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Assessing the relationship between
employee’s perception of change,
organizational commitment and structural
empowerment in steel manufacturing
company.
S Mokaba
orcid.org 0000-0002-8003-0095
Mini-dissertation accepted in partial fulfilment of the
requirements for the degree
Master of Business Administration
at the North-West University
Supervisor: Mrs N Khumalo
Graduation: May 2020
Student number: 28292308
2 Declaration
I declare that the work in this mini-dissertation is my own personal work. I further declare that apart from the guidance that has also been acknowledged, the information contained in this mini-dissertation is the information that I researched myself. It is being submitted in the partial fulfilment of the requirements for the degree Master in Business Administration at the North West University. It has not been submitted before for any other degree or examination to any other University.
I also declare that nobody but me is responsible for the final version of this mini-dissertation.
Solomon Mokaba
3 Acknowledgements
I would like to acknowledge the contributions of following organisations and individuals for assisting me with the completion of the mini-dissertation:
To my wife Reitumetse, thank you for all your support, understanding and sacrifices you made during this period. It has been a long road and you have supported me every step of the way.
To my former employer ArcelorMittal, for giving me the permission to conduct the research in the company and for use of internal company information to complete my studies. `
To the North-West University School of Business and Governance for the skills and knowledge imparted to me over the last three years.
To my supervisor Ms N Khumalo for the guidance and assistance during the entire period of writing, compiling and finalizing this mini-dissertation.
To Prof. Suria Ellis from the Statistical Consultation Services for her inputs into the research questionnaire as well as the statistical analysis of the data collected.
4 Abstract
The primary research objective aimed to assess the relationship between employee perception of change and the level of employee’s organizational commitment, and whether the implementation of change management had affected employee level of commitment to the company.
The research population was individuals employed in an international steel manufacturing industry operating in South Africa. A research questionnaire was developed and circulated to a sample of 1176 employees, of which 282 responses were received. The responses were collated into an excel data sheet and were statistical analysed by the Statistical Consultation Services of the North-West University. The statistical analysis to a large extent confirmed the validity and reliability of the questionnaire. A data reduction method, Cronbach’s alpha was performed as an exploratory factor to group the question into constructs.
The findings showed organisation commitment, perception on change and structural empowerment where found to a greater extend related. Positive relationship found implies that employees resist change as they fear they are to be trained when the change comes at the same time fearing communication culture will be changed as a result of the change. Base on the regression analysis it was found that change readiness was found to be affected positively by age, access to information, affective commitment, organisational valence, perception on communication and training change. The findings further showed a positive relationship between readiness to change and access to information hence structural empowerment.
In conclusion, we can say the study achieved its primary research objectives, and recommendations for future research have been included in Chapter 5.
Keywords
Steel, change management, commitment, structural empowerment, restructuring.
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TABLE OF CONTENTS
CHAPTER1:INTRODUCTION 7
1.1BACKGROUNDOFTHESTUDY 7
1.2.PROBLEMSTATEMENT 9
1.3.AIMANDOBJECTIVEOFTHESTUDY 10
1.4.RESEARCHQUESTIONS 10
1.5.SUMMARYOFRESEARCHMETHODS 10
1.6.DEMARCATION/DELIMITATIONOFTHESTUDY 12
1.7.STRUCTUREOFDISSERTATION 12
CHAPTER2:LITERATUREREVIEW 13
2.1INTRODUCTION 13
2.2CHANGEMANAGEMENT 13
2.3.ORGANIZATIONALCOMMITTMENT 20
2.4STRUCTURALEMPOWERMENT 28
2.5CONCLUSION 32
CHAPTER3:RESEARCHMETHODOLOGY 33
3.1INTRODUCTION 33 3.2.PARADIGM 33 3.3.RESEARCHMETHODS 33 3.4.RESEARCHDESIGN 34 3.5.POPULATION 35 3.6.SAMPLEMETHOD/TECHNIQUE 35
3.7.DATACOLLECTIONINSTRUMENTS 35
3.8.DATACOLLECTION/FIELDWORK 37
3.9.DATACODING/ANALYSIS 37
3.10.LIMITATIONOFTHERESEARCH 38
3.11.ETHICALCONSIDERATION 38
3.12.CONCLUSION 40
CHAPTER4:PRESENTATIONOFFINDINGS 41
4.1INTRODUCTION 41 4.2ANALYSISOFVARIANCE 41 4.3RELIABLITYOFANALYSIS 45 4.4.DESCPRIPITIVEINFORMATION 45 4.5CORRELATIONANALYSIS 49 4.6REGRESSIONANALYSIS 51
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4.7.INTERPRETATIONANDDISCUSSIONOFRESULTS 53
4.8.CONCLUSION 59
CHAPTER5:CONCLUSIONSANDRECOMMENDATIONS 61
5.1INTRODUCTION 61
5.2FINDINGSFROMTHESTUDY 61
5.3CONCLUSIONS 63
5.4RECOMMENDATIONS 64
5.5AREASOFFUTURERESEARCH 65
LISTOFREFERENCES 66
7 CHAPTER 1: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Change management has received considerable attention across the globe owing to the huge role, which it plays (Alvesson and Sveningsson, 2016). Globally companies are facing challenges with external forces such as fluctuation of exchange rates, inflation, changes in tax and government policies, technological changes, and changes in international trade laws among other factors (Blonigen 2015). A number of global organizations have recognized the huge role, which effective management of change plays in the realization of the benefits, which are linked to the given change initiatives. A number of the global organizations have realized that effective management of change is sometimes a key to putting organizations in a better position to be ready for the given change initiatives.
It also makes the organization to grasp the diverse types of change management required (Adeyeye, 2009). Through effective change management, global organizations are in a good position to implement a process for navigating the given change. It also ensures that there is clarity concerning the need for the given change among the stakeholders. It also communicates the necessity of the given change to the stakeholders. The numerous benefits, which are linked to effective change management, plays a major role in unprecedented rise in adoption management of change strategies by a number of the global organizations.
In Africa, change management has also gained considerable attention owing to the dire need for change by companies in order to be at par with the ever-changing business environments. A number of African companies have also realized the huge role, which is played by change management strategies in the realization of business goals and objectives. A number of organizations in Africa have shut down or made losses due to the inability to implement change (Bhorat, 2017). Example; Zimbabwean postal services provider had a chance to digitalize its operations but the workers refused the use of computers. Apart from that, some organizations lack financial resources as well as the modern technology to implement change in their production processes. This affects their operations since a number of businesses in Africa face myriad obstacles such as lack of collateral security to secure funding, volatile markets as well as political instability (Carvalho, 2017).
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South Africa has experienced an increase in competition for local companies due to increased presence of Multinational companies since the democracy in 1994. Most companies introduced measures to save costs and new way of doing business in order to survive (Ledimo and Martins, 2014). Some companies are continually restructuring their businesses, reducing number of employees and introducing lean organizations.
The steel industry in South Africa has been faced with many business challenges resulting from increased export, rapid technological advances, the ever changing business environment and other business uncertainties such as competition from substitutes and globalization (Mining Africa, 2017). As a result, these challenges have placed steel companies under increased pressure in both domestic and international markets.
The local steel industry is also facing probably the worst challenges it has seen in South Africa. The major producers in the primary steel sector have been beset by financial problems, the major steel producers in South Africa were the worst affected, with one of the major producer closing some of their operations in 2015 and another reporting losses in 2015, 2016 and 2017 (Mining Africa, 2017).
According to Roets (2016:p8-9), the primary reasons for the crippling conditions in which local steel producers are operating can be attributed to reduced consumption of steel in China and the resulting in lower global demand, a serious over supply of steel in the market due to the global recession, excess installed capacity and an increase of cheap steel imports from China into South Africa, and recently America introducing import duties on Steel imports.
As a result of this negative impact on the steel industry, in 2017 one of the major Steel manufacturing companies in South Africa announced a change process in all its major operations, which resulted in a curious situation among employees. There is a general assumption that after the change process, motivation and organizational commitment among employees will be low depending on the perception and commitment of employees to the change process and the level of structural empowerment to employees. According to (Wahab 2012) organisational change can adversely affect workers through increased stress, low morale, loss of control and direction, anxiety, eroded loyalty and a lack of commitment?
Employees are of the opinion that change will create a more stressful working environment and this can lead to low morale. Agarwal (2014) stated that “Unhappy people can seriously
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affect employee morale, irrespective of whether these employees leave or not these disaffected workers can damage the attitudes of other workers.” Negative feelings experienced by these employees will have an impact on quality of work, increase in absenteeism, cooperation with management, and the organization’s ability to attract the desired applicants.
1.2. PROBLEM STATEMENT
Organizations are compelled to restructure their business models based on the latest information and technological advances. These will depend on the way these advances affect business. In addition, competition in the world can also play a significant factor, which calls for constant change in the environments in which the businesses operate.
The numerous challenges, which the organizations face during the change management process to a great extent, hinder the overall success of the change management initiatives. At the same time, there are also indicators that corporations might not be implementing changes effectively thereby resulting in employee disgruntlement at all organizational levels (Roets, 2016). It is imperative to study how the companies can introduce changes gradually. Managers must be knowledgeable with the change management process and the changes to be implemented. This is because they may be required to assist the lower echelons to accept the changes and also to be confident in employing the most appropriate actions should the need arise.
While effective management of change has so many benefits, many organizations still face various challenges during the implementation of the change management process. Limited researches were carried out to explore the role which perception of change among the employees affects the whole change management process. The study will therefore provide answers to the relationship between employees’ perception of change, organizational commitment and structural empowerment. Additionally, while employees’ commitment to change has enormous contribution towards successful change management, limited research has been carried out to assess the link between employee perception to change, organizational commitment and the level of structural empowerment to employees
10 1.3. AIM AND OBJECTIVE OF THE STUDY 1.3.1 Aim of the study
The aim of the research was to assess the relationship between organizational commitment, employee perception of change and structural empowerment in a manufacturing steel company in South Africa. The general understanding is that worker’s commitment to an organisation will differ according to the attitude of the employees towards that organization.
1.3.2 Objectives of the study
The objectives of the research are: -
● To assess the perception of employees to change process.
● To assess the relationship between the employee’s perception of change and the level of organizational commitment among employees
● To assess the relationship between commitment to change and structural empowerment of employees.
1.4. RESEARCH QUESTIONS
● What are the perceptions of employees to the process of change management? ● What are the relationships between employee’s perception of change and
organizational commitment?
● What are the relationships between organization commitment and structural empowerment?
1.5. SUMMARY OF RESEARCH METHODS
The study consists of a literature review of existing sources related to change management, organisational commitment and employee structural empowerment. In the study quantitative research design was used. The unit of analysis comprised of a sample of the population. Data was collected via electronic questionnaires and hand distributed hard copies. The statistical analysis and inferences were used to formulate the conclusions.
The study followed the cross-sectional approach because change management, organisational commitment and employee’s structural empowerment were regarded as once-off events.
11 1.5.1 Unit of analysis
The population used were employees currently employed by the steel manufacturing company in South Africa. The populations consist of the following characteristics: -
● All races in South Africa ● All genders
● All levels of employees excluding low levels employees ● Employees of all ages between 18 and 63
● Limited to only permanent employees, contractors excluded.
The unit of analysis was based on the individuals in company. Data was obtained via emails and hard copies as some of the employees in the unit of analysis did not have access to the internet and email of the company. Email addresses were obtained through the relevant permission from management and hard copies were distributed also through the permission of the Vanderbijlpark management. A sample of 1176 employees was selected, and 282 responses were received.
1.5.2 Data collection
Data was collected by using questionnaires. The questionnaires were adopted to include introductory section regarding the participant’s demographics, followed by specific questions regarding the primary research question, firstly on perception of change management, the organisation commitment and lastly on employee structural empowerment. The participant’s responses were captured using a five-option Likert scale, including a neutral response option. Questionnaires were distributed to potential participants electronically by the internal email of the company and also through the hard copies at their areas of work.
1.5.3 Data analysis
Descriptive statistics was used to report on the demographical data collected. The results were used to determine whether the sample was a representative of the population identified. Descriptive statistics were used to determine the mean, variance and standard deviation values. Cronbach’s alpha was used to determine the reliability of the data collected. The North West University statistical department was used to assist with the research design, recommendations for appropriate statistical tests to be performed and with the analysis of the data.
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1.6. DEMARCATION/DELIMITATION OF THE STUDY
This empirical study focused on steel manufacturing company and the targeted population and the sample size were workers from the company. Apart from that, the study was solely based on the use of quantitative techniques. To add more, only the identified variables or factors were incorporated in the research instrument for data collection purposes. Geographical the unit of analysis were found in one of the major steel producing companies employing about 4200 permanent employees.
1.7. STRUCTURE OF DISSERTATION
This dissertation consists of five chapters described below:
Chapter 1: Background and scope of the study, what triggered this study and overview of
the steel industry. The section explores the background and justification for conducting the study. The problem statement and research objectives are detailed. The summary of the research methodology and the demarcation of the study are provided.
Chapter 2: The literature review explores the existing research on change management,
levels of commitment and structural empowerment. Different types of change management, levels of commitment and characteristics affecting commitment.
Chapter 3: Covers details of the research methodology and tools used to collect data and
the statistical data analysis. The chapter also details the methods used to determine the validity and reliability of the data.
Chapter 4: The data collected and the statistical analysis performed are discussed in full,
and the key findings are also discussed.
Chapter 5: The conclusions that can be drawn from the study are discussed, the details
of whether the study answered the primary and secondary research objectives are fully discussed. Recommendations are discussed and areas for potential future research are listed.
1.8.CONCLUSION
The chapter outlined the introduction, background and research objectives. In this chapter, the study’s importance and the research methodology used were discussed. Change management has become a way of our everyday life as everyday organisations are faced with challenges and strive for survival.
13 CHAPTER 2: LITERATURE REVIEW 2.1 INTRODUCTION
The literature review consists of a review of related research and literature available on the topic, however as the change management literature is quite extensive, the research will focus on the areas of change management, which is based upon a combination of three intact instruments of change; perceptions towards organisational change, organisational commitment and structural empowerment. Theoretical literature review is going to include the different theories and models of change management.
The literature review will also include the empirical literature review on change management. In this section, studies carried out by different people in the past will be discussed.
2.2 CHANGE MANAGEMENT
Change management is regarded as the systematic process, tools and strategies to manage the people-side of an organization with an aim of achieving efficiency and the required targets (Luoma 2015). Change Management comprises of events or activities such as the definition and instilling of novelty values, behaviours, attitudes, and norms in a company or organization so as to achieve desirable output, (Whitt 2017). Apart from that, the process also involves the art of building consensus between the clients and other relevant stakeholders. The last stage comprises of strategic planning, implementation and testing all transitional aspects from one organizational structure or business process to another (Prosci, 2014).
Change management has been described as a movement towards the changes that are expected by the company for the sake of improving efficiency and profitability (Rothwell, Sullivan and McLean, 1995 ). This definition should be one of the most appropriate definitions that should apply to the current research study being undertaken here.
2.2.1 Change management models
The following models are going to be used in this study: ⮚ Kurt Lewin Theory.
14 Kurt Lewin Theory
In the 1940s, Kurt Lewin developed the 3 phase model where changes in human behaviours occur; unfreezing, whereby individuals and organisations are willing to change. The moving stage is based on making the necessary change. Lastly the freezing stage is when the change becomes final. The theory was developed by Lewin and is based on three stages which are unfreezing, change and freeze. Lewin observed the importance of change and developed the model (Lewis, 1947). Under the unfreeze stage it is essential to establish the need for change in an organization. On the second stage, there will be need to effect changes and then deal with any anomalies that may arise. Lewin proposed that change happens when those forces restraining change are reduced rather than when those forces driving change are increased. Lastly, on the freeze stage the management should ensure that stability is maintained to ensure that organization runs smoothly (Lewis, 1947).
Kotter’s Eight Stage Process
Kotter developed the 8 process that can be used in effecting change management. The steps are:
⮚ Communicate that change is necessary.
⮚ Create the leading team that will effect change in organizations. ⮚ Design a clear strategy and vision for change.
⮚ Communicate the change plan to all interested stakeholders.
⮚ Empower workers and remove all systems that undermine new change. ⮚ Produce real results.
⮚ Maximize all benefits and effect more change in the organizations. ⮚ Depict the relationship between change and company success.
From all these process it is clear that organizations may need to follow them in the correct order to ensure that they yield meaningful results (Kotter, 2007). This model is a top-down approach and the top management plays a key role.
2.2.2 Empirical literature review on change management
Rissanen (2016) carried out a study that focused on change management. Interviews were used in this case study research and it focused on a hospital. Rissanen (2016) realized that change management had different effects on the workers and the organisations.
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On the worker’s side fear of change and possibilities of low morale were found to be effects of change. On the contrary, the organisations perceived implementation of change useful in coping with technological changes and cost minimization. From this research it is clear that introduction of change should be done in a systematic way to ensure that there is a balance between the workers and the organisations.
Boikhutso (2013) also carried out a research with a focus on change management. The qualitative study was based on the use of interviews for data collection. Boikhutso (2013) found out that change management failed due to poor implementation and lack of a holistic approach. Training, communication and effective management were seen as key solutions for the successful implementation of change. Rissanen (2016) and Boikhutso (2013) share similar sentiments on the importance of communication in effecting change in organizations.
Lastly, Al-Hadddad (2014) conducted a study that was based on an examination of successful organizational change. Surveys were used for data collection. Al-Hadddad (2014) found out that effective planning, good team leadership were key aspects essential for, implementing change in organizations. In short, Al-Hadddad (2014), Rissanen (2016) and Boikhutso (2013) share similar opinions on the need for proper planning.
Masunda (2015) also carried out a research on resistance to change for Telecoms Namibia. Data was collected through Interviews. Masunda (2015) discovered that low productivity was not experienced during the resistance to change phase. Apart from that, Masunda (2015) discovered that, “of lack of communication, lack of participation and involvement of employees, concerns about lack of skills and capabilities and fear of moving from their current position to a new position and new systems” were the key challenges that affected change management.
Communication is a major ingredient required for effective change management. All in all, change management is an essential part of organisations in achieving efficiency and profitability. It remains very clear that proper procedures should be followed in implementing change. Ledimo and Martins (2014) research on employee satisfaction during change but there exists a gap on the matter of employee commitment to change in the research. Other research by Marais and Hofmeyer (2013) studied whether restructuring was detrimental to institutional trust and commitment and structural empowerment were not viewed in-depth in that study.
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Fugate, Prussia and Kinicki (2012) investigated employee’s withdrawal from the change process on a global level but their recommendations were based on the role of managers during change as opposed to the human elements of employee participation. A number of organizations implement change management in a bid to improve efficiency as well as profitability. Depending on the needs of the organization, the process of change management can be executed in different ways and at unique intervals.
Frauenheim (2010) posted that managers must monitor workers’ commitment towards organizational change. This is deemed essential in ensuring that the employees are motivated and they deliver more is as far as the executing of their job responsibilities is concerned. This also implies that internal working conditions have a colossal impact on the change process and worker commitment to activities such as restructuring (Kasper, Muehlbacher, Kodydek and Zhang, 2012). Management has a task therefore of ensuring that workers are exposed a conducive working environment that guarantees productivity. (Kara, Usual and Magnini, 2012). The next discussion is going to be based types of change.
2.2.3 Types of Changes
This section will discuss the types of changes that an organization can undergo:
Emergent Change versus Planned Change
A change in organizations can occur intentionally or due to some planned events and the latter is called “Planned” change. On the other hand, a change in an organization can be emergent, in a form of an apparent, spontaneous and not planned (Hayes, 2014). The next discussion is going to be cantered on developmental change.
Developmental change
Developmental change can be planned and emergent. It is change that develops the existing improvement areas of an organizations or a company (Turner, 2017). Such a change can be aimed at refinement of a skill or process in an organization and is called first order change. Transitional change is going to be looked at next.
Transitional change
Transitional change is regarded as the change that can be initiated by organizations with a sole aim of achieving a specific outcome (Kraus, 2016). This type of change is periodic, planned and radical. It can also be regarded as second order change.
17 Transformational change
Transformational change requires companies or organizations to transfer their assumptions in a new manner and inculcating the same to its employees or workers. Hakim (2012) posted that transformational change allows organizations to differ remarkably with regards to processes, structure, culture and corporate strategy. Organizations develop in a progressive mode that keep on learning, adapt and improve. Therefore, it can be concluded that there are two types of changes, which are planned change and happen change (Naderi, 2010).
Restructuring
Restructuring is regarded as the systematic managerial process of an organisation whereby the operational, legal, ownership and structures are changed for the purpose of increasing profits and efficiency (Peel, 2017). Other reasons for organisations restructuring could include changes to ownership or structure, mergers, or in response to critical changes to the business such as bankruptcy, takeovers, organizational repositioning.
Singh and Dixit, (2011) defines organizational restructuring as “altering of size and basic configuration of the organizational chart”. This process may involve the reduction of employees that is needed by the organisations to operate effectively by means of change management. Hakim (2012) posted that organizational restructuring consists of major changes to the organizational structure to assist in efficiency and effectiveness of the company. Business units are reorganized and resources rearranged within the organisations to contribute to increased performance
Marais and Hofmeyr (2013) argues that due to ever changing macro-environmental factors it has become a strategic requirement for organizations to restructure in order to realign internal structures. As a means to gain a competitive advantage over other organizations, the company needs to lead by example in establishing, entrenching, and living their values so that they are in a better position to obtain the trust and buy in from their employees.
Restructuring of organizations should only be done if the organizations are convinced that it will lead to optimal performance. Employees may disregard the importance of the process if they do not understand or see the need for restructuring. In order for organizations to strengthen it effort, it is very important that they communicate the process to the employees (Van Graan and Ukpere, 2012).
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Organizations can adapt to change through the restructuring process. Such a process can call for change on the corporate culture, and operation procedures. Van Graan and Ukpere (2012) further posted that workers must master new techniques at work places. Organizational restructuring has an effect on the entire components of a business entity and this can stretch to job security.
Positive outcomes should be endorsed as it would assist the company and the workers, therefore major changes should be properly addressed and employees be provided with support during the change management process (De la Sablonniere, Tougas, Debross, and De la Sablonniere, 2012). Fugate, Prussia, and Kinicki (2012) posted that there is need for management to ensure that the workers who remain in an organizations are well motivated to ensure that good production levels are met.
Fugate, Prussia, and Kinicki (2012) further posted that organizational changes can be viewed as ways of improving financial stamina of an organizations and competiveness in the market. However, it is important to note that the negative experiences for the surviving workers can be a stumbling block to the change management process.
This implies that the organizations should have proper strategies to deal with any problems that may arise after change has been effected. This will be advantageous in keeping the workforce motivated and to ensure a sound performance of the company at large. Demotions and redundancies of some workers are in some instances unavoidable as a result of organizations restructuring. However, this may pose a threat to the remaining workers in terms of job security. These feelings can cause employee withdrawal leading to employees seeking other job opportunities, increase in absenteeism and voluntary turnover (Fugate, Prussia, and Kinicki, 2012).
Furnari (2012) has indicated that when organizations undergo restructuring, it is vital that key employees are involved in the entire process as gaining input from employees will ensure greater acceptance, support and buy in, thus making the process to naturally materialize. However, change can put major pressure in the companies causing dissatisfaction and reduction in employee morale. Structural empowerment during change management process is going to be looked at next.
19 2.2.4. Employees resistance to change
The most commonly referred to negative attitude towards change management is often referred to as resistance to change. Varma (2019) posted that resistance to change can be caused by worker frustration and influence from informal groups and it can result in low profits, conflicts and low productivity. Reasons for resistance to change are outlined by Jones (2016), such as, people focusing on their own interest and not those of the organisation, misunderstanding of the change and its intention, fear of job losses.
Denst and Goldbert, in their paper entitled challenging resistance to change; describe resisting change as employees not entirely embracing changes that management wants to implement. They backup their research with previous research undertaken by Kotter (1995). Kotter (1995) realised that workers may be willing to accept change but some stumbling blocks often hinder the process and successful implementation.
In contrast the term readiness for change is described by Murrar (2019) as a precursor of resistance to change. Top management must locate gaps between own expectations and those of the workers. Observed gaps should be closed to avoid resistance.
Varma (2019) define need for change or as they sometimes refer to as discrepancy; the degree to which a worker feels that there are or are no concrete reasons and needs for the intended change. They outline that personally beneficial is the degree to which a person feels that with regards to benefits from the implementation of the prospective change, and define organisationally beneficial, or organizational-valence as the extent to which one feels that the organisation will or will not benefit from the implementation of the prospective change.
This model, assess’ and gauges preparedness on how a worker view change. Assessment of employees’ preparedness for change is an important element before launching change. Throughout the literature, readiness for change is usually considered in conjunction with methods for reducing resistance, however the literature is sparse in describing and defining how any organisation can tell when employees are ready for change. However, Muller (2019) outlined that worker preparedness is guaranteed if there is a sound structure and the environment is conducive.
20 2.3. ORGANIZATIONAL COMMITTMENT
Prosci, (2014) posted that workers exposed to a sound corporate culture have the potential of producing good results and can be very influential in solving problems in an organization. (Prosci, 2014) posted that diverse meanings have been attached to define commitment and there is no consensus on what it should encompass.
Kaur, (2014) posted that workers with low levels of commitment to change management in an organization may be absent on several occasions and may claim that they were sick. Such instances result in low productivity at work and even are short term workers are hired, the productivity may not rise since new workers will need to adjust and learn the environment. Mafini and Pooe (2013) in their research discovered that poor change management was the leading variable amongst worker whose commitment fell short. (Mafini and Pooe, 2013) posted that, employee commitment is affected by the interaction of a family of variables during the change management process.
These variables are: recognition, effective communication, co-worker relationship, financial and non-financial benefits, working conditions, organizational systems, policies and procedures and personal development to mention a few (Mafini and Pooe, 2013). From this discussion it is pellucid that, change management should be done in holistic approach and the aforementioned variables should be taken into consideration.
Porter et al (1974, p 604) define organisational commitment as “an attachment to the organisation, characterised by an intention to remain in it; an identification with the values and goals of the organisation; and a willingness to exert extra effort on its behalf”. Individuals value their own perceptions on how they align with that of the company. Cohen (2003) posted that “commitment is a force that binds an individual to a course of action of relevance to one or more targets”.
Miller (2003, p 73) posted that organisational commitment is “a state in which an employee identifies with a particular organisation and its goals, and wishes to maintain membership in the organisation”. According to this definition organisational commitment “is a psychological state that characterises the employee’s relationship with the organisation, and has implications for the decision to continue membership in the organisation”.
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The early model developed by Allen and Meyer (1990) has three-component base on their observation at that time. The three distinct themes at that time were: an affective emotional attachment towards an organization, which is affective commitment, realisation of costs related to being laid off, which are continuance commitment and a moral obligation to remain with particular organization that is normative commitment.
2.3.1 Affective Commitment
Employees are motivated by a conducive work environment and informal groups. Voet (2016)) posted that the more benefits for companies come from the affective commitment. Employees with outstanding performance have high affective commitment. Grodal (2019) described commitment as a dedication to the company’s goals and values.
They argued that an employee will develop an emotional attachment to a company when they identify with the goals and are willing to support the company to attain organizational goals. They further added that those with strong affective commitment are more likely to go the extra distance or show strong organizational citizenship behaviour as compared to employees with weak affective commitment.
Employees’ job satisfaction translates to meaningful commitment in the company (Brimhal 2019). It has been maintained that despite the emotional attachment that the employees will feel because of their high degree of affective commitment to the company, the employees will also develop association for that organization and will feel to be part of the organisation (Grodal 2019).
2.3.2 Continuance Commitment
This is commitment were employees tend to believe that they are in a fair economic exchange with the company by benefiting from the relationship with the company in material ways. The type of commitment is sometimes referred to as Structural Commitment in some literature, employees are enticed to remain in the company and there are also barriers preventing them from leaving. Chow (2019) defined continuance commitment as the awareness of the difficulty of choosing a different social identity due to enormous fines involved in making the switch. The costs associated with the employee leaving the organization as recognized by them is often describes as continuance commitment. Employees with strong continuance commitment remain aligned to the goals and vision of the organization.
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This form of commitment was presented originally by Becker (1960) as a “side bet” theory where he suggested that individuals will accumulate investments while working and the more they stay in that particular organization the more investments they will accumulate. Nonetheless, the individual’s investments become costly to lose in relation to the longer he/she stays with the organization. The investments include tenure, retirement, status and time, job effort and organization specific skills that may be hard to transfer to another organization (Grodal, 2019)
Even so, this form of commitment is a psychological attachment build by the employees’ perception of his/her losses in the event of leaving the organization hence prompting their decision to remain with the organization in a bid to continue to have their investments accumulated or rather not to disturb the flow of the investment. The employee who believes the costs of staying with the company are in equilibrium with the benefit of staying in the company is more likely to leave the organization.
2.3.4 Characteristics affecting commitment
Chow (2019) suggested four groups of variables that affect commitment that are: personal attributes, job attributes, work experiences and structural aspects. In other studies, unique groups are used.
2.3.4.1. Personal Characteristics
It is commonly argued that personal attributes do not appear to play a crucial role in ascertaining commitment (Tran, 2017)). Personal attributes include variables such as age, tenure, education, gender, marital status.
Age: It is believed that young workers may be more committed relative to old ones since
young one’s views job as a career growth pathway (Morris et al, 1993). They will view change management as a major breach of their trust to the organization.
Tenure: Brimhal (2019) posted that the number of years’ experience is a crucial variable
that affect commitment. Essentially, tenure provides chance to develop a sense of belonging and of loyalty with the company (Brimhal, 2019). It is believed that older workers who have served the company for long lack a strong attachment to the company relative to those with served the company for a short time.
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Education: Well educated employees may have unrealistic demands and this affect
commitment (Jones, 2016). Murrar (2019) posted that educated employees are more likely to be committed. On the contrary less educated employees can have less or none transferable skills to other organisations.
Gender: Literature also indicated the importance of other demographic variables such as
gender in the relationship between change management and organizational commitment. In Asia (e.g. Hong Kong) female employees or female respondents generally will have experienced change management more than the male respondents because they are usually the targets during change management since they are viewed as contributing second incomes to their families.
As a result, after change management, females are generally still committed to their organization because they will be expecting to be laid off in a change management exercise and if they are left out, it’s a bonus for them (Varman, 2019). They also maintained that women are usually psychologically more prepared to be laid off by their company when they joined and as a result, female respondents in Asia view job security not important and the reverse is true for males. That explains why males are usually negatively affected by change management in terms of their organizational commitment than women. However, In South Africa, these assertions can be objectionable considering that all employees are equal under the law and any discrimination is regarded as unfair.
2.3.4.2. Job Characteristics
Job specifications affect organisational or company commitment (Muller, 2019). Job specification attributes is positively linked to commitment. Job specification have also been explained in terms of the high-involvement approach that varies on worker self-management and self-management strategies where all workers are given influential power and ascertain issues impacting their work (Trans, 2017).
2.3.4.3. Organizational Characteristics
Decentralization and participation in decision making process are crucial company attributes that impact company commitment (Brimhal, 2019). According to Cho (2019) commitment is said to increase in a flat company structure where control and coordination is based more on shared goals.
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Leadership style is also an important company attribute that affect commitment (Voet, 2016). It was found that there is a correlation between leader social support and commitment (Peters and Meijer, 1995). Human resource policies are viewed as other company attributes impacting commitment, same with excellent job prospects and training and educational prospects (Viet, 2016 and Brimhal, 2019)
2.3.5. Employee’s perception of organizational commitment following change management.
The link between change management and organizational commitment is not a straight forward one as assumed by many people. This is largely because of existing literature on the subject which reveals employees’ reactions in an unpredictable manner. Organizational commitment is affected in terms of affective, continuance and normative components following change management, as a result organizational commitment will be high or low following change management. In addition, demographic variables may have some influence towards organizational commitment level thereby necessitating their consideration in such studies.
Change management can cause workers to respond in a positive or negative way. Researchers such as Grodal (2019) outlined that following change management exercise or period; the workers can contribute to the company’s operations in a positive or negative way. The change management process often changes the working conditions and working environment for employees and that in turn lead to reduced commitment.
This is because when a company goes through change management, career progressions and opportunities of employees are threatened and when workers see that their development and career opportunities might be blocked because of change management, their commitment to the company falls (Jones, 2016). This view provokes an interesting question among researchers
This is crucial for the purpose that it helps to explain the conception of company commitment pre and post change management. Brimhal (2019) postulated that transformation at work emanating from change management has costs and benefits to employees. The author realised that workers experienced both negative and positive work changes, that is the raised volumes of the work and increased job autonomy, task variety and intrinsic enjoy ability of work.
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Brimhal (2019) further posted that, if the negative changes overcome the positive changes, workers’ affective commitment to the company may well reduce and the opposite is true. Employees’ affective commitment to the company after change management may seems reduced. The considerable portions of workers’ reduced affective commitment are linked to adverse working conditions.
Grodal (2019) have approached the concept of change management on surviving workers’ perceptions on commitment differently. They have related to the effect of change management on employees in terms of responses engendered. They posted that there are two types of responses that employees will show in relation to change management. This can be unsympathetic or sympathetic manner towards the victims.
Tran (2017) posted that the strength of each reaction will differ between workers in the same company. However, it should be underscored that reactions from individuals may also be mixed with regards to change management process (Tran, 2017). This makes it impossible to ascertain the exact state of company commitment among workers. The strength of sympathetic worker’s responses is likely to be much greater where workers and leavers have previously been “interdependent” in execution of their duties.
Furthermore, Chow (2019) posted that where workers and leavers closely identified with each other in terms of their working relationships, there is the likely to be a higher level of sympathetic worker views. This is so because workers of restructuring do not consider themselves separately unique from those made redundant. Instead, workers associate with them in powerful way.
Nevertheless, a lot of workers’ low levels of commitment to the company are a result of being unable to justify why they not laid off whilst others were laid off, especially if they saw or perceived the process as being conducted in a random manner (Grodal, 2019). In those circumstances, it can be said that change management brings about reduced organizational commitment among surviving employees.
Brimhal (2019) went further to establish that the sympathetic employee responses (to those made redundant) are grouped into two: i.e. attitudinal and behavioural reactions. According to them, they suggested that employee’s attitudes to redundancies may include lack of belief, animosity, demotivation, lack of trust, anger, uncertainty, insecurity, decreased job satisfaction, lower morale and lower commitment.
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The behavioural reactions might include worker’s becoming risk averse or exercise discretion and more cautions, increased absenteeism, key actors searching for opportunities to leave and greater turnover, reduced work performance and lower productivity. These reactions are referred to as the “employee syndrome”. Change management, therefore, can impair organizational performance due to the consequential production of these negative employee reactions (Voet, 2016). This partly explains why organizations will fail to meet their intended objectives for change management.
Voet (2016) concluded that the aim of change management is to ensure that high production levels are attained that result in high profit. From a different perspective, it can be pointed out that it is crucial for organizations to understand how change management is being perceived by the employees particularly relating to organizational commitment because during and after a change management exercise, employees tend to develop perceptions about their organizations, which if not properly handled, could prove decisive and fatal for the organization (Brimhal, 2019).
Any change management exercise or process that is regarded or perceived to be unfair and not favourable by employees will reduce their organization commitment. Apart from that, if workers believe that the organisation’s change management process is fair and they got company support, their company commitment increases. (Murray, 2019) also explained the importance of employee perception by maintaining that as long as workers view that there is a job loss threat, since the crisis can never be said to be over and their job posts remain at risk, their level of commitment to the organization will remain low.
This notion underscores the fact or need to change the perceptions of employees in an organization after change management as a way of dealing with organizational commitment i.e. management or the organization should find ways of eliminating fear of job losses. Considerable research reports showed that a lot of workers become narrow-minded and unwilling to take risk, self-absorbed and an attitude of “my first” become dominant after a change management exercise (Lee and Corbett, 2006). This is solely because employees’ motivation and trust in management becomes eroded due to change management. Thus, in this context, the notion that workers reinvigorate the company and delight customers does not hold water because workers may not invest in the company. (Handoff, 1994; Cascio, 1993; Luthans and Sommer, 1999; Lee and Corbett, 2006).
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However, it is now believed among researchers and employers that other employees also believe that the corporate world is dynamic and the conditions of work have changed irreversibly and as a result they have to cope with that. This notion suggest that the era of job security or life employment is gone as business has entered a new era that is volatile and require business to be flexible.
In this regard, there is still scepticism that this may be more connected to a pragmatic or even a compliant position on the part of workers rather than any sense of commitment to the company. Newell and Dopson (1996) also expressed the view that change management does not necessarily diminish employees’ organizational commitment. They maintained that a protracted time of change management produces an environment of intensified work regimes.
In a study carried out by Ndlovu and Parumasur (2005) they indicated that employees were still committed to the company goals post the transformation process. In addition, it has been suggested that other workers regard change management as a chance for personal growth. The employees are said to become energized as opposed to experiencing emotional distress e.g. Dopson and Stewart’s (1993) found out that delayering makes middle management to have sound ideas on areas of responsibility, resource control and freedom to innovate and take new challenges. Brimhal (2019) also observed that employees experienced work overload due to change management. However, greater autonomy and diversity can be attained by the workers as well.
As a result, Tran (2017) posted that worker’s experience has a bearing on company commitment. A change in the job description aspects can have adverse effects on organisational commitment. Tran (2017) also disapproved the notion that change management naturally result in loss of organizational commitment among employees by stating that workers who survive change management feel relieved. In this way, the surviving employees are grateful and delighted that they survived the layoffs and as a result they will easily recommit themselves to the organization.
Brimhal (2019) also added that change management may stimulate a positive inequality among employees resulting in them feeling guilty with the result of being retained after change management resulting in them working harder and re-committing themselves to the organization. In the event of negative inequality, the employees may reduce their level of organizational commitment and work less hard.
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Jones (2016) also learned that after change management, employees with high perceived support from their supervisor showed high levels of commitment. It was also found out that surviving workers will be more committed to the company when they are ware that their counterparts got their retrenchment packages. From a managerial perspective, other researchers have explained the effect of change management on surviving employees’ perceptions on organizational commitment, particularly managers, in terms of the psychological contract. Grodal (2019) posted that change management increases the load upon the remaining workers. This is so since there will be a lot of pressure emanating from diverse number of variables. This can be in the form of a new chain of command, span of control or the added job responsibilities.
It has been summed up that it was this flouting of the psychological contract, along with greater work demands and increased accountability, which has created the biggest problem for management. This lead to the levels of commitment to drop. The big variable being the levels of expectations from management about job security. Hillier and Lyon (2018) discovered that effects of insecurity tend to increase due to possibilities of redundancy which also had an impact on the levels of commitment.
Consequently, after change management, psychological contracts between employer and employees are ruined as trust that was there is compromised leading to diminishing commitment (Voet, 2016). A lack of reciprocal commitment from the company becomes important when looking at the destruction of the psychological contract. Workers may feel to be disengaged to the changes implemented in the organisation.
2.4 STRUCTURAL EMPOWERMENT
Structural empowerment can be described as the structure (e.g., policies, procedures, culture and processes) within an organization that empowers employees to practice within an organization in a professional and autonomous manner to achieve the highest degree of excellence and fulfilment. According to Colquitt (2001) suggests it has four dimensions. The dimensions are distributive, procedural, interpersonal and informational. The dimensions are related to the influence they have on pay, rewards, evaluations, promotions and job assignments. Procedural empowerment relates to the method used to decide about pay. Interpersonal empowerment relates to interactional methods used during the decision-making phase.
29 2.4.1 Kantar’s theory of structural empowerment
Kantar’s (1993) theory incorporates a discussion on the behaviour and empowerment of the company. From this theory, companies that offer workers with conducive work environments promote empowerment. He further noted that psychological empowerment will includes the feelings of competence, autonomy, job meaningfulness, and an ability to add value to the company.
Empowered workers are able to fulfil job demands in an effective and efficient way. They are also more accountable for their work. This theory was used more in the nursing field. Kanter’s theory of structural management focuses on the structures among the companies instead of the individual's own qualities (Bradbury-Jones, Sambrook, and Irvine, 2007). Furthermore, Kanter further states that with tools, information, and support, people’s skill base will improve, they will increasingly make informed decisions and overall accomplish more, thereby benefiting the organization as a whole (Jones, 2016) According to Kanter, two systemic sources of power exist in organizations, these being formal and informal power.
Formal power is that that accompanies high visibility jobs and needs a primary concentrate on freelance deciding Informal power comes from building relationships and alliances with peers and colleagues (Wagner et al., 2010).
The six conditions needed for management to require place per Kanter include:
1. Opportunity for advancement
2. Access to information
3. Access to support
4. Access to resources
5. Formal Power
6. Informal power
By providing the above 6 conditions to workers, job satisfaction, commitment, trust increase at an increasing rate. Kantor’s theory has proven to have measurable impact on employee empowerment and job satisfaction as well as company morale and success, especially in healthcare settings (Wagner et al., 2010).
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It has also been noted that retention rates of healthcare workers improve as the working conditions improve. (Krebs, Madigan, and Tullai-McGuinness, 2008). These challenges have forced organizations and leaders to rethink their strategies of operations and structure. Kanter’s theory still resonates as one of the most basic frameworks to guide practice in order to improve organizational efficacy. Where healthcare leaders have been able to put into practice empowerment models i: e Magnet Hospitals, there has been success within challenging times (Krebs et al., 2008).
With a lot of organizations trying to find staff World Health Organization takes the initiative and respond creatively to the challenges of the duty, empowerment becomes important at both individual and organizational levels. Empowered staff square measure usually a lot of happy with their work, committed and effective at work. This study can examine the role of access to chance, resources, support and information, and two types of power, formal and informal, as antecedents of job satisfaction
2.4.2 Empowerment through organizational structure
As noted by Tran (2017), empowerment is thought to occur when an organization sincerely engages people and progressively responds to this engagement with mutual interest and intention to promote growth. Empowerment develops over time as staff gain larger management over their lives and progressively participates in choices that have an effect on them.
The findings of Tran (2017) suggested that membership on a Collaborative Governance committee increased the participant’s sense of empowerment and fostered self-growth and organizational development. Jack Welch, former chief executive officer of General electrical, focused his years at GE transforming the company into an empowered company that is what he called boundary less organization.
Welch’s aim was to remove anything getting in the way of information flow and exchange of ideas within the company. Instead of sales, research and production divisions operating separately under directives sent from higher executives, Welch encouraged teamwork across divisions and autonomy in deciding operations, maintenance and results. He created an empowered organization structure that enables a trust-based work environment where meeting customer needs and creating opportunities to advance the company are part of every employee’s job.
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CEO’s (Chief Executive Officers), as head of the empowered organizations, they pave the way for the companies by plotting their course, and keeping all managers and employees going in the same direction. The CEO’s trains managers to take over day-to-day company operations. Managers might regularly report progress, and get insight from the CEO’s, but the CEO’s are not micro-managing every daily detail.
For example, according to Entrepreneur, an empowered organization’s CEO might require managers to implement their own department plans and budgets as well as hire their own employees. The CEO’s roles are to create safe working environments and to provide the resources needed to let decision-making thrive.
Managers are leaders in empowered organizations. The roles of managers in empowered organizations are to guide the direction of the companies by enabling employees to be creative, to take risks and to work interdependently with other parts of the organization.
Managers in these environments are fewer employees with authority and more an employee to support their subordinates. For example, per Harvard Business Review, Roger Sant, founder and former chairman of Applied Energy Services, organized his company around little groups to avoid levels of hierarchy. Under his leadership, each of the company’s power plants had one manager overseeing five to 20 teams, with each team completely self-directed, but working interdependently with all other teams.
Empowered organization is driven by teamwork. Employees proven to be capable are made responsible for making decisions, which impact the companies and are held accountable for the results of their decisions. In larger empowered companies, employees form teams to control various aspects of the company. Employees move around different teams with time, therefore increasing their expertise in various roles and their value as employees overall. Empowered work environments attract future leaders who are trustworthy, self-confident, always learning, and passionate about helping customers and the company overall.
32 2.5 CONCLUSION
The effect of change management and organization commitment among employees is not a straightforward one. Employees can be positively or negatively affected by change management in terms of their commitment to the organization. This means that organizational commitment can decrease or increase after change management depending on a lot of factors e.g. the context and business environment under which change management was carried out, reactions of employees following the management of the change process.
In overall terms, it can be said that the level of organizational commitment of employees following change management depends on their perceptions and how they view the whole change management process. This will shape and generate attitudes and behaviours from the employees that are expressed or articulated as less or more commitment to the organization. Management structural empowerment of employees will enhance employees remain positive during and after the change management process. Lee, (2011) posted that employee welfare measures are one of the key inputs to bring about the desired level of worker commitment in the company during the change process. Employee welfare is regarded as an exercise to build worker commitment during change
and ensuring that the level of motivation of the workers remains high so as to avoid unnecessary stumbling blocks during the change management process as was posted by Kaur, (2014). Without worker commitment, it implies that the chances of organizations achieving its goal will be next to nothing. This is so since uncommitted workers may be resource wasteful and less diligent in executing their duties.
33 CHAPTER 3: RESEARCH METHODOLOGY
3.1 INTRODUCTION
The purpose of the study was to investigate employee responses to organisational change, to examine the attitudes towards change and to assess the willingness to change amongst employees within the case study organisation. To do this, a quantitative approach was taken to explore organizational commitment, the perception towards organizational change and structural empowerment. Data was collected through questionnaires distributed to a sample population within a business unit of a steel manufacturing company.
3.2. PARADIGM
Creswell and Plano (2011) posted that a research paradigm refers to a research model for carrying out a given research, which has been verified by the research community for long and which has been in use for various years. Different kinds of research make use of the research paradigms as a guideline for the development of research methodology and to ensure that the research process follows a well-structured route. They include positivist paradigm as well as interpretivist research paradigm (Creswell, 2013).
This study was quantitative in nature and therefore adopted the positivism paradigm. A number of quantitative or scientific researches make use of the positivism research paradigm as their conceptual framework. A number of the quantitative studies always adhere to the positivist approach since positivists always believe in empirically testing the hypotheses. It is always used in pure sciences due to the fact that it empirically studies facts (Creswell, 2013). In quantitative studies, research always follows a probabilistic model, which is influenced by previous research. Positivists also believe that the findings of a given study can easily be generalized to a different study of a similar type regardless of whether the given study is carried out within a different situation or environment.
3.3. RESEARCH METHODS
The study was based on a quantitative research methodology for the purpose of gathering appropriate data and answering the outlined research questions. Rahman (2017) posted that quantitative research is based on the collection of numerical data to address a specific empirical research questions.
