CHAPTER ONE:

INTRODUCTION

Background to the Study

Recognizing the need for change and leading organizations through that change is one of the most challenging for any leadership. Change is the only constant in today‟s life for individuals and organizations. Some changes can be reversible while others are not hence the risk involved in managing change. Change management should be effective, for example have the ability to move freely, have the ability to influence others, and directing the working forces in the target systems and administrative units (Burnes, 2002). Bernstein, (2009) argue that all organizations are currently undergoing some type of change. Many of these change programs arise from management such as culture change, business process engineering, empowerment and total quality.

This study was guided by stakeholder theory and resource based theory. Stakeholder theory is significant in identifying critical stakeholders in the environment of the change management practices in order to define developments for strategy. Moreover, in the contexts of business ethic and corporate social responsibility, stakeholder analysis has been used to identify important areas of concern. The resource-based theory stipulates that in strategic management the fundamental sources and drivers to firms‟ competitive advantage and superior performance are mainly associated with the attributes of their resources and capabilities which are valuable and costly to imitate (Mullins, 1999).

Banks are operating in a very dynamic marketplace today and this requires the ability to choose the right change opportunities while demonstrating the necessary degree of flexibility to meet the fluid requirements of the organization over time (Barbaroux, 2011). The ability to select change management initiatives that are aligned with the organizations strategic direction is fundamental for success. According to Thompson (1997), strategic change arises out of the need for organization to exploit existing or emerging opportunities and deal with threats in the market. The banking industry has not been left behind in this process.

Change management as defined by (Lewis and Seibold, 2008) is a process involving unfreezing, moving, and refreezing values, practices, and procedures within organizations. Unfreezing refers to the creation of a perceived discrepancy between the existing and ideal state of an organization that generates a desire for change and lowers people‟s resistance to change. Moving refers to the various processes such as training, education, and restructuring that lead to the development of new behaviors, attitudes, and beliefs. Refreezing regards reestablishing a new state of equilibrium within the organization by stabilizing the new patterns through a variety of support mechanisms. Moran and Brighton (2011) defined change management as the process of continually renewing an organization direction, structure and capabilities to serve the ever-changing needs of external and internal customers. Burnes (2004) like many others scholars asserted that change is a present feature of organizational life, both at the operational and strategic level. Due to its importance, change management is becoming imperative and needs appropriate managerial skills and strategy.

Most organizational managers today would agree that change has become a constant phenomenon, which must be attended to and managed properly if an organization is to survive. Changes in technology, the marketplace, information systems, the global economy, social values, workforce demographics, and the political environment all have a significant effect on the processes, products and services produced. The culmination of these forces has resulted in an external environment that is dynamic, unpredictable, demanding and often devastating to those organizations, which are unprepared or unable to respond (Burnes, 2004).

When change is announced in an organization, there is a general hope and feeling among the staff that the outcomes will be favorable to them (Kimaku, 2010). The norm indicates that most employees expect a positive outcome and their management will consider their needs. This also applies to new ideas, products or service. Therefore, trust becomes a key factor in determining how employees think, feel and act in respect to the current change (Sikasa, 2004). He further states that trust is the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or confront that other party. Eriksson and sundgren (2005) introduce another angle on the issue of change management where they lay emphasis on organizational culture. Mostly, culture is ignored and assumed to have a life of its own. Behavior determines a large part of the expected outcome of change. According to Davis and Holland (2002) Culture comprises the shared values, understandings, assumptions, and goals that are learned from earlier generations, imposed by present members of an organization, and passed on to succeeding generations.

This is hugely exhibited during on job training, where a new worker is instructed that the processes are carried out in a certain way and the same should be upheld. Limitations in change management are associated with the management‟s perceptions of the need for change, the opportunity to change and the way to change Hoffman and Woody (2008). Change agents, usually managers and change recipients, usually employees need to work together to drive change (Gakere et al., 2012). This is usually not easy to achieve as change recipients are known to bring up unreasonable obstacles or barriers that block the change process. This assumption gives away change recipients as a weak link, hence easily blamed for failures.

Employee performance is attitude towards work-related conditions, or aspects of the job. Senge, (1990)  was  of the  view  that employee performance  is more  of  a response  to  a specific job. Employee performance is an important element from organizational perspective, as it leads to higher organizational commitment of employees and high commitment leads to overall organizational success and development (senge, 1990). Employee  performance  has been  found  to be  associated  with  organizational  trust  and help increase employee performance (  Arnett  et  al.,  2002).  Employee  performance  also  serves  as  a significant  predictor  in  organizational  commitment   and retention (Kim et al., 2004). When employees  are  satisfied  with  their  job,  they  are more willing to provide service that exceeds  customers‟  expectations  and  positively influence customers‟ attitude towards their service. In contrast,  employees who are dissatisfied with  their  job are  likely  to have  more  occupational  stress  and  be less productive (Skinner and Champion (2008). Thus, highly committed, high performing ,and happy employees are valuable resources to the hotel sector.