The impact of strategy change on morale, performance and commitment

Abstract

Strategic change within an organisation is inevitable. Due to the competitive global landscape, organisations have to continuously adapt their strategies to remain in the market. Strategy change is most often met with resistance, and more so when the change involves downsizing. The effects of downsizing on employee morale, performance and commitment have been studied by numerous authors and a number of models for strategy change implementation consequently suggested. However, South Africa is faced with very particular challenges when dealing with change, including a high level of unemployment, fierce resistance to change in the form of collective action such as strikes, stay-aways or go-slows, political and social transformation happening simultaneously, global competition and the conflict between social and free markets within an emerging economy. Irrespective of the vast amount of international literature available on change management, there is a distinct lack of literature investigating the impact of strategy change in an emerging economy and a knowledge gap in terms of applying existing change theories in non-Western environments. This study was aimed at determining the impact of strategy change, particularly downsizing, on employee morale, performance and commitment at a global South-African based Telecommunication Company. The objectives of the study was to determine whether employees in South Africa are negatively affected by downsizing, and provide useful information to strategic managers in terms of implementation of strategy change in a South African environment.

To determine the impact of downsizing as a strategy change, a questionnaire was designed based on the literature review to ascertain responses to three sections of questions, respectively measuring morale, performance and commitment. A sample of the target population was chosen based on their position/ employment type i.e. management, supervisor or general staff.

The results of the empirical study revealed some very interesting points. Although all respondents demonstrated optimism in terms of their morale, performance and commitment, it was found that comparatively, managers are more negatively impacted during times of downsizing. The Telecommunication Company’s structured nature, advances in political and social reform, and solid Training and Development policy shielded the employees from the full negative impacts of downsizing because of their positive core self evaluation. The substantial amount of neutral responses (especially under management) indicated that not all respondents revealed their true feelings, a common characteristic amongst collective people. It also surfaced that even though the majority of responses indicated positive morale and performance, most respondents were considering positions outside the organisation. Based on the literature review and results from the empirical investigation, a model was proposed to assist strategic managers in South Africa with change implementation.