12 July 2004	Monday	23 Jamadi-ul-Awwal 1425

The influx of new technologies and the fast approaching globalization have placed stagnant and debt-ridden economies of the South at the crossroad where they have to decide either to keep status quo or join the race for achieving socio-economic prosperity.

For quick economic recovery structural adjustment programmes have been undertaken. This will help in bringing fiscal, monetary and social sector reforms. Pakistan was too forced to undertake structural adjustment programme to arrest the debt burden and achieve sustainable growth in public sector entities and financial institutions by bringing about organizational change.

Before discussing the dynamics it is necessary to know the definition and dimensions of this change. According to Carter McNmara - a management expert, the 'organizational change' refers to "wide changes, as opposed to smaller ones such as adding a new person, modifying a programme, etc.

It might include a change in mission, restructuring operations, new technologies, mergers, major collaborations, right sizing, new programmes such as the total quality management and re-engineering etc".

In other words it is transformation. The change is provoked by external factors like fetching new markets/new clients or bringing in cost-effective operational change for meeting the market demands. In case of Pakistan this has been forced upon by the funding agencies for making viable the loss-incurring public sector entities.

For effective change the initiative must come from the chief executive and the board of directors of any organization. The process has to be carried out in a planned and systematic way.

According to Kurt Lewin, the execution of a successful organizational change passes through three phases: 'Unfreezing', 'changing' and 're-freezing'. Unfreezing should be reckoned with planning for change and setting goals.

This is most uncomfortable for employees as majority have rigid habits and behaviours. They dislike a change in routine. The management, on the other hand, attaches stigma on behaviours, and as such, separation of unwanted staff through dismissal and golden hand shake are the usual outcome.

The 'change' phase calls for positive approach. Here the organization is concerned with implementing new procedures, systems and culture values. At 're-freezing' stage new systems, procedures and behaviours are designated as an integral part of an organization, and routine of its culture.

In Pakistan, this has been experimented in the public sector corporations and the state-owned banks. Funding agencies insisted on total restructuring in loss-making organizations through rightsizing and downsizing.

This resulted in acute unemployment and insecurity among the retained staff. Here the change in mission and setting goals for quality management was not the prime objective. Hence, culture remained more or less the same.

It is a prerequisite that before carrying out change all the stakeholders, including employees of all cadres, should be consulted and involved in the process for smooth transition.

The hue and cry experienced after downsizing in public sector corporations, banks, the Central Board of Revenue, etc., was because of the unilateral decisions taken at the management level which had conflicting objectives - to increase the resources for accomplishing the process, yet at the same time cut cost to remain viable. Hence, resistance was encountered from the employees.

Though, the public sector corporations and banks experienced a dictated restructuring, yet it was needed for the survival. Political interference, particularly in banks resulted in over-staffing and sharp increase in the non-performing assets.

This turned these profit-making entities into loss-incurring ones. Restructuring in public sector banks has helped these to come out of the accumulated losses which was not achieved by improving the policies and systems but through the injection of funds by the central bank.

For a change in team, it is essential that the chief executive should meet the staff and explain the need of bringing about change. Plans and their implementation should be communicated to all. Stakeholders should get the opportunity to give feedback on continuous basis till the change is accomplished.

For a sustainable change, the strategic plans, systems and procedures need to be modified involving stages of 'unfreezing', 'change' and 'refreezing', but in Pakistan, restructuring was done half-heartedly.

Despite restructuring in the CBR, the World Bank is not satisfied with the revenue mobilization and enhancement in the tax base. Hence, again restructuring. Same is the case with the PTCL and the OGDCL.

According to reports, the federal government is likely to allocate a sum of Rs14 billion for the restructuring of the PTCL and the OGDCL. In the light of the experience, it is essential that maximum feedback is sought from the employees with regard to problems and their solutions.

It would be appropriate employees with relevant skill are inducted with decision-making powers. To manage the change effectively, it is advisable to induct experienced consultants from outside.

For an effective change, the client's needs and aspirations should be taken care of. The change should not be taken as a rigid programme. Priorities should be flexible. Problems arising at various stages must be understood and managed so as to reach the set goal.