Change Management within the Nigerian Banking Sector - Research Paper Example

Change Management Practice – Case Study of Nigerian Banking Sector Table of Contents 1.1. Introduction 1.2. Problem Definition 1.3. Aims and Objectives of the study 1.4. Research Questions 1.5. Brief Literature Review 1.6. Research Methodology 1.7. Need for the Study 1.8. Opportunities and Limitations of Research 1.9. Time Scale 1.10. Proposed References 1.1. Introduction Change management is an important concept within the discipline of project management that basically refers to the implementation of change in controlled method using predefined framework. There are certain important principles that are supposed to be followed for successful change management. It is important to get the support from the environment and system to make change successfully implemented in to the organization. There are certain models also presented by the experts that intend to assist the organizations and countries while conducting the process of change management in any sector or industry (Burnes, 2000, p143). Nigerian banking sector being an integral part of the Nigerian economy has been experiencing series of reforms especially after the SAP initiatives. These reforms are meant to bring significant level of change in the prevailing banking structure and patterns of Nigerian banking. However, it is observed that all the set goals of reforms and changes are not attained successfully in the country and the process of change management is not adequate accomplished. In order to examine the change management practice within Nigerian banking sector, the following paper propose the qualitative research study that intends to analyze the change management practice in Nigerian banking sector using the Kotter’s eight step model of successful change. The proposed study would present the case study of Nigerian banking sector using interviews and analysis of secondary data as tools of data collection. The entire effort is directed by the motivation to find the practicability and implications of change management theories and models in real business world. 1.2. Problem Definition Nigeria was among the middle income nation of the world during the 1970s and early 1980s. However the world oil market collapse in early 1980s draw major impacts on the economic performance and development of the country and soon it fall in the list of 30 poorest nations of the world (Albert, 2000, p24). There are certain factors that have contributed towards the present worst economic condition of the country and in order to put Nigeria back on the path of development and recovery, it is very essential that not only the main factors behind the economic instability have to be highlighted but there is also need of formulating sound policies and strategies that can make improvement in the economic scenario of the country. In this regard the social scientists also propose different suggestions so that improvement could come in the banking sector of the country and the economic stability could be achieved. However it is observed from that there are few researches that have directly focus on the consumer product manufacturing and there are little facts and figures provided in the research studies that analyze the performance of this sector regarding the practice of change management that is supposed to be an important issue affecting the progress and performance of the sector. Thus in this context the proposed research strives to analyze the practice of change management within banking sector of Nigeria so that the outcome of the research can contribute towards the improvement in the performance of the sector and new path for the Nigerian banking sector could also be discovered in the light of the research findings. 1.3. Aims and Objectives of the study The proposed research study aims to analyze the practice of chain management within Nigerian banking sector in order to find out the practical implications for change management theories and concept. Thus, the key goals of the proposed dissertation are as followed: To understand and explicitly explain the concept of change management To explain different theories and models of change management to have deep insight over the topic To find out the practical implications of change management theories and model in banking sector To analyze the practice of chain management within Nigerian banking sector regarding the implementation of reforms and SAP initiatives To examine the practice of change management in Nigerian banking sector using the Kotter’s (1996, p87) eight step model of successful change. 1.4. Research Questions The proposed research study aims to seek the answer of following research questions “How the change management principles and practice have been implemented in Nigerian banking sector to contribute towards growth and expansion of the sector over last three decades”? 1.5. Brief Literature Review There are certain important topics that need to be covered in the proposed research study using the relevant literature and data. The literature review for the proposed dissertation will explain in details the concept and model of changes management, the past, present and current state of Nigerian banking sector, the significance and need of change management practice for the Nigerian banking sector and the trends of change management practice in this important part of the Nigerian economy. Nigerian Banking sector and Change Management Nigeria being the world’s major supplier of crude oil is among the influential members of Organization of Petroleum Exporting Countries (OPEC) that produces 1m barrels of crude oil per day. Nigerian economy is well regarded as oil based economy because oil plays the fundamental role in determining the country’s revenue and about 90 percent of the foreign exchange earning of the country is contributed through the sales of oil. When there was decline in the oil prices in the international market in 1998, the economy of Nigeria also faced major deficit and there was decline of N59.8 bn in the federal budget. According to the estimated Nigeria was expecting to have $9.8 bn oil revenue but due to cut in the OPEC quota of Nigeria, oil prices decline and closure of many of the oil wells in the country, this projected amount could not be met and there were just $6.3 bn earned by Nigeria as oil revenue (Tunde, 1999, p8). These changes draw major impact on the economic conditions of the country. In the year 1998 the government had decided to increase the salaries of the public employees by 300 percent but after just three month the government had to take back its decision as there was major decline in the oil revenue and the government felt short in financial resources to meet its promise. In this way the oil prices decline affected the economy of Nigeria very strongly and due to the decline in the oil revenue of the country, their economic activities including the working conditions of the labor and their productivity was also affected badly. In this situation, the country looks towards other sectors so that they could come in front to support the economy but unfortunately there was lack of development and growth in non-oil sectors due to which the Nigerian economy has to face major setbacks to due lack of support of non-oil sector (Tunde, 1999, p8). This problem evolve the wave of realization within Nigerian authorities and policies makers that they have to focus upon the development of non-oil sectors as well so that these sector could also contribute towards the economic growth of the company. after this realization, there were many amendments and reforms introduced in non-oil sectors like banking, manufacturing, agriculture sector etc. that all were aimed at improving the performance of these sectors. However, due to lack of proper management of change many of the reforms and amendments failed to generate desired level of results and the situation affirms that there is inessential need of change management especially in the non-oil sectors like banking that have the potential to accelerate the economic development of the country (Tunde, 1999, p8). The banking sector of Nigeria has gone through several reforms, amendments and structural changes since the establishment of the country. There have been different reforms and change policies implemented in the sector in order to foster its growth and expansion and enhance its performance. After the commencement of SAP, the sector has been experiencing influential episodes of reforms that have drawn different levels on impact upon the performance of the sector. The first series of reform was introduced in 1986-1993 that results in the deregulation of banking industry. The second reform series in 1993-1998 reintroduced regulation. In 1999, efforts were being made to liberalize the banking sector policies through distress resolution program (Tomori, 2005, p11). Another series of reforms and changes was introduced to the Nigerian banking sector in 2004. Through these reforms, the government expressed the intension to support the development of reliable and efficient banking sector that guarantees the safety of the money of the depositor as well as play supportive role in the economic development. All of these reforms were implemented with the goal of bringing significant improvement in the performance of Nigerian banking sector however, the most important factor behind the success of these reforms is the change management. The reforms were introduced in to the system but at the same time, it is important to analyze what steps were taken to make these reforms acceptable and workable for the people involved with the sector. The need of change management within the Nigerian banking sector could be well understood in the context of some reforms and major amendments introduced in the sector during last few years that need adequate level of change management in order to work positively towards the growth and expansion of the sector. The banking sector is expected to comply with certain important reforms and policies enacted upon the sector from time to time. In July, 2004 the Nigerian government announced the new capitalization of Nigerian banks due to which all the functions and activities related with the Nigerian banking sector are affected and need revision of policies and strategies to cope up with the evolving change. Kotter’s eight step of successful change management Kotter (1996, p65) proposes that in order to led the organizations or sector towards successful implementation of changes and reforms, it is important to follow a series of actions determined through a model of understanding and managing the change. All the eight steps identified by Kotter are related to the response and approach of the people towards the change that affirms change should be implemented keeping in view the attitudes and behaviors of the people involved. The first step of Kotter model of change management is to increase urgency. In this step, the management is supposed to inspire and motivate the people so that they could feel the goals and change close and relevant. In the second step, the management is required to create a guiding team by placing the right person at right place. In the next step, the vision of the change is ought to be set right and then the management has to communicate for buy-in in order to involve as many as possible people in the process of change implementation. The next stage of the Kotter model call for empowers action for the removal of obstacles that is followed by creation of short term wins. The management is then supposed not to let up but to encourage the people towards change implementation and their successful outcomes. In the last stage of change management model, the managers are requires to make the change stick by reinforcing the vales of successful change that assure the penetration of change in to the working culture. Though the above review of the literature is very brief but in the actual dissertation the review of the literature will be conducted in more depth and details and all the issues related with the topic of the research will be explain with the help of the review of the researches conducted by different social scientists. 1.6. Research Methodology The proposed research study is intended to be conducted employing a qualitative research approach. The qualitative research could be of several types, as it is indentified by Berg (1989, p65) there are many ways of conducting a qualitative research including “case study, literature review, natural experiment, participant observation, interviews based, and secondary analysis of data or combination of these.” Keeping in view the aims and objectives of the study, it is decided to select case study as the research methods. It was decided to conduct a case study because case study is a significant tool that helps in gaining understanding of a complex issue or object. This method is commonly used by the social scientist for many years to analyze “contemporary real-life situations”. Yin (1984, p154) explains that case study is an empirical study that aims at investigating any contemporary phenomenon in its real life style context (Yin, 1984, p23). For arguments indicated above, the Case Study was found to be most relevant and useful for conducting this dissertation as it enables a deep analysis of the issues. Yin (1994) further identifies that for a case study it is necessary that data must be collected from at least six sources. These sources are Documents Archival records Interviews Direct observation Participant-observation Physical artifacts The researcher also makes it clear that it is not necessary that in each case study all the above sources must be used however some of them are generally followed in many of the case studies. For this dissertation the basic sources of information are “Documents, Interviews and observations. The information sources can also be classified as Primary and Secondary resources. However the data gathering is basically classified in to two main categories or techniques. These techniques are “Primary Data and Secondary Data”. As far as the Primary Data is concerned “Semi Structured Interviews” of ten professionals associated with Nigerian banking sector would be conducted. Yin (1994, p76) described that interviews are most vital source for case study information. The people interviewed are associated with the Nigerian banking sector so they are expected to have deep insight and knowledge about the change management practice in the Nigerian bank. Kotter eight step model of successful change management has been selected to examine the practice of change management within the Nigerian banking sector. 1.7. Need for the Study There have been many research studies conducted to identify the main reasons behind the economic instability of the country and it is revealed from many of the researches that the low level performance of the banking sector of Nigeria is an important factor that is badly affecting the economic development and growth of the country. In order to fill this gap found in the literature, the proposed research study aims to analyze the practice of change management within Nigerian banking sector while focusing towards last three decades. 1.8. Opportunities and Limitations of Research The proposed research study aims to achieve its desired objectives employing a qualitative research approach and the selected method is case study. There are different opportunities as well as limitations that are likely to affect the progression of research work and attainment of desired goals. The study basically focuses upon the Nigerian banking sector and fortunately there is enough amounts of necessary information and data available through different academic scholarly and academic resources. Due to this reason, it could be predicted that the basic information, facts and data for the study will be gathered easily through different authentic resources. However, the secondary data alone would not be enough to conduct the research study and interview has been selected as the tool of primary data collection. The main research limitation is expected to encounter during the process of primary data collection i.e. during the interviews. There is an agreed time of six weeks for the conduction of interviews and it is decided to come up with the interview responses of at least 15 experienced banking professionals. There is a possibility that some of the selected professionals would show their unwillingness to give interview due to shortage of time and their engagements in some important matters. In order to cope up with this limitation, interview requests would be sent to over 30 professionals so that it would become easy to get the interview appointments from 15 professionals. 1.9. Time Scale Week Activity Week 1 Accessing different secondary sources for collecting literature relevant to the topic like libraries, internet, personal and academic collection of books and other publications Week 2 Sorting out the relevant material and analyzing the information to address the issues raised in the research proposal Week 3 Construction of interview questionnaire based on the issues and problems identified during the initial review of literature Week 4 Making the list of potential study participants and sending interview requests and questionnaire to schedule interviews Week 5-10 Compiling information collected through interviews of banking professionals Week 6 Compiling and analysis of secondary and primary material in presentable form to assure its logical flow and matching with the research objectives. Week 7 Proof reading, editing and final compiling 1.1.0. Proposed References Balogun, E. D. and M. F. Otu (1991); “Credit Policies and Agricultural Development in Nigeria”, CBN Economic and Financial Review, 29(2):pp. 138-155. Badham, R and Buchanan, D (2000) Power, Politics and Organizational Change, London: Sage Publications Burns, B. (2000) Managing Change; a Strategic Approach to Organizational Dynamics, Essex: Pearson Education Limited Carnall, A. C. (2003) Managing Change in Organizations. Essex: Pearson Education Limited. Central Bank of Nigeria, Lagos, (1992), the Impact of Structural Adjustment Programme on Nigerian Agriculture and Rural Life Central Bank of Nigeria, Lagos, (1993), Perspectives of Economic Policy Reforms in Nigeria. © 1993 CBN Chiber, R. and J. Wilton, (1986), “Macroeconomic Policies and Agricultural Performance in Developing Countries”, Finance & Development, 23(3):pp. 6-9. National Planning Commission (NPC), Nigeria (2004). The National Economic Empowerment and Development Strategy (NEEDS), © 2004, NPC, Nigeria Nnanna, O. J. (2005); “Central Banking and Financial Sector Management in Nigeria: An Insider View” in Fakiyesi, O. O. & S. O. Akano (Eds), Issues in Money, Finance and Economic Management in Nigeria (Essays in Honour of Professor Obasanmi Olakankpo), pp. 99-120. Ojo, J. A. T. (2005); “Central Banking and Financial Sector Management in Nigeria: An Outsider View” in Fakiyesi, O. O. & S. O. Akano (Eds), Issues in Money, Finance and Economic Management in Nigeria (Essays in Honour of Professor Obasanmi Olakankpo), pp. 35-98. Omoruyi, S. E. (1991); “The Financial Sector in Africa: Overview and Reforms in Economic Adjustment Programmes. CBN Economic and Financial Review, 29(2):pp. 110-124. Soludo, Charles C. (2007). “Macroeconomic, Monetary and Financial Sector Developments in Nigeria”, CBN website: www.cenbank.org. Tumor, S. (2005); “Macroeconomics and Monetary Policy: The Nigerian Experience” in Fakiyesi, O. O. & S. O. Akano (Eds), Issues in Money, Finance and Economic Management in Nigeria (Essays in Honour of Professor Obasanmi Olakankpo), pp. 9-34. References Albert J. A (2000), Creating Value Under Uncertainty: The Nigerian Experience, Journal of African Business, Volume: 1 Issue: 1, Lagos Business School, Lagos, Nigeria, pp9 - 24 Berg, B. (1989), Qualitative Research Methods for the Social Sciences, third edition Allyn and Bacon, Boston Burnes, B. (2000) Managing Change; a Strategic Approach to Organizational Dynamics, Essex: Pearson Education Limited Kotter, P John (1996), Leading change, Harvard Business Press, 1996 Yin, R. (1984). Case study research: Design and methods (1st ed.). Beverly Hills, CA: Sage Publishing. Yin, R. (1994). Case study research: Design and methods (2nd ed.). Thousand Oaks, CA: Sage Publishing Tomori, S. (2005); “Macroeconomics and Monetary Policy: The Nigerian Experience” in Fakiyesi, O. O. & S. O. Akano (Eds), Issues in Money, Finance and Economic Management in Nigeria (Essays in Honour of Professor Obasanmi Olakankpo), pp. 9-34 Tunde Obadina (1999), Nigeria's economy at the crossroads, Africa Recovery, Vol.13#1 (June 1999), p8 Read More