Effect of Management Change | Case Study

Effect of Management Change | Case Study 1.1 BACKGROUND Change has always been with man from creation. Man and plants have evolved and adapted to the environment anytime the need arises. Failure to change, most often than not leads to extinction. The general perception is that changes are made always for the better, but sometimes, it is for the worst. At other times also, there is no need for change. Change is an inevitable phenomenon. A system would have to undergo change at some point in time. The effectiveness of the change to a large extent depends on how it is managed. For an organization to survive, it is necessary for it to continue to adapt to its changing environment. Change is the singular factor that upgrades a system to suit its current environment. Change in management is one typical way of effecting change. Change in management can take the form of privatization, re-shuffling or merging. Most times, old managers leave with their ideologies and new managers come in with new ones. Vodafone Ghana is one company in the Telecommunication Industry which has experienced management change in recent times. Vodafone Ghana, formerly Ghana Telecom, was the national telecommunication company of Ghana. In 2006, it had around 400,000 customers for fixed and mobile telephony and internet services. On 3rd July 2008, the sale of the company for $900m to Vodafone group was announced. After the transaction closed, Vodafone had a 70% stake in the company, while the Ghanaian Government retained a 30% stake. On 16th April 2009, the company was rebranded as Vodafone Ghana. The rebranding, seeks to lead to a stiff competition among the operators in the Ghanaian mobile market. 1.2 PROBLEM STATEMENT. Changes in almost all organizations are not freely welcomed by the organization members. The reluctance to change is mostly as a result of fear of the unknown. Changes in management in organizations are resisted by staff for lack of knowledge of the impact the change will bring. The impact could be positive or negative. The change will at the tail end affect the performance of the staff and for that matter the organization as a whole. Change in management actually changes the status quo of how things are done. How the change is managed to get everyone along is crucial to the effectiveness of the organization. The performance of the organization is also translated in the response by the organizations external customers, government and regulatory bodies to the change. 1.3 PURPOSE/AIMS The purpose of the study will be to assess the performance of Vodafone Ghana, as there has been change in management. The research will assess the performance of the then Ghana Telecom and its management team for the last two years and do a comparative analysis with the performance of the now Vodafone Ghana and its new set of management team. At the end of the study, the research will find out which of the two management teams led to a higher performance of Vodafone Ghana. 1.4 OBJECTIVES OF THE STUDY The objectives of the study will include the following; To identify the effect of change in management on the performance of Vodafone Ghana. To identify the factors that necessitated the change in management of Vodafone Ghana. To ascertain the challenges of the process (change in management) and how it was managed to ensure that it is on track to achieving the required performance. 1.5 SIGNIFICANCE OF THE STUDY It is believed that, the results of this study will do the following; Enable internal and external customers to know how the management team of the then Ghana Telecom fared in the last two years of their being as against the first two years of Vodafone Ghana. Inform the current management team of their performance in Ghana as far as Vodafone Ghana is concerned. Serve as a source of secondary data for further research in the area of change in management. 1.6 RESEARCH QUESTIONS AND HYPOTHESIS The research question for this study will be: What are the effects of Change in Management on the Performance of Vodafone Ghana? The null hypothesis for the study will be: Ho: change in management does not significantly affect performance. The alternative hypothesis for the study will be: H1: change in management significantly affects performance. 1.7 SCOPE AND ORGANISATION OF THE STUDY The research will be grouped into five chapters. The first chapter is Introduction. The introduction will include an overview of the background of the study, the focal point of the statement of the problem, an explanation of the study, key objectives of the study, the reasons for the study, the question and hypothesis. The second chapter will review literature, that is, the theoretical and the empirical. It will explain relevant theories that relate to the subject area as well as give a description of literature that has been practically observed and validated objectively on the subject matter. It will again explain certain terms in the research. The third chapter will present the methodology. It shall give a general description of the design of the work. It will include population and sampling, instrumentation and statistical analysis. The fourth chapter will be results and discussions, where data collected will be analyzed and findings experimented. The fifth chapter will draw conc lusions and give recommendations. LITERATURE REVIEW It is often said that two heads are better than one. Most often than not, we see individuals coming together to undertake projects that cannot be done individually. One of the most known ways is through organization. An organization according to (Robbins Coulter, 1999) is a deliberate arrangement of people to accomplish some specific purpose. Organizations in trying to accomplish their goals get proper management systems in place. 2.1 THEORETICAL LITERATURE DEFINITION Management is the process of achieving organizational goals by engaging in the four major functions of planning, organizing, leading and controlling. Bartol Martin (1998). Bartol and Martin emphasized on the fact that, it is an ongoing process that begins with planning and ends with controlling. It never ends because the controlling checks if the organization is on the right path as far as the plans (objectives) are concerned and as such, the results serve as input again in the process. Robbins Decenzo (2001) also defined the term management as the process of getting things done, effectively and efficiently, through and with other people. Like Bartol and Martin, the process in their definition pointed to the four main functions of management. Thus planning, organizing, leading and controlling. However, they believed that managers should not only be able to engage in the four major functions but managers should be able to do that simultaneously as the functions are interrelated and interdependent. Efficiency in their definition means making best use of the resources available. This brings into play the scarcity of the resource which has numerous uses. It is always prudent to minimize waste as much as possible when using these resources. Minimizing waste in the use of resources will lead to high productivity and efficiency. Effectiveness means choosing the right goals, strategies and tasks in a present condition. In essence, effectiveness is doing the right things while efficiency is doing things right. There are two well known ways of achieving efficiency and effectiveness which are; The organization increasing the output with the same level of input. The organization producing the same output with a reduced input level. Koontz Weihrich (1990) also defined management as a process of designing and maintaining an environment in which individuals working together in groups efficiently accomplish selected aims. Koontz and Weihrich like Robbins and Decenzo, and Bartol and Martins, believed that managers engage in the main functions of planning, organizing, staffing, leading and controlling. They also believed that management does not necessarily apply to a particular organization but rather, all kinds of organizations. Aside that, they believed that irrespective of the level a manger finds himself he needs to manage. They also underscored efficiency and effectiveness in trying to achieve the set goals. They however, believed that all managers focus on making surplus. This may not be necessarily true as some managers are found managing non-profit making organizations. Most managers in non-profit making organizations normally focus on the well-being and satisfaction of some people rather than making profit. All the stated definitions basically emphasize on management being putting in place the right atmosphere and conditions so that the set goals can be accomplished. All the definitions also highlight the major functions that are performed by managers and the fact that it should be done in an efficient and effective manner. Management is therefore a phenomenon that applies not only to organizations but also the daily lives of individuals. MANAGERS Managers are individuals who are engaged in the combination of the four functions of management to accomplish organizational goals. LEVELS OF MANAGEMENT Managerial jobs in organizations allow for the categorization of managers into three levels. Top Managers: It is the highest level and concerned with creating the organizations goals, overall strategy and operating policies. (Griffin, 1999). According to Rue Byars (2003), Senior management are not involved in the organizations day to day problems, but concentrate on setting the direction of the organization. Jennifer M George (2004), argued that top managers are responsible for the performance of all departments and therefore a cross departmental responsibility. Top managers are responsible for the successes and failures of the organization and most often have their performance scrutinized by the organizations internal and external customers. In Management by Robbins Coulter (1999), top managers are responsible for making organization-wide decisions and policies that affect the organization. Middle Managers: Managers at this level are responsible for the implementations of policies and plan drafted by top management and playing a supervisory role and co-coordinating the activities of the lower-level managers. Griffin (1999). According to Jennifer M. George (2004), middle level managers are responsible for finding the best way to organize human and other resources to achieve the organizational goals. To increase effectiveness, they evaluate the goals that the organization is pursuing and make suggestions to top managers. First Line Managers: The managers at this level are placed at the base of the managerial hierarchy and are often referred to as supervisors. They are responsible for the daily supervision of the non-managerial employees who perform many of the specific activities necessary to produce goods and services. They work in all departments of an organization. Jennifer M. George (2004). Its argued by Griffin (1999), that the common titles held by managers at this level are supervisors, coordination and office managers. These positions are often first held by employees who enter management from the ranks of operating personnel. According to Bartol Martin(1998), first line managers are extremely important to the success of the organization due to the special role of seeing to the day to day activities of the organization. These managers operate at the interface between management and the other work force and due to this can easily find themselves in the middle of conflicting demands. MANAGERIAL SKILLS Due to the validity and difficult nature of a managers job, certain skills are required to successfully carry out the duties and roles of a manager. Research by Robert L. Katz, during the early 1970s identified three essential skills or competencies needed by managers. The importance of these skills varies according to the managers level within the organization. Technical Skills: These are skills that reflect both an understanding of and a proficiency in a specialized field. Bartol Martin (1998). These skills are needed by both first line and middle level managers in their operations. It becomes less important as a manager moves into a higher level of management. However, top managers need some percentage of proficiency. For instance, an accountant must be proficient in the rules and standards of accounting, and be able to help its clients when faced with problems relating to the duties. Robbins Coulter (1999). According to (Bartol Martin, 1998) the technical skills are needed most by first line managers since they are directly involved in the supervision of the technical and professional employees, who are not managers. Middle level managers also need sufficient technical skills to recognize major problems. Top level managers will need some technical skills especially when technology is an important part of the product or service the org anization is offering. Human Skills: These are skills associated with a managers ability to work well with others, both as a member of a group and as a leader who gets things done through others. Bartol Martin (1998). Managers deal with humans and therefore need human skills to function effectively. Robert L. Katz indicated that, human skills are more important at the top level than the lower level. Managers with good human skills are able to get the best out of their people. How to communicate, motivate, lead and inspire enthusiasm and trust are some good human skills that managers should possess. Robbins Coulter (1999). Bartol Martin (1998) argued that human skills are needed by all the three levels of managers, since they deal with humans, and get things done through them. Managers without sufficient human skills are likely to have problems with internal and external customers. Conceptual Skills: These skills are related to the ability to visualize the organization as a whole, discern interrelationships among organizational parts, and understand how the organization fits into the wider context of the industry, community and world. Bartol Martin (1998). Conceptual skills are needed by managers for effective decision making that will positively affect the organization. Robert L. Katz proposed that these skills become more important as a manager moves into top management position. MANAGEMENT SKILLS AT DIFFERENT HIERARCHICAL LEVELS. SOURCE:BARTOL AND MARTIN, 1998 Griffin (1999) states that, the skills needed by a manager to perform activities go beyond the three skills. Four other skills are expected of a manager. They are; Diagnostic skills Communication skills Decision-making skills Time management skills WHAT MANAGERS ACTUALLY DO. Henry Mintzberg, a management scholar observed the activities of several top managers and discovered the work methods of managers as well as the major roles that they play. EXTENDED MODEL OF THE MANAGEMENT PROCESS. Management scholars Steven J. Carroll and Dennis J. Gillen went beyond the four major functions of management. These functions were used to form basis for the establishment of the managerial process. These management gurus upon their review of major studies on managerial work identified several key elements in the management process. There was the addition of work agenda, work methods and roles fused into the core management functions with a managers knowledge base and key management skills being contributing factors to high performance. WORK METHODS Mintzberg found that in their actual work methods, the managers differed drastically from their popular image as reflective, systematic planners who spend considerable quiet time in their offices poring over formal reports. Bartol Martin (1998). Three of the findings of Mintzberg give the revelation of what high-level managers actually do. UNRELENTING PACE: Managers are very busy people who work from dawn to dusk and are engaged in several activities. BREVITY, VARIETY AND FRAGMENTATION: Managers are very brief in their activities like meetings, attending to telephone calls, addressing the issues subordinates continue to bring to interfere with their work. VERBAL CONTACT AND NETWORKS: Managers prefer verbal communication through either phone conversations or meetings to written communication using memos and formal reports and rely heavily on networks to obtain and transmit information. MANAGERIAL ROLES According to Kreitner (1989), a research was conducted by Henry Mintzberg who concluded on what managers actually do. Mintzberg criticized the traditional functional approach as unrealistic, as they tell little about what managers actually do. Many other authors agree with Mintzberg and believe that the functional approach portrays the management process as far more systematic and rational and less complex than it really is. Mintzberg and his team said that to study managers and to know what they do, it is good to focus on the key roles they play, using a method called structured observation. This method involves recording the activities and correspondence of five top-level executives. Mintzberg identified ten roles he believed are common to managers at all levels. These ten roles are grouped into three categories. They are; Interpersonal Roles: This is the role that involves interpersonal contact with subordinates and peers. Figurehead, Leaders and Liaison are the interpersonal role managers play. Figurehead Role. It represents a symbol of legal authority and involves the performance of certain ceremonial duties like signing documents and receiving visitors. Leader Role. It seeks to motivate workers to get the job properly done Liaison Role. It serves as a link in a horizontal and vertical chain of communication. Informational Role. This is the role that provides information relating to the task. This role is important because information is the lifeblood of organizations, and includes nerves center, dissemination and spokesperson roles. Nerves Centre. It serves as a focal point for non routine information; receiving all type of information. Disseminator. Deals with the transmission of information to subordinates. Spokesperson. Deals with the transmission of selected information to outsiders. Decisional Role. With this role, managers balance competing interests and make choices. It enhances the development and implementation of strategies. The decisional roles are entrepreneurs, disturbance handlers, resource allocators and negotiators. Entrepreneur: Designs and initiates changes in the organization. Disturbance Handler: Takes corrective action in non routine situations. Resource Allocator: Takes decisions on allocation of resources to individuals and units. Negotiators. Participates in negotiation sessions with other parties like vendors and unions to make sure the organizations interest are adequately represented. Jones George (2004) in their book Essentials of Contemporary Management outlined Mintzbergs ten managerial roles. However, information technology has major effects on how managers perform their roles and on the skills they develop to perform the roles effectively. CHANGE The dynamic nature of business organizations naturally brings change. It is imminent for organizations to focus on change with competition increasing both domestically and globally. Companies that were enjoying mono-power are now been faced with competition from all the corners of the world. Bartol Martin (1998) defined change as any alteration in the status quo. They identified innovation to be one of the most applied forms of change. Innovation according to Bartol Martin (1998) is a new idea applied to initiate or improve a process, product or service. Hardly do people (employees) accept management action that endeavors to facilitate change as the existing processes and procedures may be seen consummate. The management of change in an organization has become an area of possible conflicts because of problems of understanding and communication. John Harvey-Jones (1993) stated that, it is impossible to change organizations which do not accept the dangers of their present way of doing things. A managers ability to manage change efficiently in an organization has become an indispensable skill in todays management. FORCES OF CHANGE A variety of forces influence change in an organization. Some of these forces are external whiles others may be developed internally. Recognizing and adapting to internal and external changes can mean the difference between continued success and going out of business. EXTERNAL FORCES All organizations are open systems and they therefore interact with the external environment of which they are part. The following factors may necessitate change: Escalating competition and globalization. Rapid development in new technology and the information age. Increased government regulation pressure. Scarcity of resources. Increased demand for quality. Increased demand for high levels of customer service and satisfaction. INTERNAL FORCES Internal forces for change also develop from a variety of sources. Some of these sources include; Ethical difficulties that arise because of employee behaviors. Decisions that entail changes and innovation. Organizational culture shifts. Reorganization. PROCESS OF CHANGE The process of change is likely to be associated with certain features. Hannagan (2004) in the book, Management Concept and Practices outlined the features as uncertainty about the causes and effect of change, unwillingness to give up existing practices, and awareness of problems in the change process. These characteristics according to Hannagan arose from a natural reaction to; Deny that the change is necessary. Resist any change irrespective of the merits. Avoid changes when they are introduced. Hannagan further suggested that managers should be able to determine the actual causes of change and remain flexible enough in their approach to overcome them in an appropriate manner. In the process of change, it is prudent to consider the degree of interaction between independent variables in the organization. The workers, technology and the organization structure seriously depend on each other and they therefore need to be recognized in the change process. The task of the manager is to direct energy away from feeling of powerlessness and looking backwards and towards seeing the opportunities for the future. This is important because in the process of change, people are likely to be threatened by the future while they need to recognize the dangers in the present position and the opportunities in the new ones. The process may involve denial of the need for change and resistance to it, until the change is able to be explored when opportunities will be discussed and commitment created. Hannagan (2004) outlined that the experience of the feeling of loss can take the following forms; Security: People feel unsecure of their position in the organization and how it will change. Competence: Becoming worried about their ability to carry out new tasks. Relationships: They may feel the familiar contacts will be lost with other employees, with managers and teams and groups. Territory: They may feel uncertain about their work space or job responsibility. Direction: They lose a clear view of where they are going. It is important that the manager reckon that these feelings are part of the transition process. It is the task of management to recognize these sentiments and endeavor to minimize it. This transcends provision of information as workers are not likely to change their behavior simply because they have being told. Change therefore needs to be managed carefully. TRANSITION IN THE CHANGE PROCESS From denial and resistance to exploration and commitment. SOURCE: MANAGEMENT CONCEPTS AND PRACTICES, 4TH EDITION BY TIM HANNAGAN. CHANGE MANAGEMENT It is obvious that a system that is not functioning well needs to be changed. The effectiveness of the change however to the large extent depends on how it is managed. Change aims at moving organization from the current position to place it in a desirable way in which its objectives can easily be accomplished. For the change to achieve its purpose it need to be managed properly. Hannagan (2004) outlined the various steps; Vision: A process of reminding everybody and clarifying to everybody the direction of the organizations. Strategy: Outline how this is to be achieved through the development of objectives and goals. Monitoring change: Progress is measured in order to observe and encourage change. Different strategies are developed and implemented depending on the stage of the change. At the stage of denial, the manager has to provide information and give time in order to explain the information and advocate action. Also at the resistance stage managers have to accept peoples response and encourage support. In the exploration stage, the manager needs to focus on the priority, train people involved in the planning. In the commitment stage of the process, long-term goals are established with emphasis on building team. SOURCE: MANAGEMENT CONCEPTS AND PRACTICES, 4TH EDITION BY TIM HANNAGAN PERFORMANCE People run and steer the affairs of organization. People are the main underpinning for goal setting and objectives accomplishment. The performance of an organization thus depends on the sum total of the performance of its members. Pattanayak (2006). Pattanayak believed that the success of an organization will depend on how it accurately measures performance of its workers. He further argued that the performance of an employee is his resultant behaviors on task which can be observed and measured. Performance refers to the contribution made by an individual in the accomplishment of organizational objectives. Pattanayak (2006). The performance of individuals in an organization is the resultant behavior on task which can be observed and evaluated. Normally organizations assess performance by looking at quantity, time of completion, cost involved and most importantly quality. One way of urging people to work in an organization is giving them feedback on the results of their action. It is important that feedback on both success and failures are provided on regular basis. Most organizations use performance appraisal systems or techniques in trying to provide feedback. PERFORMANCE APPRAISAL Pattanayak (2006) acknowledged that performance appraisal system provides management an opportunity to recall as well as feedback to people as to how they are doing, so that they can correct their mistakes and acquire new skills. Pattanayak defined performance appraisal as all those procedures used to evaluate the personality, the performance, and the potential of its group members. Performance appraisal techniques used could either be formal or informal. INFORMAL PERFORMANCE APPPRAISAL Pattanayak defined informal performance appraisal as a continuous process of feeding back information to the subordinates about how well they are doing their work in the organizations. Pattanayak believed that it is normally conducted on the day-to-day basis. FORMAL PERFORMANCE APPRAISAL Pattanayak argued that formal performance appraisal occurs usually annually on a formalized basis and involves appraise and appraiser in finding answers to the following questions. What performance was set out to be achieved during the period? Has it been achieved? What has been the shortfall and constraints? What are we going to do now? How will we know that we have done it? What kind of feedback can be expected? What assistance can be expected to improve performance? What rewards and opportunities are likely to follow from the performance appraisal? EMPIRICAL LITERATUIRE Change has always been part of organizations. Day in and day out, organization are seen trying to adapt to a changing environment. A study by Agudze, Simon and Sunu on the influence of price on customer loyalty of selected supermarkets in Accra outlined the fact that organizations are affected by change in price. The study revealed that Melcom will lose 42% of its customers if prices should increase (change), at Game it was realised that 62% of their customers will stop buying if prices increase (change), and at Maxmart the survey showed that 50% of their customers will not purchase from the shop if prices should increase. Also on a thesis by Hans-Jà ¼rgen Brà ¼ck on the impact of organisational change management on the success of a Product Lifecycle Management Implementation -an investigation into the Electronics Manufacturing Industry, 59% of the respondents to the eighth questionnaire indicated that productivity is slowed down a little bit in the phase of implementing change, whereas 35% did not realize any negative influence on productivity. However, 6% indicated a significant decrease in productivity. The research also brought out the fact that vision is very important in the change process. The researchers fourth questionnaire focused on vision which half of the respondents indicated that it was very important. Moreover another survey by Natalie L. Petouhoff, PhD, Tamara Chandler, and Beth Montag-Schultz on The Business Impact of Change Management revealed that Organizational Change Management (OCM) programs have significant effect on Returns On Investment (ROI). The survey showed that ROI was 143% percent when an excellent OCM program was implemented. ROI however was 35% when OCM program was poor or there was no OCM program at all. 3.0 METHODOLOGY 3.1 RESEARCH DESIGN The study will be cross sectional as data collected from the field will be used within a short period of time. The study will take a period of nine months to be completed. The purpose of the study shall be descriptive in nature as a gap will be dealt with and employ both qualitative and quantitative techniques. The qualitative research will be based on knowledge, views, perceptions, observations and opinions of the effect change in management will have on the performance of Vodafone Ghana. The quantitative research shall also be based on the design and issue of questionnaires to customers, top management and employees to solicit for the objectives of the topic that will be expressed in terms of figures for the study. 3.2 POPULATION OF THE STUDY The population of interest for the study shall include all employees and customers at Vodafone Ghana. 3.3 SAMPLE FRAME The sample frame for the study will be all Vodafone customers within the age bracket of 20 to 40 years in Accra and selection of employees at Vodafone Head office at Circle. The reason for the chosen sample is due to the fact that, the study seeks to investigate the performance of Vodafone