Finance Company, it is important to remember, first and foremost that this
is an organization which believes in a flexible work culture. One of the reasons why the Muscat
Finance Company has until date been able to recruit candidates in large numbers is because of
the fact that it has managed to create a positive work culture here. The work culture in the
organization is employee friendly for the most part, with each and every member of the
workforce being made to feel welcome when they join and even afterwards. A huge benefit for
any employee who has been working at the Muscat Finance Company until now is that they are
respected for their inner value and their ability to contribute effectively to the goals and
objectives of the organization. This is not an organization that believes in discriminating against
people on the basis of skin color or on the basis of religion as a consequence of which people
find it quite desirable to work over here. The employee base at the Muscat Finance Organization
is one that is made up of people of diverse ethnic and economic backgrounds. Immigrant
populations form a significant part of the workforce in this organization and the level of religious
tolerance that is practiced by the organization towards its employees is noteworthy. There is no
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discrimination that is undertaken in the organization on grounds of religion and employees are
made to feel comfortable in their skin color. They are made to feel valued and part of the
organization and are always encouraged by the leadership of the organization to do their best.
Muscat Finance Company is one that believes in motivating its employees to the fullest and this
is very important given that motivation is one of the key factors that can influence an employee
to stay on in an organization and work for the organization over the long term. The culture of the
organization is aimed at equity and diversity. People of all cultures and ethnic backgrounds are
recruited into the organization and once they are selected and enrolled they are motivated to do
their very best. The leaders and the managers at the Muscat Finance Organization or Company
are quite inspirational in their speech and know exactly what it is that is to be said to the
employees of the organization, in order to lift their spirits and get them to perform to potential.
Employees are motivated right from the time that they join the organization till the time they
decide to leave the organization.
Employee welfare is a matter that is looked into by the Muscat Finance Organization and
every effort is made on the part of the human resource management of this organization to make
employees feel included and desired by the firm. This feeling of being wanted or the feeling of
being secure at the organization in general is not something that is cultivated only through
motivational speeches and good leadership abilities but also through the provision of a decent
remuneration along with financial incentives, with the latter being offered for any additional
work that is taken up by employees for the benefit of the organization. Employee welfare is
assured by the HR department of the organization through the timely disbursement of salaries
and the provision of financial incentives every single month. Employees at the organization do
not have to wait indefinitely in order for their salaries to arrive and they can also be assured of
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getting paid extra or being paid a bonus in the event that they try to do a lot more for the
organization than what has been dictated in the terms and conditions of the contract that they
signed at the time of their recruitment. As a result employees get to feel very financially secure
when they work for the Muscat Finance Company. They never have to worry about monetary
matters as this is an aspect that is well taken care of on the part of the organization, and as a
result they have all the motive in the world that is needed in order to be able to perform suitably
well for the organization. The Muscat Finance Company is indeed one of the largest service
providers in Oman and it takes every step in the book to ensure that its employees are well
looked after.
The culture and the organization that prevails at the Muscat Finance Company is one that
is designed to ensure employee wellbeing in every sense of the term. Not only is the work culture
of the organization quite an inclusive one, but the financial running of the organization is proper
too, with employees never having to worry about remuneration and other issues when they work
for this company. Employees who are not able to perform to potential or are unable to grasp the
key aspects of what it is that is demanded of their job profiles are sent to what may be termed as
a performance improvement program. This program is conducted for employees who are not
performing sufficiently well and who could do with some additional care and guidance. There is
no aggressive policy of termination that is followed by the Muscat Finance Company and
employees are released from the payroll of the organization only after they have been provided
with repeated attempts and chances to improve their performance.
In addition to the timely disbursement of salaries and the provision of financial incentives
the employees of the organization are also appraised on a half yearly and yearly basis based on
how well it is that they have performed throughout the entire length of the year. The appraisal
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amount is usually quite decent to say the least. The leave policy of the organization is one that is
quite flexible as well and employees can take a leave up to two to three times in a month while
maternity leave is also something that is sanctioned for the female employees who are working at
the organization. They are paid for the period of time that they remain on maternity leave and do
not have to worry about losing out on their salary for this length of time. It is thus clear that the
Muscat Finance Organization is one that provides its employees with several benefits that in turn
induce them to stay on and work for the organization over the long term rather than thinking only
short term with this firm. It is an organization that realizes that it can run best only with the aid
and the assistance of its employees which is why till date the organization has taken all the steps
that are needed to ensure the comfort and the wellbeing of its employees.
In the recent past however, as made evident through the competitor analysis that was
carried out in the previous section, the number of rivals and competitors of the company have
increased. This is especially the case because Muscat Finance Company does not provide
financial solutions that are unique in their nature and scope and there are other related
organizations in Muscat and other parts of Oman that offer similar services at better prices. The
company is thus faced with the urgent need of establishing competitive advantage and it has
decided to do so by following a policy of attrition, whereby the workforce of the organization
will be considerably reduced and the many of the benefits that have been outlined above will be
made available only to a limited number of employees working for the organization. This policy
of attrition shall be introduced as part of a change management process more of which will be
discussed in the next section.
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Change Management at Muscat Finance Company
The change management process at the Muscat Finance Company using the policy of
Attrition is something that is now going to be discussed using the Mckinsey’s 7 Step Model.
Strategy – In order to be able to maintain competitive advantage over its rivals in the industry,
the Muscat Finance Company will downsize its workforce, retaining and allowing only the best
and the brightest to work for the organization. The number of employees who are going to work
for the organization will be reduced from about 300 at present to 200 and this is a change it is
believed will have a positive impact on the organization, given the fact that the organization will
now be according financial and other benefits to a limited number of employees who deserve
such benefits. The company will be saving on its investment in this respect and it will also be
enabling only the most talented of its workforce to serve the organization, thus assuring that the
work done for the clients is of the highest quality.
Structure – The organizational structure that is seen to prevail at the Muscat Finance Company
is not one that is too elaborate in nature. The higher management and the lower management of
the organization are seen to maintain regular contact with one another, with the lower
management being comprised of line managers and the higher management being made up of
directors and senior operational managers. The structure of the organization is also quite
elaborate when it comes to regular employees with as many as 300 employees serving the
organization until date. This organizational structure, that is, the employee base of the
organization is one that is about to undergo a change. The higher management of the
organization will reduce the workforce and many people who are not performing to potential and
who are unable to achieve the goals and the objectives of the organization are going to be laid
off. This is a business decision that will have an undoubtedly harsh impact on the positive and
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dynamic work culture that prevails in the organization but it is a move that is necessary for the
company to be able to establish competitive advantage. The structure of the organization will
henceforth only be limited to senior managers, line managers and the top most workers of the
organization who can demonstrate a record of working exceedingly well for the company all
through the year and who are also seen not to avail too many leaves when performing their duties
and responsibilities, giving the company the impression that it can count on them in its time of
need.
Systems – As of now, the organization follows a routine system of duty and task allocation for
all its employees. The tasks, duties and responsibilities for employees are allocated by the senior
operational managers to the line managers who then in turn proceed to allocate the work to the
employees of the organization. Employees of the organization have to maintain an account of
what they do on a daily basis and this in turn is something that is going to be used as a record by
the organization’s management to determine how many employees of the organization are
actually performing diligently on a day to day basis and how many employees are slacking
behind in terms of performance. When it comes to the matter of attendance and punctuality, the
employees of the organization are subjected to a biometric system that they have to use when
logging in at the time of arrival and also at the time of log out. This biometric system is one that
is going to provide the management of the organization with knowledge about how many
employees make it office on time and how many employees are not turning up on time and are
hence not working well for the organization.
Shared Values – As part of the change management process, the shared values of the
organization will be retained. The members of the workforce who are not laid off and who are
continued to be allowed to work for the organization in spite of the large scale downsizing that
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takes place, are employees who will be expected to perform in keeping with the shared values of
the organization. Such values are namely that the organization aims to be one of the top most
financial service providers in Muscat in particular and in Oman as a whole.
Style – The leadership style that is going to be adopted in order to implement the change
management process is the transformational style of leadership. Every effort is going to be made
on the part of the higher management of the organization to communicate on a one to one basis
with the employees and those who are going to be laid off are going to be provided with a proper
and legitimate reason as to why they are being let go by the organization. Employees who are
retained by the organization will be communicated with on a one to one basis in order for them
to be able to understand why the transition is taking place and how it is that they can best grapple
with all of the changes that are taking place in the organizational set up. The transformational
leadership style will be adopted to give employees the scope to approach the higher management
of the organization to understand why it is that so many changes are taking place and why it is
that there are many people who have been laid off. The transformational leadership style is one
that is going to be adopted in order to help the members of the workforce deal with the changes
better.
Staff – As mentioned above, this is an organization that is currently served by an elaborate staff
that is made up of 300 members but which will later be downsized to include just 200 members
as the company is now quite keep to establish competitive advantage. The staff members of the
organization are going to be reduced and this is a change that is going to have a large scale
impact on all of the employees who are working for the organization. The staff members of the
organization will now be reduced to a certain size so that only the employees that are possessed
with the most potential are the ones who are working for the organization. With a skilled set of
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employees, the organization believes that it can go far and wide, it will attain new heights and it
will be able to take on all of its competitors in the industry with much success. By downsizing
the workforce the company will be able to save on the benefits that it is paying to all of its
employees in the present and it will focus on investing in only those staff members who are
likely to ensure the greatest returns for the organization. This policy of attrition is a change
process that is no doubt going to be quite harshly perceived which is why the transformational
leadership style as discussed above will be adopted to explain and justify the change policy of
the company.
Skills – The Muscat Finance Company is one that is serviced by a set of skilled employees but
not all the members of the workforce are people who are capable of performing to potential for
the organization. Hence the company when implementing its policy of attrition is going to make
sure of the fact that only the best and the brightest are the people who get to serve the company
while the others are laid off. The Muscat Finance Company is going to now focus only on hiring
people who have the skills that are necessary to take the company in a forward direction. It is
going to pay a high salary and financial incentives only to the employees of the organization who
have the talents and the abilities that are needed for fulfilling the goals and objectives of the
company is as limited a time span as possible so that it is successfully able to take over its rivals
and competitors in the market. The Muscat Finance Company is going to change its policy of
employee welfare when implementing its policy of attrition. The welfare is now going to be
extended only to the deserving employees of the organization and not those who have to be
monitored on a regular basis for their work or who have to be subjected to what is termed as a
performance improvement program or plan for their performance at the workplace to be suitably
enhanced. The workforce will now only be limited to talented employees.
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5. Reflection
Upon reflection, what is clearly evident is that with the help of a good leadership the
company that is the Muscat Finance Company is one that is going to be in a position to suitably
implement its change management program. The change policy of attrition is something that the
company needs to put in place immediately in order for it to be able to take on its rivals and
successors in the industry with success. Muscat Finance Company is not the only company in
Oman that provides leading financial solutions for customers of every budget and there are many
other companies in this part of the world that are seen to be doing the same. In order for the
Muscat Finance Company to truly stand out when it comes to the rendition of financial solutions,
it is going to have to introduce some changes following which competitive advantage is
something that can be established by the company. The Muscat Finance Company with the help
of the policy of attrition is going to be able to introduce the type of changes that are needed for
the company to create competitive advantage and this is largely due to the fact that it will be
reducing the workforce only to include employees of the company who are capable of doing
justice to the remuneration that is paid to them. The company has until date maintained quite a
good workplace culture and environment. It has looked into the matter of employee welfare and
it has made sure of the fact that all of the employees of the organization are made to feel
included. It has not compromised on the aspect of employee welfare in any given way and has
made it a point to recruit employees from diverse ethnic and religious backgrounds. However,
the flexibility that the company has provided its employees with is not something that it can
continue any longer as the rivalry and the competition in the financial industry in Oman is quite
immense. There are many competitors and rivals of this company in Oman that are offering
similar or related financial services at cost effective rates. The bargaining power of customers is
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high as is the threat of new entry and the threat of substitution, all of which has been made
evident by the Porter’s 5 Forces Analysis that has been carried out in the first section. The
company now has to look for ways and means by which it can compete effectively in the market
and one of the best ways by which it is going to be able to do so is through the implementation of
a policy of attrition. This attrition is going to be beneficial for the company as it is only going to
retain employees who are likely to work well for the company and who will not be a bane for the
company and act instead as a boon. This harsh policy can only be well implemented as an
instrument of change if the leadership style is of a transformational nature, which is going to be
the case as mentioned in the McKinsey’s 7S Model Analysis.
6. Recommendations
There are a number of effective recommendations that the organization needs to bear in mind if it
wants the change management policy to be adequately bear fruit upon being implemented. These
are as follows –
ï‚· The transformational leadership style that is adopted by the management of the
organization should be one that is executed in a sensitive manner, given that there are
many employees of the company who are going to be laid off. The reputation of a
company is often decided by the manner by which it treats its employees. While the
policy of attrition is something that a company which the Muscat Finance Company is
being compelled to implement, it is going to have to ensure that it adopts a sensitive
approach for doing so. A harsh approach to laying off employees can lead to the sacked
employees spread bad word about the organization on social media. In the event of
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intense competition, negative publicity is not something that a company such as the
Muscat Finance Company can afford and it needs to take care in this respect.
ï‚· The organization needs to make sure that the workforce that it retains for fighting the
competition that it is faced with is a workforce that is made up of the best and brightest in
the company. This it is going to be able to determine only by retaining the employees
who are diligent and punctual, who do their work on time and who have good client
ratings. Employees for whom clients have good words to say are undoubtedly an asset for
the organization and have to be retained in the truest possible sense. The organization has
to evaluate the performance of each and every employee with a good deal of care to
determine who it is in the employee base of the company that is worthy of being retained
and who it is that should be released immediately or let go as part of the policy of
attrition. Care should also be taken on the part of the management of the company to
retain employees who are willing to work on scheduled holidays as these are employees
who are truly dedicated to the organization and must be allowed to work for the
company.
ï‚· The HR management of the company needs to be briefed on the various ways by which it
is to approach the policy of attrition. It is the HR managers of the organization who are
going to have to come up with the information and other records that are needed in order
for the company to determine and evaluate the performance of the employees and to
decide who it is in the company that is worthy of retention and who it is in the company
that ought to be let go off. The HR managers have to be sensitized to the policy of
attrition so that they can approach the employees who are about to be released in as
effective a manner as possible.
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ï‚· A recruitment drive for talented employees is something that the company should avoid if
it wants to lay off employees and retain only the best for its firm. A recruitment drive is
not going to make sense as the company is trying to do away with excess employees who
are a burden on the payroll of the company. The recruitment drive should be undertaken
six to eight months after the policy of attrition has been implemented so that the company
has by then been able to determine whether such a policy is working well for it or not,
and whether it should start recruiting people once again.
ï‚· The policy of attrition should be conveyed to the employees of the organization at the
earliest so that they are not in the dark about the changes that are about to take place in
the organization. By informing employees about this policy well in advance, the
organization is going to give its employees the option to look for jobs elsewhere in the
event that they are not likely to be retained by their company.
ï‚· The communication style that is adopted by the managers of the company and the HR
managers in particular for conveying the essential aspects of the policy of attrition should
be gentle and firm. The company needs to be in a position to explain why it is that it has
decided to adopt a policy of attrition and what are the changes and outcomes that the
company expects from the implementation of such a policy. Those who are being laid off
are to be provided with a just reason as to why they are being released by the
organization.
ï‚· The HR managers of the organization have to ensure that all the paperwork that is
undertaken for releasing the employees who are not going to be retained, is completed on
time. The HR managers have to take special care about the fact that there are no dues
remaining for the organization in this respect and that all those who have been let go by
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20ORGANIZATIONAL CHANGE MANAGEMENT
the company are people who have had all their dues cleared. Their salaries and other dues
need to be disbursed immediately so that they are able to apply to new jobs and start their
lives afresh after being shown the door. Clearance of paperwork is to be done in as
accurate and as efficient a manner as possible so that employees of the organization do
not find a reason to complain that their pay is being held back. The policy of attrition is
one of the harshest change management policies that is capable of being implemented.
This is the reason why the organization needs to take care to adopt a sensitive approach
when implementing the policy in the manner that is expected, and avoiding any negative
outcomes in the process.
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21ORGANIZATIONAL CHANGE MANAGEMENT
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