National College of Business Administration & Economics

(NCBAE)

Change Management Final Project

SUBMITTED TO: • SIR BASIT AFZAL

SUBMITTED BY: • MUHAMMAD USMAN (ID: 2183105)

• ABBAS RAFI
• TABINDA YOUSAF
• TAIFOOR KHAN

BILAWAL FEROZE
 Project on:
Mobilink & Warid Merger
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 TABLE OF CONTENTS

1. Introduction

2. Mobilink / Warid Overview

3. Change in Mobilink (Mobilink - Warid Merger)

4. Impact on Employees

5. What & How It Happened?

6. Resistance by the employees:

7. Employees Trust in Management

8. Management Communication Strategy / Exchanging Information

9. Employee Involvement in Change Process

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INTRODUCTION:
The widespread acceptance of the notion of global economy has transformed the way
the organizations are expected to be managed and sustain their competitiveness. This changing
scenario is compelling the business organizations to find new horizons through collaborations,
mergers and acquisitions. These types of organizational restructuring gaining popularity due to
its potential of enhanced expertise, availability of adequate funds, larger market share etc.
Although, different modes of restructuring are considered as inevitable elements of
contemporary organizational development, however, the issue of organizational change and
how employees perceive and react to this change has gained considerable attention.

The Greek philosopher, Heraclitus has well said that change is the only constant thing in the life
and this is evident as the change is being implemented in various organizations due to the
prompt development all over the world. Change can either result from internal or external
factors and could result in a complicated response from the employees, which can either be a
support or resistance to change (Karamjeet et.al., 2012). Primarily, resistance to change is

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conceptualized as an emotional response by the employees who are actually or thought to be
affected by that change. Employee resistance to change has appeared as one of the common
dilemma faced by the executives and managers in organizations.

In order to cope with dynamic business environment, Pakistani organizations are also
undertaking multiple initiatives and some of them include mergers and acquisitions. Although, a
number of initiatives have been undertaken in various sectors, however, this research has its
setting in Telecommunication sector. Notably, the telecommunication sector of Pakistan is
growing at faster speed and referred as core component of service sector within national
economy (Economic Survey of Pakistan, 2015-16). The telecommunication sector is expanding
its service offerings and revisiting their organizational structure through adopting new methods
and new strategies. This report is aimed at analyzing organizational change phenomenon from
employee’s perspective and primarily focusing on examining the extent to which employee’s
academic qualification might determine employee’s resistance/acceptance to change.

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 Mobilink Overview

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 Warid Overview

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 SITUATIONAL ANALYSIS

Change in Mobilink (Mobilink - Warid Merger):

Mobilink, a number one brand in telecom sector acquired Warid in recent times. This merger
was carried out in 3 phases, following is the brief view of this merger:

Phase 1

• Mobilink acquired 100% shares of Warid.

• Dhabi Group got 15% shares of Mobilink.
• There was no cash transaction involved, just the shares were swapped
• Till this phase was completed, both companies continued to work separately
as they were.
• During phase 1, planning and strategy for the merged company were devised.
All parties were involved to lay down a plan on how to merge the companies.

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 Phase 2

• In phase two, after the completion of phase 1, Warid and Mobilink were
merged into one company.
• This took another six months to close and required regulatory approvals.
• After this, there was one company as an outcome.
• At this point, shifting of offices, consolidation of franchisees, retailers, and
various organizational functions and employees were occurred.
• This single merged company was to carry the name of Mobilink or adopt any
new brand name.
• This single company was to have single support operations, single sales and
distribution network, one single PR agency and so on.

Phase 3

• After a lock-in period of 4 years, Dhabi Group could sell its 15% stakes at fair
market value.
• VimpelCom had first rights to these 15% shares, however, they could
offer Dhabi Group to sell these shares to anyone else.

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 Governance:

• The Board of the merged company was composed of 7 directors of

which 6 were nominated by VimpelCom; while Dhabi Group had a
chance to appoint 1 director.
• Resolutions of the Board, in general, was to be decided by majority
vote, except for certain limited reserved matters.
• Jeffrey Hedberg was to be the CEO of merged company.
• Andrew Kemp was to be the CFO of merged company.

❖ Impact on Employees:

It was clear that certain, but unknown, number of employees from both companies were to be
removed from the merged company. Management said that employees, franchises, retailers
and all other resources will be retained on need, performance, and skill-set basis.

❖ What & How It Happened?

Any change in the structure of an organization often proves to be a bad omen for related
entities, but corporate philosophies usually don’t have clauses that compensate for the affected
of any significant change that may impact them in the long run. Mobilink-Warid merger has
proved that any structural changes at top level impact the employees at a lower level and many
other workers and entities that are indirectly related.

Jazz has closed almost 300 Warid franchises as they were useless. Nearly 60 individuals were
affiliated with one franchise and as a result of shut-down thousands became unemployed.

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 ❖ Resistance by the employees:

The level of educational qualification demonstrates a vigorous part in developing employee’s

attitude towards organizational change. It can also influence employees learning and can play a
part towards the factors of resistance/acceptance to change.

Resistance faced by this merger was majorly because of the following matters:

• Employees Trust in Management.

• Management Communication Strategy/ Information Exchange.
• Involvement in Change Process.

❖ Employees Trust in Management:

Employees trust in management plays a vital role in the process of change. If the employees
cannot trust the management than organizational change process cannot be successfully
implemented. Mostly Mobilink employees who had lower level of educational qualification
(matriculation or intermediate) have shown resistance to change. And vice versa the employees
with higher level of education (bachelor‘s and master‘s degree) had an acceptance attitude
towards the organizational change.

❖ Management Communication Strategy / Exchanging Information:

Communication /information exchange among employees and management has a distinct

position in every workplace. In this scenario, lack of information exchange was one of the major
reasons why employees resisted to this change as they were informed late and had no other
option but to face this change. Majority of the employees with low level of educational
qualification eventually showed resistance towards organizational change. On the other hand,

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the employees with higher level of educational qualification have shown eagerness towards
acceptance to organizational change.

❖ Employee Involvement in Change Process:

Employee involvement has vigorous part in the process of organizational change. Employees
that are not being considered to be the part of change process can resist towards change.
Employees working in Warid were not involved in planning this merger which ultimately
resulted in resistance by most of the employees as they had this fear of losing their jobs by the
takeover of new management (which the actually did). The level of education has importance
pertinent to employees’ attitude towards change. The study findings identify that majority of
the employees with low level of educational qualification ultimately showed resistance towards
this organizational change.

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