Strategy of the Central Bank of Nigeria-Free-Samples for Students

Question: Discuss about the Change Management Strategy of the Central Bank of Nigeria. Answer: Introduction: The report gives a brief overview of the development of change management strategy of an established organization. Here in the report the organization chosen is the Central Bank of Nigeria. Thus, the report has a brief description about the bank, its stakeholders and the development of the change management strategy. The report then draws a picture on the first six steps of Kotters model and to what extent the chosen organization aligns its strategies of change based on the proposed model. There is discussion of the external and internal factors of the Central Bank of Nigeria that is responsible for creation of urgency. The report also focuses on the identification of the change events for the bank and analyzing of the attributes and characteristics for coalition building. There is also focus on identification of the goals and broader strategies of the bank in the light of forming a vision. Further, there is a detailed analysis of evolving, improving and monitoring of the strategies for change management undertaken in the context of the bank. The report also gives a brief overview of the relevant tools and techniques used by the Central Bank of Nigeria for communicating the vision. The report also discusses about the removal of the obstacles by the Central Bank of Nigeria through the identification of resistance from potential risk and various stakeholders that is associated with the process of change. Finally, the report speaks about creation of short-term goals of the Central Bank for the realization of the strategic change in management and ends in with a proper conclusion Development of Change Management Strategy (in consideration of Stakeholders) The company chosen here is the Central Bank of Nigeria. The establishment of the Central Bank of Nigeria dates back to 1958 under the CBN act but the commencement of its operation began on first of July1959. The primary regulatory objectives of the bank as per the act was the maintenance of countrys external reserve, promotion of stable financial ambience through proper monetary supply and act as a financial aid as well as advisor to federal government. The end of the imperial rule saw the government in a proactive state especially for economic development. Thus, such desire of the government remained fulfilled by the bank that provided aid to any shortfall in the allocations of credit for the real estate sector (Ovat 2012). Soon the bank also got involved in lending financial help to the customers through various commercial banks. However, government remained actively involved in building the equity centers and nations money through the help of Central Bank of Nigeria. The governmen t also ensured the formation of the securities regulatory board and introduction of instruments related to treasury of the capital markets. The stakeholders of the Central Bank of Nigeria includes other commercial banks, insurance firms, various regulators, development experts and partners, government and public sector institutions, telecommunications/technology firms and other financial institutions(Madawaki, A., 2012). The present scenario is becoming increasingly challenging and complex for the Central Bank of Nigeria (Adeniji, Osibanjo and Abiodun 2013). The bank has not only become targets of cyber attacks and but also suffers regulation on staff planning based on increased budget constraints and demographics. In addition to this, there has also been a change in the mandates of the Central Bank. However, studies have shown that integration of risk management at the early stage of annual plan and strategic plan development can be beneficial. The functions of the risk management that aligns with the day-to -day business procedures can lead to important insights for the people responsible for the strategic planning process (Achumba, Ighomereho, and Akpor-Robaro 2013). However, the forward-looking nature of the strategic planning process is necessary to identify areas of potential risk in future. Thus, it is very important for the integration of risk management with strategic performance and planning management for ensuring better management of the Central Banks reputation and business risk. Creation of Sense of Urgency (Evaluation of the Internal and External Factors of The Organization) Sense of Urgency? According to the model proposed by Kotter, the first step involves creation of urgency. Thus, for a change to occur it requires involvement of the whole organization. This leads to the creation of initial spark for motivating and driving things into action (Appelbaum et. al 2012). Creation of urgency does not only involve showing the people the poor statistics of sales or speaking about enhanced competition but it also leads to convincing and ensure honest conversation with the competitors about the whereabouts of the marketplace. Thus, if there are quite a number of people who considers the change then based on it the urgency can be built and thereby necessary actions taken. Therefore as per Kotter there are few guidelines that need to be followed for the creation of urgency. These are as follows: (1) Identifying the potential threats and developing scenarios that portray the happenings of the future. (2) Examining opportunities that could have been or should have been exploited (3) There should be discussions that should include convincing and dynamic reasons to motivate people to think or talk (4) Requesting the support of the outside stakeholders, customers and industry people to validate the argument related to change. External Factors Applying Kotters theory, the sense of urgency in the Central Bank of Nigeria identified through the the external factors. Here, the external factors refers to the impact of environment on business processes, strategies, visions and missions of the bank (Irefin, Abdul-Azeez and Tijani 2012). However, the business of an organization operates within a bigger framework of external environment that not only enables shaping opportunities but poses potential threat to the organization. However, for the banking sector the external environment comprises of a cluster of complicated, fast changing and noteworthy interacting organizations responsible for affecting the companys ability to deal with the customers. Thus, business must be aware of the environmental conditions that interfere with decisions of marketing strategy. Thus, the environmental conditions must include operational challenges, globalization, economic trend, previous management failures and market pressure and government legisla tion. Internal Factors According to Kotters theory, the sense of urgency in the Central Bank of Nigeria identified through the evaluation of the internal factors. The internal factors include that have a significant impact on the profitability of the Central Bank of Nigeria are asset quality ratio, liquidity ratio, management efficiency ratio and capital ratio. These factors influenced by the management decisions of the bank (Onuonga, S.M., 2014). The asset quality ratio represents the evaluation or review of accessing the credit risk in accordance with the asset chosen. On the other hand, the liquidity ratio refers to the measurement of ability of the company for paying its debt obligations and its safety margins through metrics calculation that includes quick ratio, current ratio and operating cash flow ratio. The efficiency ratio is the measurement of the banks capability in using its liabilities and assets internally. Capital ratio measures the level to which Central Bank of Nigeria finances operation through the issue of shares and profit retention calculated as a percentage of its assets. Coalition Building (Identifying Change Events and Analyzing their Characteristic and Attributes) According to the Kotters, formation of an effective coalition involves step 2 of the change model. Therefore, for a strategic change movement it is very necessary to make people believe in the importance of change (Mou 2013). This first step towards the process is to identify the stakeholders of the company. Thus, for Central Bank of Nigeria it is necessary to identify the government and public sector institutions, telecommunications/technology firms, regulators, other banks and insurance firms who pose as stakeholders. Then the next step involved is to identify the emotional commitment from them. There should also be efforts on effective team building with identification of the weak areas of the team. The team involved should also be a mix of good people from various departments of the bank. Forming a Vision (Developing Goals and Broad Strategy) In step 4, Kotter focuses on the creation of a vision for undertaking a change. This can be explained by saying that when an organization thinks of a change in vision there are ample ideas and solutions that pours in. Therefore, the ideas undertaken for initiating a change in vision in an organizational structure should be such that they are easily understood by the employees. Therefore, in order to do it is very important to determine the values that are essential for the change (Okafor 2012). Then there should be development of short summary that will capture the ideas that foresee the future of the company. Further, there must be a strategy to execute the vision. Additionally, there must also be assurance that the coalition building is able to describe the vision in no less than five minutes. Moreover, a vision speech should describe the present scenario of the company. In this regard, the Central Bank of Nigeria should be inclined and have greater involvement towards the making of economic policy and implementation that involves various events from the last financial crisis. This was done in addition to the traditional functions that involved determining the money supply and interest rates for achieving price stability, implementation and formulation of monetary policy, supervising and regulating the financial and banking systems, financial market stability and management of foreign reserves (Amah and Ahiauzu 2014). Further, the economic crisis has forced the central bank to implement macroeconomic management policies in various nations. Therefore, in Nigeria it became crucial to include a governor in the economic management team of Central Bank so that policies are aligned with the development taking place globally. Thus, the role that Central Bank of Nigeria plays in a developing economy like Nigeria is more demanding than the crisis management. The Nigerian economy has a faltering process of development and lack of professionalism in the formulation and management of economic policy that justifies the fact that Central Bank of Nigeria should be involved more actively in matters related to macroeconomic policy (Odior and Banuso 2012). Monitoring, improving and Evolving Monitoring: Thus, in order to deliver change it is very important to measure and monitor outcome. However, reporting, and clarity of change is also necessary. Compared to commercial sectors, Central Bank has less clarity in the metrics related to market share and profit (Agbada and Osuji 2013). However, a clear discussion on the strategic journey of the Central Bank of Nigeria with reference to labor division between the department heads and the board members responsible for setting policies can explain the extent to which Central Bank of Nigeria show the effectiveness of change and the ways they ensure for valuing their money. Improving: For improvement, there should be a thorough analysis of project management long with the value chain. Therefore, one can see that Central Bank of Nigeria is responsible for managing multiple activities that are in a way resulting in the performance and improvement of various processes of the bank (Von 2012). Thus, the details of the conduct of each department along with the processes and the portfolio of employees responsible are recognized. The work of the value chain however plays a pivotal role in the management of the organization through the linkage of tactic and strategic planning, development and training, risk management, communication, documentation and cost (Peppard and Ward 2016). Evolving: The present scenario puts the bank in a position where they consider the strategic function to be a part of the management structure of Central Bank. However, in this context it be can be said that the leadership, resourcing, profile and buy-in function is necessary for further evolution of the strategic functions within the bank (Adeniji, Osibanjo and Abiodun 2013). Now it is matter of time to wait and see as to how the evolution of the strategic function can further uplift the role of the central bank to deliver sensible practices. Communicating the Vision (Relevant Tools and Techniques to Implement the Changes and Creating an Implementation Plan) According to Kotters model of change step 4 involves the communication of the vision. The vision must strongly be communicates so that it becomes a part of everything that is done within the company (Gorran 2013). In addition to special meetings called for communicating the vision there should be situation when the vision spoken about often. Further, the anxieties and concern of people addressed honestly and openly. Thus, the vision must reflect in all aspects of the operation that ranges from reviews of performance to training. Thus, if the scenario of the Central Bank understood in this context it is important to identify the tools and techniques. Therefore, the tools and techniques for implementation of changes are as follows: Making of the Strategic Plan The strategic planning considered a very effective framework when the Central Bank of Nigeria is undergoing changes that are not only institutional but operational. Therefore, strategic planning enables the bank to deal respond to opportunities, challenges and emerging trends (Quirke 2012). The bank must devote time to ensure that the set objectives are practical enough and are in alignment with the departmental strategy of the Central Bank. Effective Implementation across Institution There is criticality in deriving a strategic vision based on institutional objective; the impact of the change depends on its implementation compared to the formulation of the strategies. In order to do this, a requirement of departmental goal is necessary that must be aligning with the strategic objectives. Implementation refers to the measurement and evaluation of the strategies along with them being operational (Swayne, Duncan and Ginter 2012) . Here, focus is on measuring matrixes, communication, organizational values, culture, and the dynamics of the team. Role of Human Resource (HR) in the Change However, for communicating the vision the HR plays a vital role. Thus, in Central Bank of Nigeria the function of HR should be to provide aid in the process of planning thus ensuring that people not only have experience but they also have the right amount of knowledge and skills as per the strategic plan of the organization(Bratton and Gold 2012). HR strategies should therefore be in accordance with the overall corporate strategy. Generation of Strategic Communication The successful implementation of the strategic change is only possible when the entire organization is well informed. The message must therefore be tailored and not only well constructed for delivery. Thus, the task for of the planners does not end with the implementation of the change but also remains in its proper implementation. This is important because any kind of uncertainty among the staffs may create a hindrance in the implementation of the plan (Zafar and Afzal 2014). Therefore, it is of utmost importance to the Central Bank of Nigeria to undertake communication strategies as a part of their management and planning process. Ensuring Engagement and Leadership The Strategic change management is not just a mechanical process but is also an emotional process. Thus, the change can be at times be stressful for the staffs of the Central Bank of Nigeria if the vision remains unclear to them (Alhazemi, Rees and Hossain 2013). Therefore, the necessary step for the leaders of the team is to boost the enthusiasm and morale of the banking staffs through proper communicative means. Thus, for this purpose one can use various soft skills for enhancing better communication. Removing Obstacles (Identifying Possible Resistance from Various Stakeholders and Potential Risks Associated with Change Process as well as Possible Strategies to Manage Resistance The fifth step of the Kotters model for change focus on removal of the obstacle. This helps in empowering the people of the organization and in the execution of the vision. Thus, the removal of the obstacles refers to identification of the leaders who can understand the strategies for change (Pollack and Pollack 2015). Moreover, the model also stresses on identifying the people who will resist such change and thereby take immediate action for removal of the barriers. Thus, Central Bank of Nigeria should ensure undertaking the following measures for identifying the possible resistance and thereby overcoming it. Importance to Gut Feeling: There are cases that signal about the mistakes of an organization in the portrayal of the strategic change management to the people. Thus, choice of the right people for carrying the business forward is important (Burke 2017). The Central Bank of Nigeria must therefore make a choice involving the right amount of people who will be able to carry forward the strategic change movement. The bank should discard less competent staff from the management. Frugality in Company Value: There should be frugality in matters that involve company value. The Central Bank of Nigeria must convey a message to the staffs and employees to be frugal in matters that involves the company money. Thus, being frugal not only saves cost but also helps the company to move forward with the strategic change management. Abandon What Does Not Work To overcome the obstacles it is very necessary to evaluate the strategies that do not work before they become the reason for a major obstacle (Repoux 2014). Thus, it is important for the Central Bank of Nigeria to identify strategies that do not work. That will enable the bank to concentrate better on other strategies that work towards the change movement. Old Strategies to be Replaced There is an inbound tradition amongst organizations to stick to out of date modes. In this context, it is very important for the Central Bank of Nigeria to identify outdated modes of strategies that hampers business in the process. Thus, for implementing the strategic change management it is important for the organization to identify old strategies and replace them with new ones (Appelbaum et.al 2012). Identifying the Major Obstacle: The organization must identify and train the right people responsible for the growth of the business (Eayrs, Cadrin and Glass 2014). Thus, it is primary for the organization to identify the major obstacles that might pose hindrance to the strategic change management. In this context, this can however be said that the Central Bank of Nigeria should have clarity about the major obstacle that poses threat to the vision for change. Sticking to Vision: The level of the obstacle should be not so huge that it affects the vision of the company. Thus, no matter what the scenario is the Central Bank of Nigeria must adhere to the vision and ensure proper management of function (Calegari, Sibley and Turner 2015). Create Short Term Wins (Identifying Short Term Smart Goals) The Step 6 of Kotter model focuses on the creation of short-term goals. The goals are responsible for the improvement of the organization, on deciding the success of the organization, ensure overall visibility in the organization, and have a connection with strategic change movement (Fullan 2014). These goals therefore, lead to elimination of any kind of discouragement that the company faces and leads to any major change. In this regard, the Central Bank of Nigeria needs to undertake short-term goals that will lead the bank in the process of strategic change management. Specific Innovative Goals The organization should undertake setting specific goals that ensures reflection of the strategic change that management undertakes. However, while setting goals the company must consider them innovative (Kotter 2012). While setting goals it is of utmost importance for the company to make sure that they are team specific and thereby helps in building unity and benchmarks necessary for monitoring success. Ensure Sustainable Growth The choice of goals should be in a manner that ensures the company success through sustainable growth. The chosen goals should not only be aggressive but at the same time be attainable. The bank must also ensure that the employees have proper set of skill set to contribute to the realization of the goals. The usual trend seen is that when goals are in alignment with annual and quarterly reviews then there is persistence of sustainability in the execution of strategic change (Jeston and Nelis 2014). Setting Realistic Goals The initiation of team success with the desired set of goals will not only drive the need for more aggressive goals but will pump up the future strategies for change. The realistic nature of the goals not only allows the Central Bank of America to undertake measures for improving customer satisfaction but initiate necessary changes in the management (Parker et.al 2013). Thus, realistic goals are acting as the force that is responsible for driving the course of the business planning. Timeline Specific Goals The augmentation of the goal setting strategies is through the maintenance of manageable timelines and effective communication. Thus, through commitment, structure setting and execution of specific goals the banks culture will evolve in a manner that will not only sustain but support improvements (Lau 2015). However, the fixture of timeline towards a goal the bank is able to move forward with the strategies of change. Conclusion The report ends with the discussion of the sixth step of Kotters model of change that is creation of short-term goals. There is also a discussion on the various goals undertaken by chosen company, Central Bank of Nigeria. The report does an in detail analysis of the Kotters model of change and how it enables the company in undertaking strategic change management. Here in the report there is a linkage drawn between the Kotters first step of change that involves creation of urgency with how the Central Bank of Nigeria is playing a role in the adoption of urgency through internal and external factors. However, based on Kotters the second step on coalition building the report identifies the change agents, thereby analyses their characteristics, and attributes in relation to the Central Bank of Nigeria. The report further discusses on the third step of the Kotters model, thereby focusing on vision for change for the Central Bank of Nigeria in context of development of goals and broader st rategy. Further, there is discussion on the communication of the vision of selection of techniques and tools for implementation of the strategies for change management. Further briefing about the removal of the obstacles from the Central Bank of Nigeria done that involves identifying the resistance from stakeholders for the implementation of strategic change. In the report, one can also find the development of change management strategy from the point of view of the stakeholders. There is also brief overview of the Central Bank of Nigeria, its stakeholders and strategies undertaken for change management. Thus, the Kotters model of change plays a vital role in the strategic change management of an established company like Central Bank of Nigeria. Thus, for explaining the strategies of change for the bank the Kotters model acts as a framework References: Achumba, I.C., Ighomereho, O.S. and Akpor-Robaro, M.O.M., 2013. Security challenges in Nigeria and the implications for business activities and sustainable development. Journal of Economics and Sustainable Development, 4(2). Adeniji, A.A., Osibanjo, A.O. and Abiodun, A.J., 2013. Organisational Change and Human Resource Management Interventions: an Investigation of the Nigerian Banking Industry. Serbian Journal of Management, 8(2), pp.2-16. Adeniji, A.A., Osibanjo, A.O. and Abiodun, A.J., 2013. Organisational Change and Human Resource Management Interventions: an Investigation of the Nigerian Banking Industry. Serbian Journal of Management, 8(2), pp.2-16. Agbada, A.O. and Osuji, C.C., 2013. The efficacy of liquidity management and banking performance in Nigeria. International review of management and business research, 2(1), pp.223-233. Alhazemi, A.A., Rees, C. and Hossain, F., 2013. Implementation of strategic organizational change: The case of King Abdul Aziz University in Saudi Arabia. International Journal of Public Administration, 36(13), pp.972-981. Amah, E. and Ahiauzu, A., 2014. Shared values and organizational effectiveness: a study of the Nigerian banking industry. Journal of Management Development, 33(7), pp.694-708. Appelbaum, S.H., Habashy, S., Malo, J.L. and Shafiq, H., 2012. Back to the future: revisiting Kotter's 1996 change model. Journal of Management Development, 31(8), pp.764-782. Appelbaum, S.H., Habashy, S., Malo, J.L. and Shafiq, H., 2012. Back to the future: revisiting Kotter's 1996 change model. Journal of Management Development, 31(8), pp.764-782. Burke, W.W., 2017. Organization change: Theory and practice. Sage Publications. Calegari, M.F., Sibley, R.E. and Turner, M.E., 2015. A Roadmap for Using Kotter's Organizational Change Model to Build Faculty Engagement in Accreditation. Academy of Educational Leadership Journal, 19(3), p.31. Eayrs, S., Cadrin, S.X. and Glass, C.W., 2014. Managing change in fisheries: a missing key to fishery-dependent data collection?. ICES Journal of Marine Science, 72(4), pp.1152-1158. Fullan, M., 2014. Leading in a culture of change personal action guide and workbook. John Wiley Sons. Gorran Farkas, M., 2013. Building and sustaining a culture of assessment: best practices for change leadership. Reference services review, 41(1), pp.13-31. Irefin, I.A., Abdul-Azeez, I.A. and Tijani, A.A., 2012. An investigative study of the factors affecting the adoption of information and communication technology in small and medium scale enterprises in Nigeria. Australian Journal of Business and Management Research, 2(2), p.1. Jeston, J. and Nelis, J., 2014. Business process management. Routledge. Kotter, J., 2012. How the most innovative companies capitalize on today's rapid-fire strategic challenges-and still make their numbers. Harvard business review, 90(11), pp.43-58. Lau, C.Y., 2015. Quality improvement tools and processes. Neurosurgery Clinics of North America, 26(2), pp.177-187. Madawaki, A., 2012. Adoption of international financial reporting standards in developing countries: The case of Nigeria. International Journal of Business and management, 7(3), p.152. Mou, I.K., 2013. Identifying and minimizing risks in the change management process: The case of Nigerian banking industry. Journal of Business Economics and Management, 1(6), pp.148-162. Odior, E.S. and Banuso, F.B., 2012. Cashless banking in Nigeria: Challenges, benefits and policy implications. European Scientific Journal, ESJ, 8(12). Okafor, C.E., 2012. Change and consolidation in the Nigerian banking industry: an exploration of two key Central Bank of Nigeria objectives. Onuonga, S.M., 2014. The analysis of profitability of kenyas top six commercial banks: Internal factor analysis. American International Journal of Social Science, 3(5), pp.94-103. Ovat, O., 2012. The Central Bank of Nigerias cashless policy in Nigeria: Benefits and challenges. Journal of Economics and Sustainable Development, 3(14). Parker, D., Verlinden, A., Nussey, R., Ford, M. and Pathak, R.D., 2013. Critical evaluation of project-based performance management: change intervention integration. International Journal of Productivity and Performance Management, 62(4), pp.407-419. Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a digital strategy. John Wiley Sons. Pollack, J. and Pollack, R., 2015. Using Kotters eight stage process to manage an organisational change program: Presentation and practice. Systemic Practice and Action Research, 28(1), pp.51-66. Quirke, M.B., 2012. Making the connections: using internal communication to turn strategy into action. Gower Publishing, Ltd.. Repoux, C., 2014. Leading change management projects in international cross-cultural settings (Doctoral dissertation, Massachusetts Institute of Technology). Swayne, L.E., Duncan, W.J. and Ginter, P.M., 2012. Strategic management of health care organizations. John Wiley Sons. Von Krogh, G., 2012. How does social software change knowledge management? Toward a strategic research agenda. The Journal of Strategic Information Systems, 21(2), pp.154-164. Zafar, F., Butt, A. and Afzal, B., 2014. Strategic Management: Managing Change by Employee Involvement. International Journal of Sciences: Basic and Applied Research, 13(1), pp.205-217.