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IMPACT OF CHANGE IN ORGANIZATIONAL STRUCTURE
AND CHANGE IN TECHNOLOGY ON EMPLOYEE
PERFORMANCE; MODERATING ROLE OF
TRANSFORMATIONAL LEADERSHIP
An Independent Research Study
ZILL -E- HUMA
1467156
MSPM
SUPERVISOR
SIR FAROOQ RASHEED
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Acknowledgement
First of all, thanks ALLAH ALMIGHTY for his mercy and guidance in giving me full strength to complete
this Report. Many thank to my colleague M. Faheem and Farooq Rashid my supervisors for their
guidance, support and advice at every step.
I am especially grateful to my family for always supporting me. In particular, I am grateful to my father
and mother.
I wish to extend my sincere gratitude to the people who supported me and provide the necessary
encouragement to see the research to the end.
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Abstract
This study reports on Impact of change in technology & organizational structure on employee
performance and role of transformational leadership as moderator. The world is no more like the
way it was some years ago, with this advancement in technology everything has been changed.
It’s not just technology is rapidly advancing but human behavior is now changed totally. Since
technology is transforming everything, it has transformed human beings as well. This has led
human to learn new ways to plan, act and manage their work. Since its happening so fast,
Cooperate sector can’t survive if they are not getting synched with these new advancement in
technology and management framework. There are certain reasons to adapt these advancements,
which is certainly not the point of focus in our study but these changes are impacting the
employee performance working in these organization. These changes can impact both positively
and negatively on employee performance depending upon, how changes have been planned to
implement. Managing the change and engaging the employee to understand and positively
respond to change, does require involvement of transformational leadership. If transformational
leadership is not able to engage and involve the employee, there is always change getting
rejected by employees, eventually leads to loss associated with need to subjected change. In this
study due to time constraints we have focused the IT industry in twin cities. We have collected
data from 131 respondents, it was also difficult and time challenging to collect data from the
respondent physically so data was also collected via online. The test used for the study is
descriptive statistics, regression, correlation and Andrew test to check moderation. The data
gathered shows results that there is significant positive relationship between the employee
performance and change in organizational structure and change in technology but
transformational leadership does not play moderating role. If they would have played their role
more effectively then there will be always more powerful results. As stated earlier around 70%
changes doesn’t get successfully implemented. In our case (sampled data) the transformational
leadership can be one of the obvious reasons behind failure.
Key Words:
Employee Performance, Change in Organizational Structure, Change in technology,
Transformational leadership
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Table of Contents Acknowledgement ........................................................................................................................................ 3
Abstract ......................................................................................................................................................... 4
1. INTRODUCTION ..................................................................................................................................... 7
1.1Background .......................................................................................................................................... 7
1.2 GAP ANALYSIS: .................................................................................................................................. 11
1.3. Problem Statement .......................................................................................................................... 11
1.4. Research Objectives ......................................................................................................................... 12
1.5. Research Questions ......................................................................................................................... 12
1.6. Significance of Study ........................................................................................................................ 12
Chapter 2 ..................................................................................................................................................... 13
LITERATURE REVIEW ................................................................................................................................... 13
Review of Literature ................................................................................................................................ 13
2.1. Change ............................................................................................................................................. 13
2.1.1. Change Forms ........................................................................................................................... 14
2.2. Change in Technology ................................................................................................................. 17
2.3. Change in Organizational Structure ............................................................................................ 20
2.4. Employee performance............................................................................................................... 23
2.5. Transformational Leadership ...................................................................................................... 26
CHAPTER – 3 ................................................................................................................................................ 31
THEORETICAL FRAMEWORK AND HYPOTHESIS .......................................................................................... 31
3.1. Theoretical Framework .................................................................................................................... 31
3.1.1. Variables ................................................................................................................................... 31
Model ...................................................................................................................................................... 32
RESEARCH METHODOLOGY ........................................................................................................................ 33
4.1. Sample Selection .............................................................................................................................. 33
4.2. Population Frame ............................................................................................................................. 33
4.3. Sampling Technique ........................................................................................................................ 33
4.4. Type of Study ................................................................................................................................... 33
4.5. Data Collection Strategy .................................................................................................................. 33
4.6. Data Analysis .............................................................................................................................. 34
4.7. Statistical Techniques ................................................................................................................. 34
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4.8. Software ...................................................................................................................................... 34
4.9. Reliability ......................................................................................................................................... 34
CHAPTER-5 .................................................................................................................................................. 36
ANALYSIS AND RESULTS .............................................................................................................................. 36
5.1. Demographic Analysis ..................................................................................................................... 36
5.2 Descriptive Analysis .......................................................................................................................... 38
5.3. Correlation Analysis ......................................................................................................................... 39
5.4. Regression ........................................................................................................................................ 40
5.4.1. ANOVA ANALYSIS ...................................................................................................................... 41
5.4.2. Coefficients ............................................................................................................................... 41
5.4.3. Collinearity Diagnostics ............................................................................................................. 43
5.4.4. Moderation Test ....................................................................................................................... 44
5.5. Discussion ......................................................................................................................................... 46
5.6. Conclusion ........................................................................................................................................ 47
5.7. Managerial Implication .................................................................................................................... 48
5.8. Limitation of study ........................................................................................................................... 48
5.9 Future direction/Recommendation .................................................................................................. 49
References .................................................................................................................................................. 50
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1. INTRODUCTION
1.1Background
Organizations are the framework that is represented by individual rules, it develops advances,
progress, face difficulties, and struggle and adjusts, and subsequently change turns into a
characteristic that is experienced by each organization. Change is basically an adaptive response
by the organization, going about in general or through subsystems with particular capacities, to
keep up itself in equalization with a changing environment.
According to Kotter and Schlesinger, (2008), there is increase in market and opportunities that
results in the increasing the revenue and organization growth that is due to change in
organization rapidly. Change in organization means organization transformation.
Change in organization is a serious problem that is faced by every manager, leader and employee
in their career at some point; this is why it’s very vital to find out the change and its impact.
According to Amy Taylor-Bianco and John Schermerhor, (2006), Employees are expected to
perform well and accept change and give their commitment to change and achieve the goal
without any drop in their performance at same time. It results in stress and exhaustion.
When there is change in an organization, employees will have the feeling of nervousness, lack of
confidence and stress e.g. there is downsizing, merging as citied in or restructuring in
organization. Change often brings opportunities and one should avail this but there is always
shown some resistance to accept that change. Change is extremely personal and powerful (Duck,
1993), while some people, change generates fear, hesitation and ambiguity (Pieterson, 2002) as
cite in (Dulger, 2009).
When there is change in organization the leaders have great ability to lead the employees to
better ways. It also implies that leaders can motivate their workers and progress the organization
in innovative path gave the latest course that is in simultaneousness by their key qualities (Pierce,
2003).
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Employee in an organization may have fear of change to the organization culture, management
and environment. It’s very critical that people should be bodily and emotionally involved to the
organization that affects the organization efficiency and effectiveness and eventually impact the
achievement of goals of organization and employee performance.
Change in organization may impact employee performance differently. It’s just depending on the
employees how they take it and what kind of working environment they consider. Employee
will be contribute their best and will be highly motivated to when they feel more comfortable in
organization they are working. (Isaksen, et al, 2001).
Basically people are physically attached to their organization when there is change occur in
organization there is need and also ability to adapt in changing environment. Change is
inevitable one can’t avoid change, so there is need not only adapt that change but also have skills
how to manage that change so it will not affect employee performance and it won’t be drop.
(Jimmieson, 2003).
According to Stassen (2008), when there is change in organization employees usually accuse top
management because they are the one who execute changes like hard rivalry, swings in the new
place of market or technology innovation.
Employees are very important assets of an organization when the change is happened to
organization employees often feel nervous and stressed because they are used to work in old
environment so they are reluctant to accept that change. According to Nicolaidis and Katsaros,
(2007), change may impact the employee performance negatively so it will reduce employee
productivity and morale and if employee performance drops it will definitely affect organization
reputation and profitability.
When organization planned to bring change, and if it don’t involve employees in the process of
change then employees might feel they are not part of organization. Because they might think
organization disbelieves themselves that result in the little enthusiasm and self esteem between
the workers. There are a number of organizations in which decisions are made by top
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management they don’t involve workforce to provide their suggestions in decision making.
Employees can only follow the decision of top management which results in the decrease of
employee performance.
Nowadays in business world human being is considered as most important factor. So when there
is change employees are very important to be put first because the most critical challenge is to
guide the workers to the similar way for the booming results. According to Baca,(2005),
Members of team are the people who spin straw into gold and produce product or services. As
they are given with obvious background and their involvement to bring changes that necessary,
they bring outcome with superior quality.
According to Wilson, (1998), Change in an organization now become an important purpose for
sustaining achievement and building competitive advantage. Success of organization has been
associated to capability to confront, grip and maintain change.
So change is inevitable and change can be anything. There can be many changes but in this
research I am focused on Change in technology and change in organizational structure. These
changes are among most important changes which decide the future of any organization. With
this speed in evolution of science and technology, organization needs to embrace technology and
implementation related changes; for their survival. It’s not just technology is getting changed
every moment but humans are also learning new ways/methods to get more effective and
efficient which can also lead organization structure change. As long as organization is moving
ahead, there is always need to expand organization structure vice versa is the case lay off to
remain positive in terms of $$. Same is the case of individuals either they keep switching for
better opportunities or company do the lay off. In both cases heads will be changed. All these
changes ultimately impacts the performance of employees associated with the organization.
There are a lot of writers of articles and books who emphasized on the importance of change and
its supervision. Changes can be compared according to size and speed (Mike Young, 2009)
According to Van de Ven and Poole, (1995), changes can be due to happening of occasion,
continuity and level (Tushman & Romanelli, 1994; Quinn & Weick, 1999) and extent of
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intricacy and consistency (Rowland & Higgs 2008). Though all of them did not work on how to
implement and manage the change successfully.
To implement change successfully this is very essential to be aware of how workers react to the
change and what should be done to enhance performance of the employee. Despite of change
being planned or not, it affects performance of employee, if it’s not properly taken care of it
results in the unwanted consequences.
70% of change initiative is failed to achieve because it’s not properly managed and implemented.
Managers as leaders play a very essential part revitalizing the change, development and
achievement of organization. So leadership with effectiveness is highly demanded for successful
implementation of change. Employees often feel reluctant to accept change. So how change can
affect the employee performance and establishing abilities that advantage whole team is very
significant to execute change that makes a successful progress in performance.
Aim of the study:
Change is inevitable and there is no way one can avoid change. Furthermore, with this pace the
technology is evolving and human sense to manage things is also getting improved day by day.
This results in changes within the system, structure and management styles. On other hand there
is always resistance for change because it cause disturbance to status quo. Though changes bring
opportunities to organization, business and employees, but there is always resistance to it. In this
study we will focus on these challenges, especially w.r.t. employee performance and how can we
manage changes with positive synergy across the board. This research aimed to identify the
impact of change on employee’s performance, to contribute the study of how change enhances
employee performance and obtain employees suggestion and how they reacts towards change.
One more reason of this research is looking for how fine employees are being directed
throughout change, with the aim of building up further strategies on leadership of change.
The research examines the impact of change in organization on employee performance. How the
change in technology, change in individual and change in organizational structure can impact
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performance of employees? What needs to be done to improve performance of employees and
how leaders motivate their employees and take them in confidence to accept that change and
perform better? How transformational leadership plays moderating role?
1.2 GAP ANALYSIS:
Humans are facing changes since their existence, so it’s not something new for them. There is
already a lot of research being done on change and change management.(Al-Jaradat.O,
Nagresh.M, Al-Shegran.A, Jadellah.N, 2013).Furthermore, how it impacts projects, organization
and business is also being thoroughly studied. Our research revolves around micro level impact
of change i.e. impact on employee performance. Employees being drivers to implement the
change and embrace the change, it’s very important we should explore how the change and
change management affect individual performance. How change should be managed throughout
the lifecycle in order to get better acceptance and support from employees. This research is
already done in universities of Jordan but we are conducting this in Pakistan in different
organization in order to evaluate the impact of change on employee performance in Pakistan and
new thing is we are testing transformational leadership as a moderating variable.
1.3. Problem Statement
Many firms that are facing changes not efficiently administer the change that occurred in the
industry which ultimately brushes them off. The reduced endurance rate specifies a lack of basic
and suitable frame work of how to execute and administer change in organization. This shows
that there is so much to learn about how to manage and supervise the change. This research is
conducted to reveal the unseen details of how technological and structural change is distressing
the employee performance. Despite of the fact how crucial or important a change is, it always
seek attention from employees. Humans being driver to implement the changes, it’s very
important they are in full cooperation to implement the change. With lack of interest and focus
from employees no change will bring the desired impact. Furthermore if change is not effectively
supervised, there is the propensity it impact performance harmfully which lead to total shutting
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down of the organization as it ensues to many organizations, results in loss of valued employees
or failure to meet.
1.4. Research Objectives
1. Assess the impact of change in technology, change in organizational structure on the
performance of employees
2. Identify the extent of leadership ability to implement the desired change with employees
full support
3. Highlighting the main problems and obstacles that may face change
4. Find solutions and recommendations to make change an acceptable process for
employees in general
1.5. Research Questions
1. What is the impact of the change on the performance of employees?
2. How can transformational leadership facilitate the change keeping employee
performance getting affected less?
1.6. Significance of Study
The research will reveal the different aspects which can lead to disaster if employees are not in
support to the change. Employees being driver of any organization, plays pivotal role in success
of any organization. Change itself can be great for organization but ultimately change can never
be successful without support of employees. So, here comes the role of transformational
leadership to properly communicate positive impact that change can cause for themselves to their
employee. If value of change is not being communicated to employees, they will not be able to
understand the reason for happening of that change. Furthermore, transformational leadership is
also required to facilitate employees with trainings especially when there is change in
technology.
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Chapter 2
LITERATURE REVIEW
There are series of research carried by researchers including secondary data in order to get
related information. The research already done by different other researchers related to this topic
has been studied, it helps to present more ideas how to carry out that research and summary
regarding to preceding research about this issue will be discussed. In these research different
case studies, articles and academic journals are the source of information used as a reference.
In this research, organizational change affects on performance of employees; we are specifically
targeting IT sector. There is diverse statement and opinion from diverse resources, on the basis
of collect data, there are basically two factors that being studied change in technology and
structure. These changes are among most important changes which decide the future of any
organization. With this speed in evolution of science and technology, organization needs to
embrace technology and implementation related changes; for their survival. It’s not just
technology is getting changed every moment but humans are also learning new ways method to
get more effective and efficient which can also lead organization structure change. As long as
organization is moving ahead, there is always need to expand organization structure vice versa is
the case lay off to remain positive in terms of $$. Same is the case of individuals either they keep
switching for better opportunities or company do the lay off. In both cases heads will be
changed. All these changes ultimately impacts the performance of employees associated with the
organization. The definitions and theories regarding to dependent and independent variables will
be discussed.
Review of Literature
2.1. Change
According to dictionary change is making something different from what it is. Change is
basically to adopt an idea or new behavior by organization as change in structure assures
resource reconstruction and potential to enhance capacity and to develop values and
improvement returns and outcome to stakeholders in the organization.
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For organization to exist and survive, be successful and stay in competition in today impulsive
and continuously developing business environment, it is very essential to handle the necessary
changes. Change is a still very important characteristic of organizational life, both at the strategic
and operational level. Because of its significance, change turn out to be vital and requires proper
managerial strategy and capabilities (Burners, 2004).
According to Balogun and Hailey, (2004), change is basically generated by external and internal
factors that appear in all shapes, forms and sizes .Its proved that pace of change is greater in
today business environment; there are no of ways to manage the change properly despite of its
complexity.
2.1.1. Change Forms
Incremental versus Radical Change:
Incremental change is change that occurs constantly in organization, they are not minute
changes. For example change in organizational structure, new technology introduction, major
modification of staff practices they are huge and considerable changes but it mostly take place
within organization. These changes are very significant and they are used to enhance
performance (Johnsons, 2008). The reason behind this incremental review is situation is
continuously changing and incremental change being a constant practice is the solitary mean to
save the company prospect and maximize the performance.
On the other hand Radical change is a change that impact overall organization system, and
basically redefines what the organization is or changes its fundamental frame, counting people,
process, structure strategy and even the core values in some cases. According to Johnson and
Scholes, (2007), this is basically used to deal with basic issues especially in a few conditions
such as after fluctuation and unforeseen fast environmental changes.
Proactive versus Reactive Change
Reactive change is basically changed that is executed in response to some serious managerial
problem or internal operation or due to some serious external affair. Reactive change is basically
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changed in the policies of organization that is executed in response to happening of an affair.
This change is starting because of some exterior forces pressure. Changes are inevitable and they
are made in reaction of some situation (Bennis & Thomas, 2002). Organization makes changes to
cope with the crisis in a rapid and usual way as they have not enough time to observe the
condition and develop a well-conceived plan. The environmental actions, a variety of
opportunities and threats are responded at once.
Proactive change is basically change in which organization is not presently facing some critical
issue but managers foresee the there is change require in organization in order to solve present
issues. Change is generally preferable through this anticipatory approach, most of the
organizations lean to take reactive approach in practice, mostly as an outcome of commonly held
view that if the performance is not adequate currently then there is no need for change.
Developmental Change is a development in the doing thing as an old way, with the intend of
doing additional and improved things (Costello, 2004). The example of this is when an
organization is revising its methods, policies and procedures which have turn out to be unsuitable
to its operation. Activities in this consist of analytic, guidance to progress technical expertise,
improving communication and developed better processes.
Convergent Change is basically consists of series of incremental changes so it is analyzed as
developmental changes. It is focused on incremental alterations to environmental innovation and
constant development that enhances an organizational fit in its environment. As it is planned and
proactive approach, organization that implements convergent changes are better prepared to
sustain an excellency in presentation and conquer the challenges that are external. (Kantar &
Peter, 2009).
Transitional Change is happened when to implement something new in already existing thing.
It is basically execution of an identified condition e.g. assembling old operating method. This
sort of changes is usually occurring over a period of time and demand tolerance on the behalf of
all members of organization. For instance of execution or implementation of new product line,
innovation of new technology or computerize the management information system (Costello,
2004).
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According to Warrilo, (2010), to manage change strategy used is basically to embrace that
change and express it towards the constructive input of a known company. The company should
have know-how about the strength and weakness of any change before that strategy is
implemented, needs of their clients and nature of environment in which they are implemented.
For this purpose SWOT analysis could be used as benchmark for performance of organization in
opposition to range of external and internal comparators. (Camp, 2009).
Change usually entailed the prologue of novel process, measures, working attitude and personnel
which impact different stakeholders in a firm directly. The key to manage the change
successfully lies in accepting how the change initiative affects stakeholders. Will employee be
resistant, pessimistic, enthusiastic or scared about the change that you bringing in organization?
How can this reaction be predicted and managed? When you think to bring some change in your
organization, you should be taken care of and aware of how that change will going to affect
clients, stakeholders and other people in an organization. So do new processes, procedures,
policies, new vision, new values, new replacement of business and new computer equipment
installation. According to Hemamalini Suresh,(2001), these confronts may marked themselves
beneath diverse names or other appearance but are necessarily the leadership challenge, we know
the leadership is very intensifying for the success of any organization, without the commitment
and involvement of any leaders change can’t be proficient.
People who are usually there to implement change are also soliciting to do obligation. Resources
of organization should be allocated to facilitate employees in understanding the change that is
about to happen, encouraging them about its importance and value and deal with the resistance.
So the leaders develop perceptive and promise the extreme resistance to change, and emerge the
terror of not knowing, is deserted and swapped by the courage to take innovative guidelines and
directions and keenly follow change.
It is human nature to resist to change, every human being and therefore every organization that
currently exist, has clear understanding of them and feel comfortable with their present
environment, so it is not easy to bring new knowledge, new skills into an organization. People
frightened change. So it is the responsibility of management to direct incorporation and level the
way by trusting everyone in organization aware of company goals and aims and latest
capabilities playing important role.
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Change affects every organization. But change initiative still fail at alarming rate the most
important reason is it does not consider how it is going to affect people in an organization. So in
order to make the people embrace change and direct it to positive contribution it is necessary to
adopt strategy to effectively manage that change. We should not only consider the conditions but
also chosen executive style when adopting strategy (Warrrilow, 2010).
According to Kotter and Schlensinger (2008) presented the six different ways to overcome the
resistance but they concluded the most important is communication and participation. It is very
essential to discuss the changes freely with employees in order to avoid rumors and grapevine
(Lynn, 2009).
Several authors (Strebel, 2004; Maurer, 2006; Sohal and Waddell, 2008) emphasizes that the
motivation for change initiatives breakdown can be found in resistance to change. According to
Ansoff, (2000), resistance is a fact that affects the process of change, impedimenting its
commencement, barricading or delaying its execution, and escalating its charges and usually
dropping performance of organization. On contrary, reluctance is behavior that tries to keep the
status quo, and then prevent change (Rumelt, 2005; Maurer, 2006). According to Waddell &
Sohal (2008), resistance is also measured as a information basis; helpful in find outing how to
create further thriving change progression thus it’s not a unenthusiastic notion as it depicts
managers positive characteristic that are not appropriately measured in the change progression..
Technology change and environmental scenery to the ways change can be proficient, which they
assemble with company agreements and communal factor in groups they label organizational
work setting. The change has three different stages in organization (a) designed intrusion develop
changes in the company setting of work; (b) these changes results employee to modify their
attitude (c) the change in employee attitude affects organizational progress and employee
growth, the main organization outcomes.
2.2. Change in Technology
Technology is not only important for government or a company it is also very important for
whole nation. Organizations cannot run with old technologies. Employee performance is
intimately associated to technological change and technological innovation. Technology change
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could be efficiently managed through human resource joint approach. When employees use
technology with ethical values and for organizational benefit it enhances the employee
performance. (Nadeem & Huzaifa, 2014).
New technology can be use for both make or break purpose. With new technology employee
workload can be reduced, organization don’t require more employee to do single job.
Technological advancement has huge influence on employee performance (Nohria & Gulati,
1996). It’s significant factor for improvement of employee performance (Hitt et al., 1997). Most
of studies have repeatedly shown a positive relationship between a firm’s technological
advancement and performance, and concluded that technological advancement is important for
employee performance (Foster, 1986).
In today world of increasing high technology changes, technology advancement will constantly
fasten the future. According to Hampel and Martisons, (2009), technology advancement change
firm strategies and policies. In any organization, mostly challenges are established due to
competition, technology innovation, increasing employee efficiency and new management and
leadership and increasing growth. (Madsen et al, 2005). According to Bernerth, (2004), several
research suggested that for success of organizational performance, there is need to develop
employee behavior and attitude.
Many organizations indulge employee for execution of technology advancement. Before
bringing up new technology organization needs to improve employee skills, knowledge and
develop employee, for this purpose they conduct training. They should make sure that employees
union to deem the technology advancement effects on their own physiology. According to Dauda
and Akingbade, (2011), employees who are working under both old and new technological
system they show less positive attitude and it is very important for organization they show less
commitment and results in turnover. So organization should motivate their employees to adopt
new technology and grant them incentive in order to get their better performance.
Furthermore organization acquire advance technological tools for improving communication,
performance of employee, job task facilitation, enhance efficiency and effectiveness. The way of
performing job has been changed by introducing new technology. Technology advancement not
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only reduces the time completion time and working effort of employee but also improve the
performance of employee.
Technology advancement is a procedure of merging and restructuring knowledge to produce new
ideas. According to Mumford, (2000), the technology development has an impact on
organization performance. According to Huselid, (1995), there is very close association between
technological advancement and employee performance because technological advancement
comes from internal advancement which eventually comes from capability of employees.
According to Dauda and Akingbade, (2011), when technology use ethically and productively and
merge it with other resources effectively it will results in improvement of performance and
augmented productivity.
Advancement not only improves employee performance and make them effective it has also a
great impact on organization performance (Deng & Li, 1999) as cited in (Naeem & Huzaifa,
2014). According to Chi et al, (1998); with the help of training employees can quickly obtain
new knowledge and more advancement competencies. Performance of employees is closely
associated with advancement of technology because it can be effectively managed with the help
of employees. Theory of resource based proposed that organizations resources are tremendously
essential for the organization development, and human resource is key of the organization. The
purpose of this resource depends on the employees’ aptitude and keenness and on human
resource management efficiency (Mumford, 2000).
According to Singh and Mohanty, (2012), through proper training and development organization
can improve its employees efficiency and skills. Research proves that the organization outcome
level rise, when there is investment on employee decision making, problem solving and
teamwork task. Organization adapts the training method which is constant with employees and
accomplishes the organization goal as well.
Because of the global environment organizations are bumped into various sorts of issues that
they have never confronted before. Most of the capabilities concerning job required that are
necessary for attaining goal of the organization. Organization should adopt these changes and
endow them with latest technology and create skills to use that latest technology (Khan &
Farooq, 2011).
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2.3. Change in Organizational Structure
Organizational structure can be defined as a system which connects and co-ordinates individuals
within the framework of their roles, authority and power. Organizational structure is a useful tool
that directs individuals’ behaviors through shared values, norms, and goals (O'Neill et al., 2001;
Liao et al., 2011). According to Tran and Tian, (2013), it’s a technique in which by allocation of
work roles and activities organizations are integrated and differentiated themselves.
In current years, researchers have found out to conclude which structure brings the most benefits
for organizations and they have proposed that organizational structures should be alert of to a
variety of individual needs in businesses (Conner & Douglas, 2005). One of these extensively
used structures is presented by Burns and Stalker (1961) marked as a mechanistic and organic.
Mechanistic organization structure is characterized by centralized functions, highly formalized
and standardized. Therefore, in mechanistic organizations people have evident perceptive
regarding responsibilities of their job and it is likely of them that they have to follow certain
rules and guidelines stated by procedures, policies and practices.
Contrary to this, organic organizations are more flexible, flat and adaptable to environmental
conditions, so behavior of employees directed by shared goals, norms and values. Furthermore,
organic organizations have uniqueness like informal authority network and informal
communication network and opportunities so that they participate in decision process. (Veisiet
al., 2012; Danzfuss, 2012; Dust et al., 2013).
Hence, organizations should design their structures according to organizational strategies,
external and internal conditions of working environment. It is because organizational structure
has great and major effects on both organizations and employees.
The problem with majority of organizations is which organizational structure they bring into play
and work with. The cram of how workers respond in the direction of these structures and how
they execute can demonstrate how significant it is for organizations to execute the right structure
for their explicit situation the organization is exerting in.
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The attitude of employee performance shows how the organization performs, and staff does their
job properly only if they are comfortable with working environment. Now if an organizational
structure has an impact on the act and employees approach then organizations must revise these
issues and apply innovative structure to develop employees, provide them a creative and
inventive working panel to attain the competitive edge and benefits.
The authoritative structure is the mean of working together, how every change is put into
practice and how depiction of occupation is made, how association correspondence will work
and the strategic plan for productivity enhancement. Organizations endeavor to be the best rival
so presently if the structure they are using can have an impact on how workers are beneficial,
they ought to review this, and efficiency ought to be high for any association to accomplish the
upper hand. Be that as it may, if low can bring the association down the channel
According to Wohner, (2011), the elements decentralization, centralization and levels of
management are the fundamental establishment of any structure. Yet, by what method can the
structure affect the representative's execution and state of mind? Subside Christensen has
perceived the premier goal in the investigation of representative's association with hierarchical
structure. He said that Maslow's hypothesis of necessities recognizes the protection and
wellbeing needs, and is sheltered to utter that all representatives with safety and wellbeing in
their workplace will have a optimistic response to the administration and hierarchical structure if
composed accurately. How would we offer representatives security and wellbeing in a
workplace, one work on the state of mind and execution of every worker. By investigative this
issue and edify it from functioning states one can have a structure that assists representatives
react superior and work harder and faster.
According to Carpenter, Bauer & Endogen, (2009), Organizational structures are the
synchronization of a specific organization’s employees and team work. If an organization
synchronizes the employee’s effort they are able to attain all goals and objectives set. In spite of
the fact that it has the best structure it is not something the company ought to leave and not deal
22
with, a portion of the best structures have fizzled because of absence of administration and it is
not the appropriate structure for the environment the association works together in.
There are two major types of structure, A hierarchical management structures (traditional
structure).A flatter and more open "humanistic" management structures (New modern
structure).(Organization Structure: the two main types 2011). Traditional organizational
structures represent the boundary between the management level and the lower levels (normal
working employees). This is fundamentally to demonstrate that administration is first on the
progressive system and that all choices must be made by them. Though representatives are seen
as base inhabitant and they are not essential in their workplace, this on the other hand presents
the administration more stretch and affects the preparation and inspiration for whatever is left of
the workers. There then takes after a response on worker state of mind and how the
representatives demonstration towards administration.
The distinction between the new structures and the customary structures is that there is no
reasonable limit amongst worker and administration in the new structure, however as expressed
there is a few limits in the conventional ones. This kind of structure is all the more level and
open and representatives and administration can be seen as equivalent persons going for the same
objective. This gives representatives the privilege to utilize their inventiveness and gets rewards
for the work they have done. Rewards = fulfilled workers = positive representative state of mind
= higher efficiency.
Centralization is the process in which the decisions are made at high level, when the power of
decision making is only in the hand of top management then it results in the cart off the
inventiveness of workers and only direct workers to do what. So in the end employees will get
demotivated and not self-manageable, they could not solve problems on their own.
(Centralization and decentralization 2011).
Decentralization is a method where employees have authority to make decisions. The advantage
of this is it provides organization with ideas, more creativity and knowledge to work with. It
helps employees to better their approach if they fell wanted in the organization. (Centralization
and decentralization 2011).
23
Every organization whether they are small or big they want better performance and results and
vision of majority of companies is to perform better so they would be better than their
competitors. The fundamental capacity of an authoritative structure is to enhance basic
leadership and to recognize how the association is functioning and who has the power to settle on
the critical choices and what group works in which office and projects.
Representatives need to be perceived in industry or in their specialization. They get persuaded
when they are perceived. Then they shows the positive attitude towards the organization and the
management of the organization, so they perform better when their attitude change from negative
to positive, that’s what organizations want; better performance from employees. But if the
structure is build on old traditional type, employees will not be motivation, which results in a
lower performance. Not only this structure has a negative impact on employees but if
decentralized structure is not utilized in proper way it will also get failed. (Meijaard, Brand &
Mosselman. 2002).
2.4. Employee performance
Performance of employees in any organization is very crucial to establish organization
achievement and productivity. Every organization needs employees who don’t feel reluctant in
doing extra job than their daily work routine and give presentation that is further than the
potential (Chien, 2004). According to Aryee, Chen and Budhwar, (2004), employee performance
is also very essential and significant to organizational success in progressively more active
setting.
According to Grumen and Saks, (2010), at the present time, many organizations are facing
contemporary challenges and need more effort to increase employee performance. Thus
company should need to focus on recent trends in order to establish the employee awareness to
aid in the preferred higher economy. Therefore to take on effectual presentation, organization
should permit employee and give them right to devised their roles and jobs. As a result staff will
ascertain their jobs more fit between employee’s values, desires and skills. In addition to,
organizational daily practices and policies should cooperate well to make proceeding standard in
employees' performance.
24
Several authors recommend that successful organization will have to invest more resources and
have to manage the long term relationship in order to enhance job satisfaction and performance
of employees (Karatepe, Menevis Baddar & Uludag, 2006).
Moreover, these days frontline employees play a very crucial part, because they often interact
with the customer. Besides self competence, attribute, effort and competitiveness are utilized to
envisage progression of these employees. In the mean time self efficiency will weigh the
emotional and motivational workers reactions. Hence this will raise their confidence build them
to take pleasure in their work more.
According to Tavakolia, (2010) when there is change in organization it will affect employee
performance and generate feelings of stress among managers and employees. Due to change in
organization it results in behavioral and health problem. According to Krattenmaker, (2009),
there is various organizations they start to diminish or eradicate the increase of bonuses they
want to make change to survive with the economic downturn.
Performance of employees will be dropped due to restructuring, downsizing, innovation and
merges in the companies (Tavakolia, 2010). Hence employee performance might also be affected
by the location, quality and quantity of work, time and responsibility. Moreover Levay,(2010),
recommend that when there is change in organization it will confront the values and interest of
staff and climax calamity on the resistance to change.
According to Ramlall, (2004), he figured it out that low motivation results in drop in employee
performance and various other behavior within organization. Furthermore 86% of employers
they were facing trouble to draw skillful employees and 58% of organization is actually facing
difficulty to retain high performing quality employees. Moreover according to Chiang and Jang
(2008), the change in organization will also reduce performance of employees by long working
hours, low pay and nature of work that results in high turnover.
According to Pepper and Larson, (2006), company acquisition will also develop different
communication issues vulnerable not only performance of employees but also affect success of
communication from top to bottom of organization.
25
According to Krattenmaker, (2009), In order to reduce such issues, well communication
regarding employee consideration system should be executed to give workers improved
consideration about their progression. In addition to, that will be also a huge chance to aware of
gap between actual and preferred performance in the goal of organization. Therefore, when the
performance appraisal is ended properly, organization may evaluate the cost vs. benefit the
performance of employee. Hence if it’s measured correctly the benefit can value the effort.
A Human Resource Specialist, Hargrave said that employee should be give authority to equal
participate in decision making process. In the mean time leadership such as coaching and
counseling plays a very crucial role to improve employee performance. Therefore organization
also wanted to have expert and high performing employees in company, so they donate their role
and responsibility which are required when there is change in company. Furthermore,
Oppenheim says, employee who feels reluctant to change, leader have to make sure that have
fine logic of the company‘s present changes requirements and constantly monitor the employee
analyzation regarding their own job.
In addition to, the reward allocation is playing very crucial role like employee will contribute
high in their performance when they get the fair reward. (Aryee, Chen & Pawan, 2004).
According to Hon and Lu, (2010), these processes of allocations are the insight of managerial
fairness, technical righteousness that can be completely linked with managerial outcome such as
satisfaction of job, accomplishment of task and organizational commitment. Thus these factors
enhance performance of employees effectively.
Besides, some author’s recommend that use of member of staff expansion be able to increase
character supervising and results in get better of performance of employees while determined by
the issue of downsize, reorganization activities and merger. (Portwood, Hochner, Hollady,
Koziara, Davis, Daymont, Blau & Andersson, (2008). According to Portwood et al, (2008)
practices employee development involves service related training, coaching and empowerment
can well develop employee and enhance organization performance.
The Customer Orientation of service Employees (COSE) put forth the undeviating effect on a
variety of workers and organization performance for example employees service commitment
and effort, job satisfaction. According to Siddiqi et al, (2009), the most influential employee
26
service attempt will results in higher employee motivation. Moreover work fulfillment will
enhance on mark choice and assist client by shunning the delay in customer’s service.
Present expectation result of the IT is base on the custom-made solutions and quality services
from the IT operations. Nowadays performances of IT operations are essential conclusions from
the workers and the teams, they have responsibility to produce and supply services. Hence, the
transformational leadership plays important part in advancing the workers performance (Cheng,
Lee, Kee & Yeung, 2011).
2.5. Transformational Leadership
As nature of leadership is it complicated so leadership is considered most complicated and
difficult phenomena. With this view leadership considered as least understood phenomena on
earth. There is various definition of leadership, according to Cole, (1996), he defines that in
order to accomplish group task one individual has to influence other individual and it is a
dynamic process. Murphy, (1996), defines leaders as people “to whom others turn when missions
need to be upheld, breakthroughs made and performance goals reached on time and within
budget”. Moreover he proposed that leaders excel the problems of the instant to divulge the
potential of human nature via perseverance and intelligence”.
According to Rost and Barker, (2000), Leadership is also considered as the influential
relationship between followers and leaders who propose actual changes and results that shows
their share purpose. Thus leadership means different things to different people. As there is no
proper definition of leadership but mostly consist of a few fundamental essentials that leadership
is dynamic procedure, leadership entails perseverance, authorities, and aptitude and occur within
a set context, leadership arbitrates in personal investigation and expansion and leadership
involves aim accomplishment on schedule, within budget, and specific quality.
Administration has an extraordinary influence on the representatives, supervisors, and
association’s execution. Initiative style assumes a vital part in persuading subordinates to get the
higher objectives (Wang et al., 2005). According to Wang et al, (2011) leaders who do different
parts will appreciate state of hierarchical adequacy. Likewise, the administration can build up the
27
association later on. In addition, there can be as far as the administrative styles, showcasing idea
and morals, administration, abilities of the general population and specialized administration.
According to Perry et al, (2009), the particular difficulties that pioneer confronted is incorporate
how to raise the remarkable quality of aggregate character and esteem in adherent's self-ideas by
connecting the hierarchical mission to association individuals and customer's personality and
worth. In addition, they likewise need to interface the part's employment practices to their
personality and quality.
Leadership is a course of worker behavior management like resign rate, job satisfaction and
performance and productivity in order to meet a basic objective in occupation contribution and in
addition responsibility to organizations (Politis, 2006). Therefore, leader is the person who is
most coordinated toward individuals and social correspondence, furthermore coordinated toward
the procedure of affecting individuals so they will do fine for their assignments and accomplish
the objectives of the association. According to Skansi, (2000).The majority of the workers saw a
leader as a decent person when there are a successful correspondence channel exists among a
leaders and employees, and the connection is normally impact and shared obligation is come to
The execution of an organization will enhance if employees are not hesitant to impart their
qualities and team up to each other's. According to Yukl, (1989), in order to motivate their
employee a leader can use punishment and reward system to do more than they are expecting in
order to achieve the goal of organization. It is supported by Webb, (2007), that the employee
who have performed worse a leader can motivate them by giving encouragement, consideration,
motivate and support the employees toward accomplishment of task and by giving a contingent
reward system that could also increase the motivation level of employees toward task
achievement and raise the production from the employees.
Leaders should not only depend on a single leadership if they want good outcome (Goleman,
2000) as cited in (Vigoda, 2007). You can likewise say that, no leadership styles are picked in
any circumstances. In this manner a mix or blend initiative style can upgrade and uphold a
procedure of company and raise the dedication of worker's and enhance work execution.
28
According to Vigoda, (2007), employee performance affected by different behaviors and
leadership style towards the job performance and task achievement. Thus, leadership style take
up by a leader is powerfully associated to job performance of employees.
According to Moss et al., (2009) Transformational leadership is a component of new leadership
that is related with morals, beliefs, long-standing goal and standards. It also consists of value of
follower’s inspiration, recognizing their requirements and wants. Besides, it is the process in
which person connects with others and develops a link that lift up the motivational level and
ethics in both followers and leaders (Northouse, 2007).
According to Yukl, (2002). It is the capability of leaders to get together the employees, promotes
and supports them to accomplish the goals of organization. It additionally set a higher desire and
rouses devotees to wind up a piece of bigger objectives, by changing their own conviction
frameworks, as well as to be the issue solvers
According to Muller & Turner, (2010), transformational leadership is known as competence to
bring about new foremost changes, with this point of view leaders aptitude to carry out changes
in company culture, strategy, vision and attitude. It also leads the innovation and creativity in
products, services and technology.
On the other hand, there is a transactional leadership that referred to the bulk of leadership
models and it particularly focused on exchanges among leaders and followers. While
transformational leadership focused on intangible objective like shared values, ideas and vision
for developing relationship, giving an enormous sense to individual’s activities and manages to
pay for common ground to the followers in environment that changes.
According to Burns, (1978), Transformational leadership is based on the individual principles,
attitude, morals and behavior of the leader instead of an exchange process between leaders and
followers. So, transformational leader pushed subordinate to put in an additional effort and to go
beyond what the subordinates expected before the subordinates of transformational
29
Leaders feel admiration, loyalty, respect and trust towards leaders and are motivated to perform
extra-role behaviors.
Transactional leaders lift up stability, transformational leaders develops significant changes in
employees and organizations as well. However, transformational leadership develops greater
effects than transactional leadership, on more-demanding projects specially (Mu¨ ller & Turner,
2010).
According to Ahadzie,et al,.(2008) A high performance workplace spotlight on increasing
people’s persuasion on the business and the impact of processes, methods, the physical
environment, technology and tools that improve their work as well. It has also invested in its
HRs and supports their technical and innovation skills.
According to Bass, (1990), transformational leadership has four components; charismatic role
modeling, individualized consideration, inspirational motivation, and intellectual stimulation.
Using charisma, the leader inspires respect, loyalty and admiration, and stress the significance of
having a collective sense of mission. By individualized consideration, the leader develops a one-
to-one relationship with his or her followers, and appreciates and thinks about their skills,
aspirations and needs. By inspirational motivation, the leader coherent an exciting vision of the
future, explains the followers how to accomplish the goals, and articulates his or her belief that
they can do it. By intellectual stimulation, the leader widens and raises the interests of his or her
employees and arouses followers to think about old problems in new ways.
According to Trottier et al, (2008), leaders that change their follower’s commitment and attitude
to the mission of an organization generally represent an optimistic and self-assurance behavior
and distinctiveness as they encourage workers by visibly state out the company future and
mission. However, for the transformational leaders it’s insufficient to assemble a vision, but
rather likewise motivate and encourage their employees to progress in the direction of that
vision.
30
Employee central goal valence will be improved when the organization main goal is justifiable,
recognizing and obvious. In this manner, it is not amazed that the transformational leadership
theory focused on the significance of obviously open a company objective as a component of the
procedure of moving and inspiring the staff toward objective and task accomplishment.
Workers with top notch association with their leaders will perform better than those who have
low quality relationship. Thus the leader shore up in the office is significant for the leader-
employee relationship. (Enders & Erdogan, 2007).
So, if it has an organization with high caliber, the workers will put into adequacy of organization.
Moreover, Borstorff and Marker (2007) likewise found that representatives need a trustful
pioneer who know them, comprehend them and treat them reasonably. Hostile leaders will make
clashes in specialist's demeanor for employment, association and life. Hence, be acquainted with
a decency treatment has imperative effect on execution of employees, and leaders backing will
likewise help workers to be fruitful later on.
31
CHAPTER – 3
THEORETICAL FRAMEWORK AND HYPOTHESIS
3.1. Theoretical Framework
3.1.1. Variables
3.1.1.1. Independent variables
Change in Organizational Structure and Change in Technology are independent variable.
3.1.1.2. Dependent Variable
Employee Performance is dependent variable.
3.1.1.3. Moderating variable
Transformational Leadership is Moderating Variable.
H2
H1
H3 H4
Change in Organizational
Structure
Change in Technology
Transformational Leadership
Employee Performance
32
Model
1. Hοa = Change in organizational structure does not affect employee performance.
H1a = Change in organizational structure affects employee performance.
2. Hob = Transformational leadership does not play Moderating role between
organizational structure change and employee performance.
H1b = Transformational leadership plays Moderating role between organizational
structure change and employee performance.
3. Hοc = Change in technology does not affect employee performance.
H1c = Change in technology affects employee performance.
4. Hοd = Transformational leadership does not play Moderating role between technology
change and employee performance.
H1d = Transformational leadership plays Moderating role between technology change
and employee performance
33
RESEARCH METHODOLOGY
4.1. Sample Selection
The sample size for this study is one hundred and thirty one respondents. I have calculated the
sample size through SS calculator by using Infinite population formula, it was around 96 that I
should get the data from 96 respondents at least but I have collected 131 responses from
respondents who are working in IT sectors in organization. I have collected data from employees
of IT sector of Mobilink, Ufone, Telenor, Huawei and MTBC. The key subjects for this sample
are program managers, managers and employees who are working in IT sectors of these
organizations in twin cities Rawalpindi/Islamabad.
4.2. Population Frame
Population frame will be IT sector in different organization in Rawalpindi/Islamabad.
4.3. Sampling Technique
We used non-probability convenience sampling to draw sample from population.
4.4. Type of Study
This research is cross sectional in nature and hypothesis testing will use to explore how the
change in technology, change in organizational structure can impact the performance of
employees.
4.5. Data Collection Strategy
The data is collected by using questionnaires, these questionnaires specifically being distributed
among different companies in Rawalpindi and Islamabad. The questionnaire of employee
performance adopted from article “The impact of organizational change towards employee
performance in banking industry.” by Wai.L, Fong.W.L, Ting.W.L, Ying.H.S (2011). The
questionnaire of technology adapted from article “Impact of change management on the
performance of employees in university libraries in Jordan” Al-Jaradat.O, Nagresh.M, Al-
Shegran.A, Jadellah.N (2013). The questionnaire of transformational leadership adapted from
article Padasakoff and his colleagues (1990) and Hackman and Oldem (1980) .The questionnaire
of organizational structure is adapted from article “Impact of change management on the
34
performance of employees in university libraries in Jordan” Al-Jaradat.O, Nagresh.M, Al-
Shegran.A, Jadellah.N(2013).
4.6. Data Analysis
The feedback of respondents will be quantitavely analyzed. Different numbers were specifically
assigned to the options on nominal scale and also to the options on five point Likert scale .After
assigning the numerical values, they were specifically added to the statistical tool for
management sciences software (SPSS) and analyze by using different statistical tool.
4.7. Statistical Techniques
Different statistical techniques are used in this study like regression analysis, correlation
analysis, moderation test via Andrew process etc.
4.8. Software
For Analysis of data SPSS (Statistical Package for Social Sciences) will be used.
4.9. Reliability
The reliability of questionnaires was checked through reliability coefficient Cronbach’s Alpha
that measures the precision and accuracy of the instrument and also check the consistency of the
scale items or dimensions of the measurements scale. For 7 items of Change in Organizational
Structure, 7 items of Change in Technology, 7 items of Employee Performance and 7 items of
Transformational Leadership , values of Cronbach’s Alpha are .706, .699, .733 and .780 which
are shown in Table 1. According to Nunnally (1978), if the value of Cronbach’s Alpha of
variables is greater than 0.60 so the variables are reliable. As the value of Cronbach’s Alpha of
all the variables are greater than 0.60 its means all variables in this research are reliable.
35
TABLE – 1
Internal reliability of the Study
Variables Cronbach’s Alpha Items
Organizational Structure 0.706 7
Technology .699 7
Employee Performance .733 7
Transformational Leadership .780 7
36
CHAPTER-5
ANALYSIS AND RESULTS
For this study the targeted population is Programme Manager, Managers and Employees who are
working in IT sector of different organizations and I have collected data from Mobilink, Ufone,
Telenor, Huawei and MTBC. SPSS (Statistical Package for Social Sciences) is used to
investigate the results and techniques used were regression, correlation and Andrew process is
used to test moderation. Employee Performance was treated as dependent variable whereas
Change in Organizational Structure, and Change in Technology treated as independent variable
and Transformational Leadership used as moderating variable.
All questions for dependent, independent and moderating variable were assessed on 5-point
Likert scale from “Strongly Disagree “to “Strongly Agree” and 131 responses were collected to
study all the variables.
5.1. Demographic Analysis
Some questions like Gender, Age and Professional Experience of respondents sought data on
demographic respondents.
TABLE – 2
gender of respondents
Frequency Percent Valid Percent Cumulative
Percent
Valid
Female 43 32.8 32.8 32.8
Male 88 67.2 67.2 100.0
Total 131 100.0 100.0
Responses were collected from 131 respondents, where male respondents were dominating by
67.2% and remaining 32.8% were females. According to gender the number of male respondents
is 88(67.2%) and females were only 43(32.8%).
37
TABLE – 3
age of respondents
Frequency Percent Valid Percent Cumulative
Percent
Valid
20 years and below 11 8.4 8.4 8.4
21-30 years old 87 66.4 66.4 74.8
31-40years old 29 22.1 22.1 96.9
41-50years old 4 3.1 3.1 100.0
Total 131 100.0 100.0
According to age majority of respondents were from group of age (21 – 30years old) 87
responses were gathered from age group of this category that is 66.4%. 11 responses were from
age group of (20years and below) that is 8.4%. 29 were from the age group of (31 – 40years old)
that is 22.1% and 4 responses were from age group of (41 – 50years old) that is 3.1%.
TABLE – 4
experience of respondents
Frequency Percent Valid Percent Cumulative
Percent
Valid
below 1year 11 8.4 8.4 8.4
1-5years 73 55.7 55.7 64.1
6-10years 35 26.7 26.7 90.8
11-15years 11 8.4 8.4 99.2
16-20years 1 .8 .8 100.0
Total 131 100.0 100.0
According to experience majority of respondents were having experience 1-5 years (55.7%).
35(26.7%) respondents were having experience of 6 - 10 years. 11 (8.4%) respondents were
having experience of 11- 15 years and only 1 (.8%) had experience of 16 – 20 years.
38
5.2 Descriptive Analysis
TABLE - 5
Table – 5 provides the descriptive statistics of studied values. It shows six different types of
values i.e. (total number of responses), maximum and minimum values, mean, standard
deviations, skewness and kurtosis.
As we measured our instrument on 5-point Likert scale from “Strongly Disagree” to “Strongly
Agree”. Mean values for all variables are close to four it means that shows most of values have
degree of agreement in our data set and deviation is also very low.
Skewness is used to check the symmetry in the distribution. Positive values show that
distribution is right tailed and right side is heavier whereas negative values shows that
distribution is left tailed and left side of distribution is heavier. In our Skewness value of all four
variables i.e. employee performance, change in organizational culture, change in technology and
transformational leadership are negative it means the distribution value of all of this is left tailed.
Kurtosis is basically to measure the tallness of probability distribution of the variables.
Distribution with kurtosis less than 3 is playtykurtic. Distribution with equal to 3 is leptokurtic
and distribution with excess than 3 is excess kurtosis.
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error
CS_Index 131 2.57 4.86 3.7263 .44582 -.284 .212 .671 .420
CT_Index 131 1.86 4.71 3.8190 .40009 -1.210 .212 5.962 .420
EP_Index 131 1.86 4.86 3.6107 .49203 -.689 .212 1.837 .420
TL_Index 131 1.29 4.86 3.7263 .48786 -1.328 .212 5.672 .420
Valid N (listwise) 131
39
By applying Jarque Berra test we have analyzed the data of all variables are normal. As its value
is greater than 2 then it means the data of all variables are normal.
5.3. Correlation Analysis
TABLE – 6
Pearson correlation of variables
Correlations
CS_Index CT_Index EP_Index TL_Index
CS_Index
Pearson Correlation 1 .327** .386** .473**
Sig. (2-tailed) .000 .000 .000
N 131 131 131 131
CT_Index
Pearson Correlation .327** 1 .280** .345**
Sig. (2-tailed) .000 .001 .000
N 131 131 131 131
EP_Index
Pearson Correlation .386** .280** 1 .555**
Sig. (2-tailed) .000 .001 .000
N 131 131 131 131
TL_Index
Pearson Correlation .473** .345** .555** 1
Sig. (2-tailed) .000 .000 .000
N 131 131 131 131
**. Correlation is significant at the 0.01 level (2-tailed).
When we want to check the association between two variables then we use the Pearson
correlation. Its values vary from -1 to +1, -1 shows the perfect negative correlations between two
variables, 0 shows no correlation between two variables and +1 shows the perfect positive
correlation between two variables.
Table – 6 shows the Pearson correlation between our dependent variable employee performance
and our independent and moderating variable i.e. change in organizational structure, change in
technology and transformational leadership and it is tested on 0.01 level of significance.
Correlation between employee performance and change in organizational structure is significant
(P < 0.01) whereas the value of R is 0.386 which shows that there is positive correlation between
40
both variable the change in organizational structure has positive impact on employee
performance
Similarly the correlation between transformational leadership and change in organizational
culture is significant (P< 0.01) whereas the value of R is 0.473 which shows that there is positive
correlation between two variables means the transformational leadership has a positive influence
and strengthen the relationship.
Correlation between employee performance and change in technology is significant (P < 0.01)
whereas the value of R is .280 which shows that there is positive correlation between two
variables means the change in technology has positive impact of employee performance.
Similarly the correlation between transformational leadership and change in technology is
significant (P< 0.01) whereas the value of R is 0.345 which shows that there is positive
correlation between two variables means the transformational leadership has a positive influence
and strengthen the relationship.
Correlation between strategic employee performance and transformational leadership is
significant (P < 0.01) whereas the value of R is 0.555 which shows that there is correlation
between both variables means transformational leadership has positive impact on employee
performance.
5.4. Regression
TABLE – 7
Model Summaryb
Model R R
Square
Adjusted R
Square
Std. Error of
the Estimate
Change Statistics Durbin-
Watson R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .418a .175 .162 .45035 .175 13.587 2 128 .000 2.161
a. Predictors: (Constant), CT_Index, CS_Index
b. Dependent Variable: EP_Index
41
Adjust R square should be less than R square it shows the closure look of variation. According to
model summary independent variable (Change in organizational structure and Change in
technology) accounting 16.2% variation in Dependent variable (Employee performance).
5.4.1. ANOVA ANALYSIS
TABLE – 8
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 5.511 2 2.756 13.587 .000b
Residual 25.960 128 .203
Total 31.472 130
a. Dependent Variable: EP_Index
b. Predictors: (Constant), CT_Index, CS_Index
According to regression theory the residual sum of square is always less than regression sum of
square but in our case the residual sum of square is greater than regression which means the data
is scattered and we cannot draw the regression line easily. According to table 8 the regression
sum of square is less than residual sum of square (5.511 < 25.960) which means data is scattered
and we cannot draw regression line easily.
As sig value is also less than 0.05 which means null hypothesis is rejected and independent
variables affect dependent variable. According to table – 8 the sig value is 0.000 which means
claim got accepted that independent variables change in organizational structure and change in
technology affects the dependent variable i.e. employee performance.
5.4.2. Coefficients
TABLE – 9
42
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. Collinearity Statistics
B Std. Error Beta Tolerance VIF
1
(Constant) 1.449 .438 3.311 .001
CS_Index .364 .094 .330 3.879 .000 .893 1.120
CT_Index .211 .104 .172 2.022 .045 .893 1.120
a. Dependent Variable: EP_Index
In table – 9 we have two streams unstandardized beta coefficient and standardized beta
coefficient. If variables are measured on different scale then we will use standardized beta but if
variables are measured on same scale then we will use unstandardized beta. In our case I used
unstandardized beta because it’s measured on the same scale.
Beta value determines the rate of change. If beta value is positive then there will be positive
relationship between independent and dependent variables. If beta value is negative then there
will be negative relation between independent and dependent variables. In this case all beta
variables are positive it means there is positive relation between our dependent variable and
independent variables.
Therefore we will conclude that there is positive relationship between change in organizational
structure and employee performance which means organizational structure change positively
impact employee performance. And 36% change in employee performance is due change in
organizational structure.
There is positive relationship between change in technology and employee performance which
means technology change positively impact employee performance and 21% change in strategic
initiative success is due to change in technology.
T value shows the relative importance of the independent variables means which independent
variable is more important for dependent variable. It will be checked by higher value. In this case
the T value of change in organizational structure is higher than change in technology that is
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3.879 > 2.022 that means change in organizational structure is more important for employee
performance.
As sig value for the change in organizational structure is 0.000 that is less than 0.05 (0.000 <
0.05) which means there is positive relationship between organizational structure change and
employee performance and organizational structure positively impact employee performance.
As sig value for change in technology is 0.045 which is less than 0.05 (0.045 < 0.05) that means
there is positive relationship between change in technology and employee performance and
technology change positively impact employee performance.
Table – 9 also shows Multicollinearity statistics. If the tolerance value is less than 0.20 or 0.10 it
will indicate Multicollinearity problem (Brien & Robert, 2007). In above table the tolerance
value of both independent variables are 0.893 that means there is no problem of Multicollinearity
and it shows that tolerance level is good and moderate. The VIF value 5 or 10 above indicates
that Multicollinearity problem (Brien & Robert, 2007). In above table VIF values of both
independent variables are less than 5 or 10 that is 1.120 which shows that VIF level is good and
there is no Multicollinearity problem.
5.4.3. Collinearity Diagnostics
TABLE – 10
Collinearity Diagnosticsa
Model Dimension Eigenvalue Condition Index Variance Proportions
(Constant) CS_Index CT_Index
1
1 2.986 1.000 .00 .00 .00
2 .009 18.581 .05 .91 .35
3 .005 23.926 .95 .09 .65
a. Dependent Variable: EP_Index
44
If Eigen value is near to zero it means there is less variation. In above table the value of both
independent variables is close to zero which means there is little variance in these variables that
is good.
5.4.4. Moderation Test
As we are taking Transformational Leadership as a moderating variable whether it is playing
moderating role between change in organizational structure and employee performance or not
and act as a moderator between change in technology and employee performance. In order to
check this we did analysis, we have checked the moderation through Andrew process.
TABLE – 11
Model = 1 (ANDREW)
Y = EP_Index
X = CS_Index
M = TL_Index
Sample size
131
Outcome: EP_Index
Model Summary
R R-sq MSE F df1 df2 p
.5908 .3491 .1613 9.3995 3.0000 127.0000 .0000
Model
coeff se t p LLCI ULCI
constant 3.7105 2.4415 1.5197 .1311 -1.1208 8.5418
TL_Index -.2071 .6363 -.3254 .7454 -1.4663 1.0521
CS_Index -.5847 .6657 -.8783 .3814 -1.9021 .7326
int_1 .2038 .1731 1.1773 .2413 -.1388 .5464
Change in
Organizational
Structure
Transformational
leadership
Employee
Performance
45
Interactions:
int_1 CS_Index X TL_Index
Table 11 shows that in moderated model, Transformational Leadership did not moderate the
relation of Employee Performance and Change in Organizational Structure , b=.2038, t(127)=
0.173, p>.05 so the results reject the hypothesis that Transformational Leadership (TM)
moderating the relationship of EP & CS.
TABLE – 12
Model = 1
Y = EP_Index
X = CT_Index
M = TL_Index
Sample size
131
Outcome: EP_Index
Model Summary
R R-sq MSE F df1 df2 p
.5631 .3171 .1692 6.9595 3.0000 127.0000 .0002
Model
coeff se t p LLCI ULCI
constant 2.0297 4.3532 .4663 .6418 -6.5844 10.6439
TL_Index .3010 1.1514 .2614 .7942 -1.9775 2.5794
Change in
Technology Employee
Performance
Transformational
leadership
46
CT_Index -.0963 1.1344 -.0849 .9325 -2.3410 2.1484
int_1 .0579 .2992 .1934 .8470 -.5343 .6500
Interactions:
int_1 CT_Index X TL_Index
Table 12 shows that in moderated model, Transformational Leadership did not moderate the
relation of Employee Performance and Change in Technology, b=.0579, t(127)= 0.1934, p>.05
so the results reject the hypothesis that Transformational Leadership (TM) moderating the
relationship of EP & CT.
5.5. Discussion
The research study found that the change in organizational structure and change in technology
has a positive impact on employee performance and transformational leadership does not
moderating role between them.
They showed that:
Our first hypothesis was change in organizational structure affects employee performance.
Through our results we conclude that change in organizational structure positively affects the
employee performance. Our results support theis hypothesis this is also supported via research
done by (Omar Al-Jaradat, Mohammed Nagresh, Abdullah Al-Shegran & Nura Jadellah, 2013).
Our second hypothesis transformational leadership plays moderating role between change in
organizational structure and employee performance. In order to check moderation we have run
Andrew process but results shows our hypothesis that is transformational leadership plays
moderating role between change in organizational structure and employee performance got
rejected. This is new thing in literature and has not done before.
47
Our third hypothesis was change in technology affects employee performance. Through our
results we conclude that change in technology positively affects the employee performance. Our
results support the hypothesis this is also supported via research done by (Omar Al-Jaradat,
Mohammed Nagresh, Abdullah Al-Shegran & Nura Jadellah, 2013).
Our fourth hypothesis transformational leadership plays moderating role between change in
technology and employee performance. In order to check moderation we have run Andrew
process but results shows our hypothesis that is transformational leadership plays moderating
role between change in technology and employee performance got rejected. This is new thing in
literature and has not done before.
The results of statistical analysis shows that two hypothesis got accepted that change in
organizational structure and change in technology has positive impact on employee performance
but the other two hypothesis one is transformational leadership plays moderating role between
employee performance and change in organizational structure and the other that transformational
leadership plays moderating role between employee performance and change in technology got
rejected.
5.6. Conclusion
As per our research result suggests that change in technology and change in organization
structure positively impacts the employee performance. However, transformational leadership
doesn’t play any moderating role among the dependent and both the independents variables. As
per our study of different research and work, it should have moderating role. Established result
of dependent and independent variables, it’s very obvious now that changes in technology and
change in organizational structure is welcoming by employees. Eventually it also positively
impacts their performance. Ideally transformational leadership should have supported them and
encouraged them to adapt the change. But our research is focused on sample (few organizations)
and result reflects transformational leadership is not playing their pivotal role to help employees.
If they would have played their role more effectively then there will be always more powerful
48
results. As stated earlier around 70% changes doesn’t get successfully implemented. In our case
(sampled data) the transformational leadership can be one of the obvious reasons behind failure.
5.7. Managerial Implication
As far as changes are concerned then there is nothing which can stop them, with this pace in
technology humans are also learning how to manage and act. In this scenario the organizations
which are not adapting the changes in technology and organization structure, they will be out of
race. This is now very obvious to people are running organizations and that is one of the reason
changes are being embraced. It’s not just enough to make decision for adaption of changes but
the most important is to manage the change through the lifecycle and keeping workforce
informed and involved. If employees are not informed and involved then there will be resistance
for adaption. Employees should be encouraged and trained to how effectively they can get
adaptive to the change. The most important driver for this bridging is transformation leadership;
they got to play the pivotal role for successful implementation of changes. As our research
results, transformational leadership is not able to make that bridge b/w change and employees.
Transformation leadership has to come in active mode to achieve better and effective results.
5.8. Limitation of study
This research was conducted with the sample selected from organization i.e. Mobilink, Telenor,
Ufone, Huawei, MTBC. Due to time constraint the data collected from the respondents of
Rawalpindi and Islamabad only. Sixteen weeks for writing to complete the results affects the
quality of research. Data collection was also a serious issue because majority of respondent
occupied by their project work and responses from experience and executive seemed to be low
because of their non availability and enough spare time. It was also difficult and time challenging
to collect data from the respondent physically so data was also collected via online that was slow
and time consuming.
49
5.9 Future direction/Recommendation
During the course of study, it has been observed a lot has been worked, when it comes to change
and change management. It also suggests us; still the success rate of changes across the world is
not getting significantly improved during the years. In my opinion factors of change failure
should be studied, because without successfully adaption of new technological changes and
adaption of modern way of managing and working, we can’t compete with world leading
companies. As our research result reflects that the transformational leadership is not bridging
changes and employees, so someone needs to works on factors why transformation leadership
(Pakistan) is not able to bridge changes and employees. This bridge is very important because as
per our studies (during the course of this research) we found every other research and work is
endorsing this bridge.
50
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