Change Management in Telecommunications Sector Omantel in Sultanate of Oman - Essay Example

[Doctoral Study by [your official MS, , 200X BS, , 200X Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University [last month of quarter you plan to graduate] 200X Table of Contents List of Figures 3 Chapter 1: Introduction 4 1.1 Introduction 4 1.2 Project Focus 9 1.3 Research Objectives 10 1.4 Research Questions 11 1.5 Research Questions 12 Chapter 2: Background 14 2.1 Background Information on Omantel 14 2.2 Oman’s Telecommunication Landscape 15 2.3 Activities and Future Plans 16 2.4 Privatization in Theory and Practice 18 2.5 Cultural Interpretations of Change 20 2.6 Changes in Omantel 21 2.7 Privatization of Omantel 21 References 23 List of Figures Figure 1. Omantel’s Values 17 Evaluate Change Management in Telecommunications Sector Omantel in Sultanate of Oman. CHAPTER 1 INTRODUCTION 1.1 Introduction: Organizations are reflections of the present social, economic and political landscape of a country. For example, a country with many international companies and businesses could be perceived as an economically progressing organization that employs highly technical and skilled employees. This indicates that the country is highly advanced and privatizations of government owned corporations indicate a liberalization of government economic and trade policies. However, not all organizations keep up with the social, economic and political changes in the country, there are those who remain in touch with methods and resist change. But if an organization wants to achieve progress and growth, it must remember that change is inevitable. Change in the organizational structure, management and use of technology indicates that the organization is moving towards better measures of effectiveness and paving its way towards progress and prosperity. “Change will not disappear nor dissipate; technology, civilizations and creative thoughts will maintain their ever-accelerating dive onwards” (Paton & McCalman 2008, p. 5). As with any process involving transition and transformation, change in the structure and strategies of an organization is often met with negativity and apprehension. Even if the change is for the greater good of the company, there will always be those who will remain anxious about its consequences. Organizational change is brought about by a number of factors; this could be from mergers and acquisitions, a government take-over or the privatization of the organization. The anxiety provoking aspect in any organizational change is not actually the transformation of the organization or the change in management but the fact that the employees have to leave their old ways of doing things; it is the learning of new tasks, new protocols and new operating procedures that threaten employees. By definition, change means discarding the old and embracing the new, and the new may not always be accepted and appreciated by the employees. “Traditionally, analysis of organizational change has been built around the organism metaphor in which organizations are analyzed as if they were living organisms operating in an environment to which they need to adapt to ensure survival” (Lesson 37: Organizational Change n.d., p. 1). Anxiety and apprehension to some extent is the natural reaction to change, as our body responds to external stimuli both physically and psychologically. This response or reaction to change is welcomed by the agents of change as an opportunity to make the employees aware of the undertakings taking place in the organization. It is the time when questions could be answered, when professional thirsts could be quenched, when fears and doubts could be placated and when employees are engaged as advocates of the process of change as they now possess the knowledge and information that they can share with other employees who face the same challenges. Change Management in an organization is all about the actions necessary for an organization to recognize, organize, execute and take full advantage of considerable change. The ultimate aims of Change Management organizations are: Successful planning, execution, measurement and preservation of a change in the initiatives of the organization and improvement of their current ability for managing change. Here the purpose of the case study is to evaluate change management in Telecommunications sector Omantel in Sultanate of Oman. “The Sultanate of Oman is among the Region’s most progressive countries in the telecommunication sector in terms of liberalization and promotion of competition. The Telecom operators/service providers in Oman offer a wide range of telecommunications services based on state of the art technology to the consumers” (General Information on Telecom Sector in Oman n.d., p. 1). The Regulatory Authority of the Telecommunications is a business body found under the Act of Telecommunications Regulatory issued in the Royal Decree No. 30/2002 as an outcome of an initiative of the Government to liberalize the telecom division in Oman and convert the monopolistic telecommunications marketplace into a competitive one. In order to fulfill its aims, TRA tried progressively to get rid of all fences regarding market entry and permit interested shareholders to enter the Omani telecom market. It is important to take note that change can be an exciting prospect and a positive experience for the organization, so this message should be communicated to all relevant members of the organization. How well the transition of the company has been, from its previous state to the state achieved after the change, can be measured by the extent to which the employees embrace and live up to the objectives and goals of the new company. Thus, in any process of change, the focal point should always be the employees. This study attempts to determine the impact of the privatization of Omantel on its employees and to explore their perceptions, attitudes and feelings towards the changes brought about by the privatization of the company. Omantel - The Oman Telecommunications Company is the primary telecommunications business establishment in Oman and also a primary supplier of Internet services in the nation. Omantel is the pioneer of solutions for the obstacles and hurdles in the field of telecommunications in the Sultanate of Oman. The company also boasts the broadest spectrum of options regarding excellent services amongst the broadcasting system coverage. “As a pillar of the Omani economy, Omantel has been a leading player in Oman’s progress and national development” (Omantel 2011). Moreover, the report would determine whether the employees have been directly involved in bringing about the change. In this process, the effectiveness of the change process can be measured in terms of diffusing negative attitudes towards the privatization of the company. The privatization of Omantel has been a time consuming process and it has changed the company’s rationale and what is required from the employees in terms of their job performance and productivity. “Oman’s efforts to privatize the telecom sector are motivated by its commitments to the World Trade Organization (WTO) to liberalize the industry by 2003. According to Omantel sources, the delay for privatization is the result of the global economic slowdown and lack of interest on the part of international telecom operators” (New Regulatory Body to Accelerate Privatization of Oman Tel 2002). Since the change in Omantel was concerned with the restructuring of the organization from a government owned company to a private company, this entailed a complete revamp of the job descriptions, the organizational structure, the line of communication, the salary scale and even the job qualifications and requirements. Thus, it is obvious that the changes in Omantel are widespread and far-reaching due to which all employees from the top management to the lower ranks are affected by the privatization. “Oman’s Ministry of Telecommunications has established a regulatory agency to oversee the long-awaited privatization of the state-run telecom firm, Omantel. The new watchdog dog body will manage the first phase of the company’s partial sale to private investors” (New Regulatory Body to Accelerate Privatization of Oman Tel 2002). A study of change management and perception of the employees about the change in the organization prove to be invaluable to the management in terms of cultivating the management-employee relationship. The process of change management may consist of creative marketing to facilitate communication among the audience experiencing change, but also at the same time deep social understanding regarding group dynamics and leadership styles in the organization. Tools or components of change management include: * Change management process * Readiness assessments * Communication planning * Coaching and managing trainings for change management * Employee training development programs * Resistance management * Data collection, feedback analysis and corrective action * Celebrating and recognizing success” (Change Management – The Systems and Tools for Managing Change 1996) The result of this study would be very helpful for the management of Omantel as well as its Human Resource Department as it would provide data which can be used as a basis for intervention and program design. This would ensure that the employees will welcome and embrace the changes in the company. Moreover, this study is relevant to the practice of management in an international setting, where cultural factors are always present; this study would contribute to the growing body of research on change management and would also lend insight as to how change is introduced and implemented in Oman, a Middle Eastern country where work ethics demand obedience and respect for authority. The rest of the documents present and discuss the research focus, objectives, research questions, and provide a brief outline of the entire research study. This chapter provides an overview of what the study is about and its relevance to the practice of management. 1.2. Project Focus: This research is concerned with how the changes in Omantel have affected the employees and to determine their perceptions on the change process. The focus of this study is twofold; Omantel and the changes it has undergone since the inception of the decree for the privatization of the company. “Telecom sector is one of the most important sectors of the economy. The sector has witnessed significant changes such as competition in mobiles that helped in bringing efficiency and good quality of services at competitive prices, over the past few years” (Telecommunications Regulatory Authority Sultanate of Oman 2005, p. 10). Omantel emerged out of one of the Government Companies of the Telecommunications, division of the Ministry of Telecommunications. It’s still the one of the monopoly providers of fixed telephony in the Sultanate, but subsequent to dividing off Oman Mobile as a distinct operating body last year; mobile communications are nowadays subject to competition. Omantel has an authoritative infrastructure in Oman, enveloping the entire state consisting of many distant rural areas. Changes in Omantel affect its entire functioning, so proper change management process is necessary. The main focus of this project is to evaluate change management in Telecommunications sector Omantel in Sultanate of Oman. Omantel has been the major player in the telecommunications industry in Oman, thus it has employed a large number of people and invariably, they will be affected by the changes in the company. “Omantel, the first telecommunications company in Oman, is the main provider of Internet services for the country. The government holds the majority share of stock in this company, totaling 70%, and is helping to provide the lion's share of Internet access for their people. The famous Omantel Power net is the only Internet service in Oman providing broadband access” (The Oman Telecommunications Company Censorship Effort 2007). The concept of change management is not new to the study of organizations and human resources but somehow it has not received the same scientific inquiry into its nature and functions like compensation and performance evaluation have. (James Michael Stewart, 2011). “Change is not the same as transition. Change is situational because of the new technology, the new boss, the new team roles, the new policy, etc. Transition is the psychological process people go through to come to terms with the new situation” (Notes on Change, Transformation and Transition 2002). Thus, within the context of change management, Omantel’s management takes actions in terms of addressing the changes in the company brought about by privatization and the reactions and perceptions of the employees towards the change are assessed and measured in this study. In doing so, the chances of success and integration of the employees to the new Omantel can be predicted. In totality, this project would also determine whether the change management concept as espoused by western authors and practitioners is also true to the organizational climate in Oman. “Anyone with experience in change management knows that efforts can succeed or fail based on communications. Experience consistently teaches that it’s almost impossible to over-communicate when leading change” (Schuler 2002). 1.3 Research Objectives: 1) To identify the perception and experiences of employees in Omantel in terms of the privatization of the company. 2) To identify the change management process that the company has taken and the extent to which the employees became agents of change or as participants in the change process rather than the recipients of the changes. 3) To identify change management process in Telecommunications sector in Oman. 4) To identify extent to which the changes in the organization have beneficial to the employees. 1.4 Research Questions: 1. How did the employees of Omantel feel about the privatization of the company and how did it affect the employees working at Omantel? 2. How did the employees participate in the change process in the organization? Omantel: This Oman based company gives attention to operating and preserving services of fixed and mobile telecommunication. The main target customers of the company include government, residential and corporate. Residential services consist of worldwide and nationwide calls and prepaid cards, at the same time it also offers Internet services consist of surf and Internet log as well as broadband wireless service. “Oman Telecommunications Company (Omantel), established in 1987, is the largest telecommunications company in the Sultanate of Oman. Omantel is 70% government owned. In April 2008, it acquired a 65% share in World Call Pakistan. The company’s vision is to be a highly innovative telecommunications company providing high quality telecommunications services at reasonable prices in order to satisfy the needs of its valued customers” (Omantel Secures International Gateway and Server Farms with Tipping Point Intrusion Prevention Systems n.d., p. 1). Main challenge of the Omantel’s was to defend its server farms from most recent intimidation for example attack on un-patched schemes and zero-day attacks on patched scheme. The organization has also required generating a time-window for holding with the policy of patch management. Omantel pursues a strict patch and policy of change management with every patches tested prior to deploying on manufacture systems and this required adequate time. With a lessening time line among every patch and make use of release, there was a risk to these manufacture servers of continuing “un-patched” at the same time as the safety team followed the patch organization steps.” Omantel (as both Omantel and Oman Mobile) has offered the full spectrum of telecommunications solutions to the people and businesses of Oman since the dawn of the Renaissance in 1970. Over the years, as the pioneering telecommunications supplier, we have striven to connect even the most remote communities to each other and to the rest of the world. As a pillar of the Omani economy, Omantel has been a leading player in Oman’s progress and national development” (System Architect 2004). In order to cope with the emerging trends in telecommunication industry, it is very much necessary for the Omantel telecommunication industry to adapt to the changes. The privatization of Omantel would create a main splash in the Omani marketplace, as it is one of the principal and most recognized companies in the state. 1.5 OUTLINE OF THE STUDY This paper is a written presentation of why this study is important and relevant, its aims and Research direction, the literature review, methodology, results and discussion and the Conclusions and recommendations derived from its findings. Chapter One introduces the problem and provides the context in which the problem is studied and investigated, it identifies the important research aims and questions that guides the research study. Chapter Two provides the background of the study, the unique characteristics that might influence the problem and the results of the study are identified and described in this chapter. Chapter Three contains the review of related literature and sets up what is known and what has been done so far as organizational change is concerned as it affects the organization, the employees and the overall effectiveness of the company. Different theories and concepts are also presented in this chapter to provide the framework from which this scientific exercise is being conducted. Chapter Four is the methods section of the report, this section presents a detailed account of the design of the study, the participants and the research environment, the instruments used, the analytical tools used and how the data is to be presented and dissected. Chapter Five presents the results and findings of the study derived from the data gathered in this study. Chapter Six contains the discussion of the findings of the study, how it answers the research questions and how it stands with previous literature and theoretical concepts. Finally, Chapter Seven provides the conclusions of the research gained from the findings of the study as well as identifying future research questions and the limitations of the study. CHAPTER 2 BACKGROUND INFORMATION 2.1 BACKGROUND INFORMATION OF OMANTEL Oman Telecommunications Company (Omantel) is the largest communication service provider in the Sultanate of Oman, ‘The Oman Group’. It is currently the only provider of licensed public fixed, Internet and data telecommunications services in Oman and one of the only two licensed public mobile telecommunications services providers in Oman. Omantel has two broad business lines, namely fixed line service and Internet / data service provision (Usoman, 2005). From the telephone calls one makes, (local or international), to the SMS Message one sends, and to the time one spends surfing the Internet, Omantel is the name that makes it all possible for everyone in Oman (Omantel, 2007). Omantel’s vision is to be a highly innovative Telecommunications Company. Its mission is providing high quality Telecommunications services at reasonable prices, through effective teamwork, to satisfy the needs of its valued customers (Omantel, 2007). Omantel’s values are illustrated in figure 1. Figure 1: OMANTEL’S VALUES Source: Omantel, 2007 Omantel’s corporate values indicate that the company is service oriented and at the same time progressive in its vision in providing quality telecommunications services. The core values pertain to how the organization should communicate with the whole community. Since it is a telecommunications company, the company should embody the ideals of Transparency, respect and confidence in terms of its services to its clientele, as well as Being friendly, committed and nurturing to the greater society, lastly the company should Project the value of progressiveness and inclusion, where greater access to communication Services are the end goal. Within this corporate identity, the organization therefore requires all of its employees to embody the values that the company strives achieve. Changes Within the organization are keeping in with this core values, hence all the reorganizations and job modifications fit within the corporate values of Omantel. 2.2 OMAN’S TELECOMMUNICATION LANDSCAPE Oman ranks last among the Gulf Cooperation Council (GCC) countries as it has a Telecommunications density of 9.5 in 1999. Since its formation in 1980, the General Telecommunications Organization (GTO) has been the only national telecommunications Operator. There was no independent regulatory body in the sector, as GTO was Government-owned and operated by the Ministry of Post, Telephones, and Telegraphs (PTT). However, following a ruling issued in July 1999, GTO was converted to a closed Stock holding company renamed Oman Telecommunications Company (Omantel). This Conversion paved the way for the progress of the process of privatization of the company (Dahel, 2001). The telecom landscape in Oman is dominated by Omantel. It is the sole licensed operator of public fixed lines, telecommunication services including local, long distance and international telephony besides data communication and value added services. Omantel was restructured in 2003 to promote the liberalization of the Telecommunication market (Oman, 2007). In effect, foreign investors and other mobile Carriers have been encouraged to come to the country to set up their businesses in order to provide the impetus for growth of the telecommunications industry. Statistics from the Telecommunication Regulatory Authority of Oman reveal that there are 269,000 phone lines and over 1.5 million mobile phone subscriptions in Oman. The Internet World Statistics website estimates that Oman has some 245,000 Internet users. Even with a rapid rise in the number of Internet users Oman has comparatively few in comparison to other countries in the region. Although persistent attempts have been made to develop the use of the internet outside the capital, Muscat, little development has been made, particularly with regard to access to high-speed ADSL services (Oman, 2007). At present, Omantel has been involved in the process of educating the society about the different uses of the Internet and business units have been very receptive to the expansion of the Internet services to other parts of the country although actual implementation has been slow. 2.3 ACTIVITIES AND FUTURE PLANS Oman is in the middle of a major economic makeover and driving this is the rapid transformation of the telecom sector. The company enjoys robust financial health and has been on an expansion spree. The following section examines issues of capacity expansion, increased geographic coverage and some strategic alliances of the company with foreign players of robust corporate performance: Omantel’s net profit for the first quarter of 2006 registered a 9.6% growth and touched $55.6million! Growth was recorded in mobile and broadband services. Capacity expansion and geographic coverage: Omantel had inked a landing party agreement with Trans World Association (TWA) of Pakistan in December 2005 to lay a submarine cable from Seeb Station in Oman to Karachi. The total outlay for the project is $1.2 million. This will make Omantel, a regional multi cable operator and unleash business potential within the gulf region as well as within the sultanate. Collaboration with Siemens for GSM network upgrade: Siemens Communications, one of the world’s largest communication providers signed a deal with Oman mobile in late 2005 to extend GSM radio capacity and coverage in regions like Sharqiya, Dakhliya, Daria and Wusta. This deal marked the third phase of the GSM network up gradation. This will facilitate greater geographic coverage and will include formerly unreachable regions. The subscriber base will therefore enlarge as a result. Completion of fiber optic link project in Doffer (Oct 2005): In its attempt to modernize and develop telecom infrastructure, Omantel has laid a fiber optic link project connecting Thurmont with Al-Maziyouna from one side and Thumbrait-Salalah from the other, at a total length of 300 kilo meters. Launching WI-Fi broadband: The Company also plans to roll out WI-fi Broadband service that would enable Internet access even from hotels and shopping malls. This of course would be restricted to urban areas initially. Oman Telegraphy reported, “Second Emirati cello Du, which is to launch services next month has inked an interconnection pact with Omantel, incumbent in neighboring gulf state of Oman. The deal covers voice interconnection and International data services. The exchange of traffic between the two operators will take place via the FALCON submarine cable, a 10,300 km fiber optic system joining Suez to Muscat and looping around the Persian Gulf with a designed maximum capacity of 1.28-2.56Tbps” Attractive packages: In early 2007, Oman mobile rolled out attractive talk time schemes to boost its sales. At the Muscat festival, ‘Hayyak starter kit’ and ‘Mada’ packages were introduced. Hayyak starter kit was available at a price of Omani Rial 7 and offered free talk time worth Omani Rial 5, also 20% extra talk time was given on the Omani Rial 10 recharge card! Appealing offers like this facilitate a boost in the sales and are popular among the customers. They afford them connectivity, mobility and they can avail more than thirty value added Services. Operations and support system: In Sept 2006, Omantel collaborated with the French Company ‘Capgemini Telecom’, and the Sultanate Oman’s computer services to implement operations and support system. This system will enhance efficiency and improve the Quality of services offered. The incidence of breakdowns is also expected to be reduced. 2.4 PRIVATISATION IN THEORY AND PRACTICE Privatization has become the by word in the rest of the world for the past decades, countries who were economic conservatives and had closed markets, have now embraced industrialization and free trade. The liberalization of the market economies has led to the privatization of most government owned corporations especially in East Europe and in the larger part of the third world countries. The move to privatization has however no clear theoretical basis as most of its development is geared towards ideological assumptions. Very few researches has been conducted on the effectiveness of privatization in answering the need for greater productivity, most of the empirical evidence has talked about the effect of changes in the organization. The reasons governments give in to privatize organizations are numerous. It includes promoting efficiency, raising revenues for the state, reducing government interference in the economic landscape and encouraging foreign investors to promote and share ownership and also the development of capital market. Of all the cited motivations for privatization, the most obvious reason is to increase efficiency; this suggests that there is a widespread belief that Government agencies lack efficiency. Public ownership seems to have been associated with low productivity, poor services and lack of profit. Agency theory says that managers in the government sector do not fear inefficiency as they do not have any incentives to perform better. They are poorly monitored and the monopoly of a government agency in a financial sector means that they do not have any fears of bankruptcy. Poor monitoring is caused by the fact that government ownership means that the state owns the company and that the sense of ownership is diffused; meanwhile the firms are not publicly traded which means that it does not have to deal with the threat of takeovers. Likewise, property rights advocates say that the inefficiency of the Government agencies stem from the inability of the employees and managers to be assigned property rights within the company. An argument about privatization is that it is not the sense of ownership that is important, but the competition that arises from the conduct of the enterprise. If the government moves to liberate the industry, then opening the market to free trade means opening the industry to competition. Privatization actually signals the attempt of the government to reform an industry that it does not have the capacity to develop on its own. The telecommunications industry is a big market and having the monopoly of the market is advantageous to the state. But the fact that the industry is one of the most developing and changing, the government does not have the capacity to build the market on its own as it would entail greater resources. Thus, liberalization of the industry means opening the market to competition which however to some degree can still be controlled by the government in terms of its laws on business ownership and enterprises. Therefore, privatization is advantageous for the government. 2.5 CULTURAL INTERPRETATIONS OF CHANGE The concept of cultural influences to the process of change in organizations has relatively been recent, although the idea of cultural differences had gained momentum in the early 1990’s with Hofstede’s (1986) seminal work, it was only a decade ago that Van de Ven and Poole (1995) put forth the model of differing conceptualizations of change based on social and national perspectives. They postulated that there existed four social factors that define the national understanding of change. These are life cycle, technology, evolution and dialectic. It was assumed that organizational and member perspectives of change are evaluated against what are the shared norms, values and sense of fairness and equality (Hofstede, 1986; Markus & Kitayama, 1991; Spencer, 1986; Traindis, 1989; Wagner, 1995). Cultural researchers have argued that an organization does not stand alone; rather the organization is influenced by its members as well as influencing them through corporate values, the shared norms and traditions prevalent in the cultural orientations of its members. The unique organizational culture of an organization is socially acquired and it’s embodied by a shared knowledge cloaked in specific and general frameworks for understanding the meanings associated in each social reality (McKelvey, 1999). Therefore a more culturally diverse organization has to contend with several cultural perspective, if the organization uses one perspective over the other to initiate change, then those who do not share this culture will surely be resistant to change. On the other hand, if the organization is characterized by one culture, then the process of change initiatives will be highly successful since all of the members would be speaking in a perspective that is shared by all (Miroshnik, 2002). 2.6 CHANGES IN OMANTEL Privatizing Omantel has resulted in a new management structure being adopted in line with the best international standards. The key managerial objectives are to extend coverage to all the regions in the country and provide telecom services like normal voice line, GSM, Internet access, leased line along with TV broadcasting. Additionally, they also aim to collaborate with international telecom companies and enter into strategic alliances to build network infrastructure and benefit from their expertise (Omantel, 2007). 2.7 PRIVATISATION OF OMANTEL The privatization of Omantel changed the name of the company to its present name, previously it was run by a government agency and formed a part of Government owned corporations. However with the new ruling, the company was taken from government regulation and the slow change to a private company begun. After which, the company was divided into two separate outfits; the regular phone line, Internet service and mobile service provider. These enabled better management and better services to their clientele. The Oman Economic Review (2007) reports that the Sultanate has agreed to privatize Omantel this year; the next vital step will be to draft new telecommunication laws and set up an independent regulatory authority to regulate the market. At present, foreigners are banned from 100 percent ownership of businesses in the country and due to that the Telecommunications industry has been monopolized by Omantel as far as regular phone lines and Internet service providers are concerned. Lastly, different viewpoints in an organization have led to clashes and disagreements between the organization and the employees as the organizational culture which should be shared by all has not been fully communicated to everyone. According to the report, the Government announced that it would divest 40% of the company and it would be an investment option to Omani and foreign investors. Additionally 9% of Omantel’s equity would be available to local pension funds, while the Government will retain 51% share. The underlying aim is to open up the market to global investors to expand the telecom sector and to keep in line with technological changes. Privatization is expected to improve the company’s overall performance in all aspects and to be able to provide services that can compete with international standards and open the country to the major players in the industry. References Change Management – The Systems and Tools for Managing Change. 1996. Change Management Learning Center. 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