THE EFFECT OF ORGANIZATIONAL DEVELOPMENT IN THE NIGERIAN BANKING INDUSTRY

ABSTRACT

This  study  assesses  the  impact  of  organizational  development  in  the Nigerian banking industry using some selected banks in Enugu metropolis. This study tries to ascertain if organizational development affects employee job  performance and  to  formulate recommendations regarding corporate culture. In order to achieve the above objectives, the following questions were asked: Does organizational development have any effect on employee job  performance  in  the  Nigerian banking  industry? In  what  ways  does corporate culture impact employee job performance? Is the implementation of organizational culture effective in the Nigerian banking industry? Four hypotheses were advanced: (i) There is no positive relationship between organizational development and employee job performance. (ii) Organizational development has no effect on employee job performance. (iii) The implementation of organizational development has not been effective in the Nigerian banking industry. (iv) Change has not strategically repositioned the Nigerian banking industry. The study uses survey research method. The banks were selected using stratified and simple random sampling techniques. Our respondents were selected using simple random sampling technique. The findings of this study are that organizational development has effect on the Nigerian banking industry, there is a positive relationship between organizational development and employee’s job performance, the implementation of organizational development has been very effective and that change has strategically repositioned the Nigerian banking industry. These findings made the study to accept four alternative hypotheses and reject the null hypotheses because in the four cases, the calculated values of chi-square were greater than the tabulated values.

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF STUDY

All organizations need to establish proper governance, management, administration as well as financial structures and systems to ensure that they achieve their goals and objectives effectively and efficiently in the short term, and develop sustainable programme in the long-term (Ukpaka and Olukotun, 2008:1). Organizational Development (OD) is simply the way organizations change and evolve (Evereth, 2008:2). In this wise, organizational change can involve personnel, technology, competition and other areas. Employee learning and formal training, transfers, promotions, terminations and retirements are all examples of personnel related changes. Thus, in the broadest sense, organizational development means organizational change. Organizational development is concerned with the analysis and diagnosis of the factor that determine organizational effectiveness, and the planning and delivery of programmes to increase that effectiveness (Ojo, 2009:389). Organizations want to obtain the commitment of their employees. Management would like its employees to identify with the values, norms and artifacts of the organization, hence the need for organizational culture. Management needs to explain and imbibe its culture

in its employees; this will enable the employees to get familiar with the organizational system. During this process of explanation, the employees learn about the organizational culture and decide whether she can cope with it or not. This means that each organization is a learning environment. It is the proper understanding of the organizational culture that the performance of the employees in the organization can be enhanced effectively. Performance is the extent to which an individual is carrying out assignment or task. It refers to the degree of accomplishment or task that makes up an employees job (Cascio, 2006:14). Job performance is the net effect of an employee’s effort  as  modified  by  abilities  and  roles  or  task  perception (Jones, 2003:29). The culture of the organization should be developed to support continuous improvement, improve employee’s style of performing their jobs and thus develop quality awareness. To operate successfully across cultures, it is important to be able to recognize cultural differences and be adaptable (Deter, Schroeder, and Mauriel, 2000:12). Organizational culture finds expression through the thoughts, intentions, actions and interpretations of members of the Organization (Hallett, 2003:1280.This study therefore evaluated the effects of organizational development in Nigerian banking industry.

1.2     STATEMENT OF THE PROBLEM

The introduction of organizational development (OD) is with the view to enhancing employee job performance in the banking industry. Though the advantages and opportunities organizational development offers are  very great, but this is not without some problems. The followings are what the study intends to investigate.

i.       One of the major effects of organizational development in the banking industry is on its downsizing effects on the employees.

ii.       Internalizing problem- Every individual has different culture and beliefs that she works with and when she joins an organization that has a completely different culture and beliefs from her own, it affects her performance.

iii.        Resistance to Change- This issue arises due to employer’s uncertainty about the outcome of such change. A lot of reasons were discovered why  workers   resist   change,   some   of   which   are;   self   interest, misunderstanding and  lack  of  trust,  different  assessments  and  low tolerance for change.

iv.       Fear  of  Cost  contributes  to  organizational development  in  banking industry. The fear of cost involved in the implementation of change or organizational development is usually very high. Most organizations

cannot  afford  such  huge  cost  in  order  to  effect  changes  in  their organizations.

v.       Fear of losing people’s support- The fear of losing people’s support also contributes to organizational development in the banking industry. With regards to the various heights in reasoning processed by the various levels of workers, the issue of organizational change will be understood in different ways. To most average workers, assessment to change is a management strategy of cutting down worker’s strength, deductions in wages and a decline in working conditions. This can result to management resisting changes generated by subordinate (i.e. operative staff) where it is believed that such a change could lead to fear of losing people’s support.

vi.       There is the problem of workers irrational attitude towards the changes which is referred to resistance to change. The reasons for this include self interest, misunderstanding and lack of trust, different assessment, and low tolerance for change.

1.3     OBJECTIVES OF STUDY

The broad objective of this study is to examine the effects of organizational development in the banking industry.

In line with the primary objectives, the secondary objectives are as follows:-

i.        To ascertain whether organizational development have effects on employee job performance in the banking industry.

ii.     To ascertain the effectiveness of the implementation of organizational development in the banking industry.

iii.      To examine to what extent change programme can strategically reposition an organization as a tool for competitive advantage.

iv.      To examine empirically the relationship between organizational development and  employee job  performance  in  the  banking industry.

v.    To formulate recommendations regarding organizational development in the banking industry.

1.4     RESEARCH QUESTIONS

This research study is poised towards providing answers to the following question:-

a). Does organizational development have any effect on the Nigerian banking industry?

b).  In  what  ways  does  organizational  development  impact  on  the employee job performance in the banking industry?

c). How effective is the implementation of organizational development in the banking industry?

d).  What  relationship  exist  between  organizational  development  and employees job performance in the banking industry?

e). To what extent has change programme strategically reposition the banking industry in Nigeria?

1.5          RESEARCH HYPOTHESIS

In order to answer the research questions and achieve the objectives of the study, the following hypotheses are advanced and will be tested in the course of this study.

HYPOTHESIS 1

Ho:      There   is   no   positive   relationship   between   organizational development and employee job performance in the banking industry.

H1:       There   is   a   positive   relationship   between   organizational development and employee job performance in the banking industry.

HYPOTHESIS II

Ho:   Organizational development does not have any impact in the banking industry.

H2:  Organizational development has impact in the banking industry.

HYPOTHESIS III

Ho:     The  Implementation  of  organizational  development  is  not effective in the banking industry.

H3: The implication of organizational development is effective in the banking industry.

HYPOTHESIS IV

Ho: Change has not strategically repositioned the banking industry.

H4:  Change has strategically repositioned the banking industry.

1.6          SIGNIFICANCE OF THE STUDY

A study of this nature, aimed at investigating the effects of organizational development in the banking industry in Nigeria with specific reference to the selected banking industry is timely and invaluable in the treatment of the problems associated with the effects of organizational development in the banking industry. In the first instance, this study will hopefully create awareness or be useful to the selected banking industry to enable them cope with the challenges of corporate culture on employee job performance. It will equally highlight the benefits they stand to enjoy when proactive measures are being taken by them to reduce the effects of corporate culture on employee job performance. Such exposure will help the selected banking industry take a prompt action that will yield positive results.

Furthermore, this study will unveil the effects of organizational development on employee job performance with an attempt to propose solutions to reducing   the   problems   and   probably   proposing   possible   ways   of

internalizing their employees with their organizational system. Therefore, banks and other corporate body of human resources management will stand to benefit from the outcome of this study for best practice and corporate culture internalization within their organizational system.

1.7    SCOPE OF THE STUDY

This study covers the effects of organizational development in the banking industry with specific reference to selected banking industry. For this to be ascertained, two key banks selected from the ‘old ‘ and ‘new’ generation banks bringing the total to four banks. Attempt will be made to collect data from UBA and First bank Enugu representing old generation banks and the Zenith and Oceanic banks representing the new generation banks both in  Enugu State of Nigeria.

1.8    AREA OF THE STUDY

The area of the study is Enugu State. The choice of Enugu State stems from the fact that the branch offices of Nigerian banks are located in Enugu State and that there is concentration of banks in Enugu State.

1.9    LIMITATIONS OF THE STUDY

During this research work, a lot or constraints and limitations were encountered. Some of these constraints were usual constraints encountered during the course of such academic exercise while some were unusual and

boring. One major limitation of this work is its non experimental dimension. This factor makes it difficult to ascertain that the result of the research would be exactly the same anywhere it is carried out. Collection of primary data for this study was a major constraint, as the researcher has to be on the field personally in all the data collection processes. Financial constraints also posed a major problem during the investigation. The researcher would have wanted to carry on the same type of investigation in similar banks within the same banking industry, but for financial constraints.

Time was another limitation encountered during the course of study. Time constraints  have  forced  the  researcher  to  concentrate  on  the  effects  of organizational development in the banking industry instead of spreading the study on other industry like Manufacturing Industry, Educational Sector etc. Sometimes, Secondary data collected were not reliable, hence they were rejected.  A  lot  of  time  was  spent  on  the  selection and  examination of secondary data for the study.

DEFINITION OF TERMS

Job performance – This is the net effect of an employee’s effort as modified by abilities and roles or task perceptions.

Corporate culture – This is the “normative glue” that holds an organization together.

Organizational Development –  This  is  concerned with  the  analysis  and diagnosis of the factor that determine organizational effectiveness, and the planning and delivery of programmes to increase that effectiveness.

Culture – This can be defined as: “A pattern of shared basic assumptions that the  group  learned  as  it  solved  its  problems  of  external adaptation and internal integration that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.

Corporate  culture  strength  –  This  refers  to  how  widely  and  deeply employees hold the company’s dominant values and assumptions.

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