AN INVESTIGATION OF FACTORS THAT LEAD TO RESISTANCE TO CHANGE IN THE TRANSFORMATION PROCESSOF MICROFINANCE ORGANIZATIONS IN KENYA INTO DEPOSIT TAKING INSTITUTIONS
DOI:
https://doi.org/10.47672/ijbs.168Keywords:
transformation process, Microfinance institutions, Deposit Taking institutionsAbstract
Purpose: The purpose of this study was to evaluate the factors that lead to resistance to change in the transformation process of Microfinance institutions in Kenya into Deposit Taking institutions.
Methodology: This study adopted descriptive research design. For purposes of collecting primary data, the use of a questionnaire developed by the researcher was used. Data was then analyzed using Excel and SPSS and presented in tables, graphs and charts. A total of 120 questionnaires were distributed to the above five organizations and 42 of them were returned. This represents a 35% response rate.
Results: The study also concluded that initiatives that reduce resistance to change have a positive association with transformation. For instance, the study concluded that training was associated with higher transformation success. Furthermore, a positive attitude towards change was associated with higher transformation success. The study also concluded that the higher the perceived benefits, the higher the transformation success. It was also noted that organizations that had a good track record of successful change attempts had successful transformations and that the credibility of the organizations determined how respondents felt about the organizations ability to implement successful transformations.
Unique contribution to theory, practice and policy: The study recommends that Leaders should as much as possible clearly define the need for the change by communicating the strategic decision as well as involving their subordinates in the planning of the change by asking them to give suggestions and ideas. Transforming MFIs should also plan for and deliver relevant training programs that develop basic skills.
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References
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Al-Alawi, A. I., Al-Marzooq, N. Y., & Mohammed, Y. F. (2007). Organizational culture and knowledge sharing: critical success factors. Journal of Knowledge Management, Vol. 11, pp. 22-42.
Alas, R. (2007). Reactions to organizational change from the institutional perspective: the case of Estonia. Problems and Perspectives in Management, , Vol. 5, pp. 19-31.
Armenakis, A. A., & Harris, S. G. (2002). Crafting a change message to create transformational readiness. Journal of Organizational Change Management, Vol 15, pp. 169-83.
Ashforth, B. E., & Mael, F. A. (1998). The power of resistance: Sustaining valued identities. Thousand Oaks, CA: Sage Publications.
Association of Microfinance Institutions of Kenya (AMFI).(2010). Retrieved October 3, 2011, from Overview of AMFI: http://www.amfikenya.com
Barney, J. (1986). Organizational culture: can it be a source of sustained competitive advantage? Academy of Management Review, Vol. 11 No. 3, pp. 656-65.
Beaudan, E. (2006). Making change last: how to get beyond change fatigue. Ivey Business Journal Online, Vol. 70, pp. 1-7.
Beck, T. (2009). FinAccess 2009: Trends, Analysis and Policy Conclusions. Consultant report for FSD Trust Kenya. Nairobi: FSD Trust Kenya.
Bridges, W. (1986). Managing organizational transitions. Organizational Dynamics, pp 24-33.
Brooks, I. (2009). Organisational Behaviour: Individuals, Groups and Organisation;4th Edition. New Jersey: Prentice Hall.
Bryman, A., & Bell, E. (2007). Business Research Methods, 2nd ed. Oxford: Oxford University Press.
Burns, J. M. (1978). Leadership. New York: Harper and Row.
Cameron, K. S. (1997). Techniques for making organizations effective: Some popular approaches. Enhancing organizational performance , pp.39-64.
Cameron, K. S., & Ettingson, D. (1988). The conceptual foundations of organizational culture;Handbook of theory and research. Norwell, Massachusetts: Kluwer.
Cameron, K. S., & Quinn, R. E. (2006). Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework . San Francisco: Jossey-Bass.
Campion, A., & White, V. (2001). NGO Transformation. Maryland: Development Alternatives, Inc.
Carter, E. (2008). Successful change requires more than change management. The Journal for Quality and Participation, ., Vol. 31, pp. 20-23.
Central Bank of Kenya. (2011, January 11). Central Bank of Kenya. Retrieved October 12, 2011, from CBK Licenses Fifth Deposit Taking Microfinance: www.centralbank.go.ke
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Cooper, D. R., & Schindler, P. S. (2003). Business Research Methods, Eighth. New York: The McGraw−Hill.
Davenport, T. H., & Prusak, L. (1998). Working Knowledge: How Organizations Manage What They Know. Boston, MA: Harvard Business School Press.
Denison, D. R. (1990). Corporate culture and organizational effectiveness. Hoboken, N.J: Wiley.
Denscombe, M. (2003). The Good Research Guide, Second edition . Buckingham: Open University Press.
Dillman, A., Smyth, J. D., & Christian, L. M. (2009). Internet, Mail, and Mixed-mode Surveys: The tailored Design Method, 3rd ed. Hoboken, NJ: Wiley.
Engel, R. J., & Schutt, R. K. (2005). The practice of research in social work. London: Sage Publications, Inc.
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Greenberg, J., & Baron, R. (2008). Behavior in Organizations, 9th edition. Upper Saddle River, NJ.: Prentice-Hall.
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Herscovitch, L., & Meyer, J. P. (2002). Commitment to organizational change: extension of a three-component model. Journal of Applied Psychology, Vol. 87, pp. 474-87.
Holt, D. T., Armenakis, A. A., Feild, F. S., & Harris, S. G. (2007). Readiness for organizational change: the systematic development of a scale. The Journal of Applied Behavioral Science, Vol. 43, pp. 232-51.
Hoque, M., Chishty, M., & Halloway, R. (2011). Commercialization and changes in capital structure in microfinance institutions An innovation or wrong turn? Managerial Finance, pp.414-425.
Hultman, K. (1995). Scaling the wall of resistance . Training and Development, pp. 15-18.
Jacobsen, J. (2008). Avoiding mistakes of the past: lessons learned on what makes or breaks quality initiatives. The Journal for Quality and Participation, Vol. 31, pp. 4-9.
Jarnagin, C., & Slocum, J. (2007). Creating corporate cultures through mythopoetic leadership. Organizational Dynamics, Vol. 36, pp. 288-302.
Karim, A., & Kathawala, Y. (2005). The experience of manufacturing firms with the implementation of different production philosophies: a United States survey. International Journal of Management,, Vol. 22, pp. 351-65.
Kotter, J. P. (1995). Leading change: why transformational efforts fail. Harvard Business Review, Vol. 73 pp. 59-67.
Kotter, J. P. (1996). Leading Change. Boston, MA: Harvard Business Press.
Ledgerwood, J., & White, V. (2006). Transforming Microfinance Institutions: Providing Full Financial Services to the Poor. Washington D C: The International Bank for Reconstruction and Development / The World Bank.
Levinthal, D. A., & March, J. G. (2007). The myopia of learning. Strategic Management Journal, Vol. 14, pp. 95-112.
Maslow, A. (1987). Motivation and Personality, 3rd edition. Boston, MA: Addison-Wesley.
Maurer, R. (1996). Beyond the Wall of Resistance: Unconventional Strategies that Build Support for Change. Austin, TX: Bard Books Inc.
Mehrizi, M. H., & Bontis, N. (2009). A cluster analysis of the KM field. Management Decision, Vol. 47, pp.792 - 805.
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MicrofinanceAct. (2006). Issue No.19 of 2006. Kenya.
Monette, D. R., Sullivan, T., & DeJong, C. (2002). Applied Social Research. Orlando,FLA: Harcourt Press.
Nikolaou, I., Tomprou, M., & Vakolar, M. (2007). Individuals’ inducements and the role of personality: implications for psychological contracts. Journal of Managerial Psychology, Vol. 22, pp. 649-63.
Palmer, I., Dunford, R., & Akin, G. (2006). Managing Organizational Change: A Multiple Perspectives Approach. New York, NY: McGraw-Hill/Irwin.
Piderit, S. K. (2000). Rethinking resistance and recognizing ambivalence: a multidimensional view of attitudes toward an organizational change. Academy of Management Review, Vol. 25, pp. 783-94.
Schlesinger, L., & Kotter, J. P. (1979). Choosing strategies for change. Harvard Business Review, pp. 106-14.
Seel, R. (2002). Retrieved March 3, 2012, from The Nature of Organizational Change: www.new-paradigma.co.uk
Simpkins, R. A., & Paknejad, B. S. (2008). Not Another Pretty Binder: Strategic Planning That Actually Works . Amherst, MA: HRD Press.
Stanley, D. J., Meyer, J. P., & Topolnytsky, L. (2005). Employee cynicism and resistance to organizational change. Journal of Business and Psychology, Vol. 19, pp. 429-59.
Stenzel, P. L. (2009). Microfinance: The Journey from Non-Profits to Major Financial Institutions. Global Edge Business Review, Vol. 3, No. 8, pp.40-59.
Wanberg, C. R., & Banas, J. T. (2007). Predictors and outcomes of openness to changes in a reorganizing workplace. Journal of Applied Psychology, Vol. 85, pp. 132-42.
Abzari, M., & Teimouri, H. (2008). The effective factors on knowledge sharing in organizations. The International Journal of Knowledge, Culture and Change Management, Vol. 8, pp. 105-13.
Al-Alawi, A. I., Al-Marzooq, N. Y., & Mohammed, Y. F. (2007). Organizational culture and knowledge sharing: critical success factors. Journal of Knowledge Management, Vol. 11, pp. 22-42.
Alas, R. (2007). Reactions to organizational change from the institutional perspective: the case of Estonia. Problems and Perspectives in Management, , Vol. 5, pp. 19-31.
Armenakis, A. A., & Harris, S. G. (2002). Crafting a change message to create transformational readiness. Journal of Organizational Change Management, Vol 15, pp. 169-83.
Ashforth, B. E., & Mael, F. A. (1998). The power of resistance: Sustaining valued identities. Thousand Oaks, CA: Sage Publications.
Association of Microfinance Institutions of Kenya (AMFI).(2010). Retrieved October 3, 2011, from Overview of AMFI: http://www.amfikenya.com
Barney, J. (1986). Organizational culture: can it be a source of sustained competitive advantage? Academy of Management Review, Vol. 11 No. 3, pp. 656-65.
Beaudan, E. (2006). Making change last: how to get beyond change fatigue. Ivey Business Journal Online, Vol. 70, pp. 1-7.
Beck, T. (2009). FinAccess 2009: Trends, Analysis and Policy Conclusions. Consultant report for FSD Trust Kenya. Nairobi: FSD Trust Kenya.
Bridges, W. (1986). Managing organizational transitions. Organizational Dynamics, pp 24-33.
Brooks, I. (2009). Organisational Behaviour: Individuals, Groups and Organisation;4th Edition. New Jersey: Prentice Hall.
Bryman, A., & Bell, E. (2007). Business Research Methods, 2nd ed. Oxford: Oxford University Press.
Burns, J. M. (1978). Leadership. New York: Harper and Row.
Cameron, K. S. (1997). Techniques for making organizations effective: Some popular approaches. Enhancing organizational performance , pp.39-64.
Cameron, K. S., & Ettingson, D. (1988). The conceptual foundations of organizational culture;Handbook of theory and research. Norwell, Massachusetts: Kluwer.
Cameron, K. S., & Quinn, R. E. (2006). Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework . San Francisco: Jossey-Bass.
Campion, A., & White, V. (2001). NGO Transformation. Maryland: Development Alternatives, Inc.
Carter, E. (2008). Successful change requires more than change management. The Journal for Quality and Participation, ., Vol. 31, pp. 20-23.
Central Bank of Kenya. (2011, January 11). Central Bank of Kenya. Retrieved October 12, 2011, from CBK Licenses Fifth Deposit Taking Microfinance: www.centralbank.go.ke
Chin-Loy, D. C., & Mujtaba, D. B. (2007). The influence of organizational culture on the success of knowledge management practices with North American companies. International Business & Economic Research Journal, Vol. 6, pp. 15-28.
Cooper, D. R., & Schindler, P. S. (2003). Business Research Methods, Eighth. New York: The McGraw−Hill.
Davenport, T. H., & Prusak, L. (1998). Working Knowledge: How Organizations Manage What They Know. Boston, MA: Harvard Business School Press.
Denison, D. R. (1990). Corporate culture and organizational effectiveness. Hoboken, N.J: Wiley.
Denscombe, M. (2003). The Good Research Guide, Second edition . Buckingham: Open University Press.
Dillman, A., Smyth, J. D., & Christian, L. M. (2009). Internet, Mail, and Mixed-mode Surveys: The tailored Design Method, 3rd ed. Hoboken, NJ: Wiley.
Engel, R. J., & Schutt, R. K. (2005). The practice of research in social work. London: Sage Publications, Inc.
Giangreco, A., & Peccei, R. (2005). The nature and antecedents of middle managers’ resistance to change: evidence from an Italian context. The International Journal of Human Resources Management, Vol. 16, pp. 1812-29.
Greenberg, J., & Baron, R. (2008). Behavior in Organizations, 9th edition. Upper Saddle River, NJ.: Prentice-Hall.
Gutmann, D. (2003). Psychoanalysis and Management: The Transformation. London, England: Karnac Books.
Herscovitch, L., & Meyer, J. P. (2002). Commitment to organizational change: extension of a three-component model. Journal of Applied Psychology, Vol. 87, pp. 474-87.
Holt, D. T., Armenakis, A. A., Feild, F. S., & Harris, S. G. (2007). Readiness for organizational change: the systematic development of a scale. The Journal of Applied Behavioral Science, Vol. 43, pp. 232-51.
Hoque, M., Chishty, M., & Halloway, R. (2011). Commercialization and changes in capital structure in microfinance institutions An innovation or wrong turn? Managerial Finance, pp.414-425.
Hultman, K. (1995). Scaling the wall of resistance . Training and Development, pp. 15-18.
Jacobsen, J. (2008). Avoiding mistakes of the past: lessons learned on what makes or breaks quality initiatives. The Journal for Quality and Participation, Vol. 31, pp. 4-9.
Jarnagin, C., & Slocum, J. (2007). Creating corporate cultures through mythopoetic leadership. Organizational Dynamics, Vol. 36, pp. 288-302.
Karim, A., & Kathawala, Y. (2005). The experience of manufacturing firms with the implementation of different production philosophies: a United States survey. International Journal of Management,, Vol. 22, pp. 351-65.
Kotter, J. P. (1995). Leading change: why transformational efforts fail. Harvard Business Review, Vol. 73 pp. 59-67.
Kotter, J. P. (1996). Leading Change. Boston, MA: Harvard Business Press.
Ledgerwood, J., & White, V. (2006). Transforming Microfinance Institutions: Providing Full Financial Services to the Poor. Washington D C: The International Bank for Reconstruction and Development / The World Bank.
Levinthal, D. A., & March, J. G. (2007). The myopia of learning. Strategic Management Journal, Vol. 14, pp. 95-112.
Maslow, A. (1987). Motivation and Personality, 3rd edition. Boston, MA: Addison-Wesley.
Maurer, R. (1996). Beyond the Wall of Resistance: Unconventional Strategies that Build Support for Change. Austin, TX: Bard Books Inc.
Mehrizi, M. H., & Bontis, N. (2009). A cluster analysis of the KM field. Management Decision, Vol. 47, pp.792 - 805.
MercyCorps. (2006, April 14). Global Envision:the confluence of global markets and poverty alleviation. Retrieved October 5, 2011, from The History of Microfinance: http://www.globalenvision.org.
MicrofinanceAct. (2006). Issue No.19 of 2006. Kenya.
Monette, D. R., Sullivan, T., & DeJong, C. (2002). Applied Social Research. Orlando,FLA: Harcourt Press.
Nikolaou, I., Tomprou, M., & Vakolar, M. (2007). Individuals’ inducements and the role of personality: implications for psychological contracts. Journal of Managerial Psychology, Vol. 22, pp. 649-63.
Palmer, I., Dunford, R., & Akin, G. (2006). Managing Organizational Change: A Multiple Perspectives Approach. New York, NY: McGraw-Hill/Irwin.
Piderit, S. K. (2000). Rethinking resistance and recognizing ambivalence: a multidimensional view of attitudes toward an organizational change. Academy of Management Review, Vol. 25, pp. 783-94.
Schlesinger, L., & Kotter, J. P. (1979). Choosing strategies for change. Harvard Business Review, pp. 106-14.
Seel, R. (2002). Retrieved March 3, 2012, from The Nature of Organizational Change: www.new-paradigma.co.uk
Simpkins, R. A., & Paknejad, B. S. (2008). Not Another Pretty Binder: Strategic Planning That Actually Works . Amherst, MA: HRD Press.
Stanley, D. J., Meyer, J. P., & Topolnytsky, L. (2005). Employee cynicism and resistance to organizational change. Journal of Business and Psychology, Vol. 19, pp. 429-59.
Stenzel, P. L. (2009). Microfinance: The Journey from Non-Profits to Major Financial Institutions. Global Edge Business Review, Vol. 3, No. 8, pp.40-59.
Wanberg, C. R., & Banas, J. T. (2007). Predictors and outcomes of openness to changes in a reorganizing workplace. Journal of Applied Psychology, Vol. 85, pp. 132-42.
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Copyright (c) 2017 Belinda Kendi, Prof. Kinyua Kamaria
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