Managing change for radical business process improvement: effects on Islamic banks performance

• Main Authors: Razalli, Mohd Rizal, Hasnan, Norlena
• Format: Article
• Language: English
• Published: 2017
• Subjects: HG Finance
• Online Access: http://repo.uum.edu.my/26383/1/IJBEA%202%206%202017%20327%20334.pdf; http://repo.uum.edu.my/26383/; http://doi.org/10.24088/IJBEA-2017-26001

Managing change is difficult as the change is constant. Organizational resources have to be wisely utilized in optimizing the outcome of a change management project. The rapid rate of change has imposed many companies to radically change to improve their current business processes. The banking industry is one of the main economic drivers of any nation, and banks have been experiencing drastic changes in their operations. This paper examines the effect of change management initiatives on the Islamic banks performance. The performance of Islamic banks differs than any conventional banks due to three main aspects, namely, (1) educating individual, (2) public interest, and (3) establishing justice. In this study, the organizational performance is measured by the cost spent by the banks to fulfill those three aspects. The causal relationship was analyzed using the Partial Least Square (PLS) structural equation modeling. Collectively, the results show the significant positive effect of change management on the performance of the Islamic banks. The findings of the study contribute to the knowledge of change management to both managers as well as researchers in relation to the banks performance.