Effect of Bureaucracy on Organizational Innovation - Research Proposal Example

Research Proposal - Effect of bureaucracy on National Bank of Bahrain organizational innovation Research Proposal - Effect of bureaucracy on National Bank of Bahrain organizational innovation Introduction The Bahraini banking industry has been criticised for its bureaucratic nature backed by the government’s intervention which is affecting its ability to meet the changing needs of customers. The Middle Eastern banking industry including that of Bahrain is viewed as bureaucratic where state control goes beyond limits and undermines the ability of banks to improve on dynamism and face the challenges of globalisation (FT.com, 2000). The organizational control and policies Emphasis on hiring local nationals and cancellation of expatriate workers program may also impact the innovativeness of banks (OBG, 2008). The competition from the western banks is mounting as consumers begin to prefer the services which they offer which could affect the overall standing of Bahraini banks. Similarly, the future also sets out great challenges for National Bank of Bahrain (NBB) which has the largest share in the domestic banking market of Bahrain. The government of Bahrain owns 49% of NBB bank and exerts a major influence on the bank’s policies and business decisions. On the whole the organizational structure of NBB is considered to be very bureaucratic and opportunities available to employees are very much limited which affects bank’s innovativeness and employees’ overall job satisfaction. The lack of innovation is mainly due to bank’s inability to adapt to the changing requirements of banking and its emphasis on traditional banking products and services which do not meet customers’ expectations. For obvious reasons these factors are resulted from its bureaucratic nature which will be evaluated in this research. Objective The investigation objective set out for this research is to determine the extent of bureaucracy in banks operating in Bahrain and evaluate the effect of bureaucracy on organizational innovation of National Bank of Bahrain which is the first Bahraini bank established in 1957. Significance of Research Research Hypothesis H0: The organizational structure and policies of National Bank of Bahrain support bureaucracy which is negatively affecting innovation of organization and those who are working in it. Research Questions 1. What are the reasons for bureaucracy in National Bank of Bahrain? 2. What are the affects of bureaucracy on organizational structure and decision making process? 3. What is the level of customers’ satisfaction in a bureaucratic organization? 4. What is the level of employees’ satisfaction in a bureaucratic organization? 5. Does innovation including the generation, acceptance, and implementation of new ideas, processes, and products or services mire in bureaucratic set up of Bahraini banks? Literature Review Bureaucracy has been defined as “A structure with highly routine operating tasks achieved through specialisation, very formalized rules and regulations tasks that are grouped into functional departments, centralized authority, narrow spans of control and decision making that follows the chain of command” (Robins, 1996). Thompson (1969) identified bureaucratic organization as “a particular kind of ordered human social system”. He explored the ways in which bureacracy affects innovativeness suggesting that creativity in bureaucratic organizations are aimless with poor commitment from employees and their reluctance to make quick and responsive decisions. He further suggested that governmental bureaucracies do not allow path of innovativeness. He concluded that “most organizations in government and business are a bit under innovative” as bureaucracy hinders ways in which employees can actually develop skills and successful make better decisions. The degree of bureaucracy in any organization affects its ability to respond to changes in the external environment. The mechanistic model supports bureaucratic view of an organization and it implies that the structure of such an organization is only suitable to for stable and unchanging environment and there is more emphasis on adherence to rules, policies and dominance by authority in a hierarchical order (Burns & Stalker, 1961). A research by Sapienza (Sapienza, 2004) highlighted the trends in bank lending by state owned banks and suggested that these banks tend to charge lower interest rates than private banks however they prefer to extend loans to larger firms and in those areas which have lower economic status. The electoral outcome on parties affiliated with banks has also impact on the bank’s operations. Higher interaction with customers in bank requires greater employee empowerment enabling them to develop a sense of commitment and to be able to make decisions which are best suited for meeting their customer needs. A research carried out by Papasolomou focused on internal marketing which presents a way of dealing with both employees’ satisfaction and customers’ needs (2006). This approach allows people orientation which assists financial institutions to cater to their customers’ needs efficiently and at the same time increases employee retention, increased performance and achievement of overall corporate objectives (Drake, Gulman, & Roberts, 2005). Suggested Research Methodology The research methodology is based on interpretative paradigm and qualitative research will be carried out to deduce outcome regarding the research hypothesis set out for this research. The outcome of the research will be either acceptance or rejection of the said hypothesis and recommendations for future studies which could be considered beneficial for prospective users in this regard. The research will be based on both primary and secondary research. For the purpose of primary research a survey questionnaire will be designed and implemented with an aim to gather responses of employees working in the bank to ascertain the extent of bureaucracy in the ranks and assess the impact of bureaucracy on their relationship with the bank and overall working and innovative skills. The secondary research will comprise of gathering relevant information to be presented in the literature review and also pertaining to the policies and procedures adopted by the bank under review which actually contribute to bureaucracy in the organizational environment. Scope of Research The scope of the research is limited due to certain factors which are underlined in the following as dependent and independent variables of the research that is to be carried out related to the research topic: Categorical Variables Dependent Variables Time: The extent of research is limited by the availability of time. Cost: The researcher is not receiving any funding to carry out this research and therefore all attempts will be made to keep the costs of conducting research are minimized (Key, 1997). Independent Variables Interpretative Skills: Researcher’s own ability to collect data and interpret it for presenting findings for the current research is considered as a limitation for the research (Agarwal, 1983). Survey: The random selection of employees of the bank for conducting the survey questionnaire. Continuous Variables Dependent Variable Responses: The number of acceptable responses to the survey questionnaire to be carried out for this research (Key, 1997). Independent Variable Biasness: The respondents own intentions and probable biasness in their responses could be considered as independent factor affecting the outcome of research (Key, 1997). Structure of Report Chapter 1: Introduction This chapter will provide useful background to context of the research to formulate a problem statement for the proposed research. It will also include the objective of research along with research hypothesis and research questions. Furthermore, it will entail the significance of the proposed research and disclaimer. Chapter 2: Literature Review This chapter will provide relevant definitions and explanation related to the existence of bureaucracy in the banking sector and its impact on performance of banks with reference to previous researches, studies, articles and even books. Also a brief introduction to the bank under review will be presented in this chapter. Chapter 3: Research Methodology This chapter will provide literature on already established research methodologies and prescribe the research methodology that will be adopted for the proposed research. Furthermore, elaboration of survey questionnaire and limitations restricting the findings to be presented will be highlighted. Chapter 4: Findings and Observations This chapter is perhaps the most important one which will present findings from the survey questionnaire supported by the secondary research of the bank under review. Chapter 5: Conclusions The final chapter of the report will present the overall conclusions drawn from the proposed research after analysis and evaluation of the primary and secondary data. The acceptance or rejection of the research hypothesis will be outlined along with reasoning for it. Finally this chapter will provide recommendations for carrying out future research. Tentative Time Schedule: 15/1/10 26/1/10 4/2/10 10/2/10 20/2/10 28/2/10 5/3/10 6/3/10 Submission of Research Proposal Chapter 1: Introduction Chapter 2: Literature Review Chapter 3: Research Methodology Chapter 4: Findings Chapter 5: Conclusion Submission of Draft Submission of Final Report References Agarwal, R. D. (1983). Organization and Management. New Dehli: Tata Mc-Graw Hill. Burns, T., & Stalker, G. (1961). The Management of Innovation. London: Tavistock. Drake, S., Gulman, M., & Roberts, S. (2005). Light Their Fire: Using Internal Marketing to Ignite Employee Performance and Wow Your Customers. Chicago, IL: Dearborn Trade. FT.com. (2000). Dynamism is held back by state control . Retrieved January 14, 2010, from Concept: http://www.mafhoum.com/press2/81E78.htm Key, J. P. (1997). Qualitative Research. Retrieved July 29, 2009, from Oklahoma State University: http://www.okstate.edu/ag/agedcm4h/academic/aged5980a/5980/newpage21.htm OBG. (2008). Country Business Intelligence Report: Bahrain. Retrieved January 14, 2010, from Oxford Business Group: http://www.oxfordbusinessgroup.com/publication.asp?country=30 Papasolomou, I. (2006). Can internal marketing be implemented within bureaucratic organisations? International Journal of Bank Marketing , 194-212. Robins, S. (1996). Organisational Behavior: Concepts, Controversies, Applications. Englewood Cliffs, NJ: Prentice-Hal. Sapienza, P. (2004). The effects of government ownership on bank lending. Journal of Financial Economics , 357-384 . Thomson, V. A. (1969). Bureaucracy and Innovation. Alabama: University of Alabama Press. Read More