The Effect of Change Management on Organizational Performance: A case Study on Selected Private Commercial Banks in Ethiopia, Addis Ababa

Abstract

This study was driven to determine the effect of change management on the organizational performance: a case study on selected private commercial banks in Ethiopia, Addis Ababa. To know the overall understanding of employees towards the various dimensions of change management and its effect on organizational performance. The researcher applied quantitative research approach and explanatory research design. The researcher used purposive sampling technique to select four (4) private commercial banks from the existing sixteen (16) private commercial banks in Ethiopia and employees of the Banks are selected based on probability simple random sampling technique. Primary data was collected through structured questionnaires including open ended questions and structured interview and also secondary source was collected from different company profiles, books and websites which dictate regarding the study. To analyze the collected data from the respondents the researcher used SPSS version 23. The researcher used inferential statistic such as correlation analysis and multiple regressions to predict the relationship between four components of change management and organizational performance. Accordingly the Pearson correlation test conducted between change management dimension and organizational performance revealed that all independent variables have a positive relationship with dependent variable organizational performance, hence, communication and employee engagement took the first and second ranks on influencing the organizational performance while leadership and readiness for change significance was fall on third and fourth ranks. The regressions result confirmed that, the linear combination of all the components of change management considered under the present study was significantly contributed to the variance in the dependent variable organizational performance. The ANOVA test result also confirmed that, the prediction powers of the change management components are found to be statistically significant. From the Beta coefficient result, the researcher obtained that, employee engagement is found to be the most important variable in predicting the dependent variable organizational performance, followed by communication in private commercial banks. Even if leadership has a negative contribution, it is found to be statistically significant and also Even if readiness for change has a positive contribution, it is found to be statistically insignificant compared to the other variables. Finally, the researcher concluded that in the case of private commercial banks, change management has its own contribution in achieving organizational performance. The researcher recommended that in order to create awareness about the change in the minds of the employees the private banks managements has to work hard towards improving leadership quality, The leaders need to be committed to implement the change effectively, need to be responsible and accountable for implementation of change management and its effectiveness and also the banks management should understand their employees’ knowledge and skills, their believe about the change are well planned in their organizations and will benefit the organizations in order to achieve its goal and objectives.