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  • UNIVERSITI PUTRA MALAYSIA

    ORGANISATIONAL TRANSFORMATION OF BANK ISLAM MALAYSIA BERHAD

    ABDEL AZIZ ADAM ABDEL KARIM

    FPP 1998 8

  • ORGANISATIONAL TRANSFORMATION

    OF BANK ISLAM MALAYSIA BERHAD

    ABDEL AZIZ ADAM ABDEL KARIM

    MASTER OF SCIENCE (HRD)

    UNIVERSITI PUTRA MALAYSIA

    1998

  • The Research Project entitled "Organisational Transformation of Bank Islam Malaysia Berhad" was prepared by Abdel Aziz Adam Abdel Karim in partial for the degree of Master of Science (Human Resource Development) in the Department of Extension Education, Faculty of Educational Studies, Universiti Putra Malaysia.

    Hjh. Rusinah Joned, M. A.

    Department of Extension Education Faculty of Educational Studies University Putra Malaysia

    (Supervisor)

    I

    Hj. Turiman bin Suandi, Ph. D.

    Department of Extension Education Faculty of Educational Studies

    Universiti Putra Malaysia

    (Examiner)

  • ORGANISATIONAL TRANSFORMATION

    OF BANK ISLAM MALAYSIA BERHAD

    BY

    ABDEL AZIZ ADAM ABDEL KARIM

    A Project Submitted in Partial Fulfillment of the Requirement for the Degree of Master of Science (Human Resource Development) in the Department of Extension

    Education FacuIty of Educational Studies

    Universiti Putra Malaysia

    July 1998

  • Dedicated to my beloved father, mother, uncles, aunts, brothers and sisters who bring sunshine to me and brighten

    my days

  • ACKNOWLEGEMENTS

    In the name of Allah, Most Gracious, Most Merciful

    I would like to express my sincere thanks and appreciation to people and

    institutions that made my education possible This research has a special significance for

    me as an outcome of great effort, and indeed stems from the teaching and guidance I

    received from my teachers and lecturers throughout my study

    I ought to express my gratitude and appreciation to my supervisor Mrs Hjh

    Rusmah 10ned for the enormous efforts she made for me She continuously offered

    comment aimed at improving my research and consistently offered sage and valuable

    suggestIOns throughout the preparation of this project lowe her a great deal and she

    deserves a worthy of thanks for providing me WIth her time and ideas

    My thanks to the Head Department, Assoc Prof Dr Hjh Aminah Ahmad for

    her kindness and assistance whenever needed My gratitude to the lecturers from whom I

    benefit and increase knowledge, more particular Dato Dr Mohamed Nasir, Assoc

    Prof Dr Hjh Mazanah Mohamed, Dr Raja Ahmad, Dr legak Vii, Dr Shamsuddin

    Ahmad, Dr Bahaman Abu Samah, Dr lamilah Othman, En Omar Ismail From

    Department of Communication Assoc Prof Dr Mohamed Salleh, Dr Soadah Wok

    From Faculty of Economics and Management Prof Dr V Anantraman My gratitude to

    the HRD Examination Committee, in particular, Assoc Prof Dr Hjh Maimunah Ismail

    SpeCIal thanks to Dr legak Uli and Dr lamilah Othman for their guidance, comment

    and suggestions in the seminar and they always spend time to make everything possible

    111

  • when I need. My thanks to Assoc. Prof Dr. Hj. Turiman Suandi for his valuable

    comments which improve my project My gratitude to the family of Extension Education

    Department

    My sincere thanks to the Graduate School family for their cooperation and assistance

    I must express my warm thanks to Bank Islam Malaysia Berhad for allowing me

    to conduct my research. My debt is numerous and it is difficult to identify all the

    sources of assistance. Amongst those to whom I'm special grateful are: Mr. Firdaus who

    has spent a long time with me and provide aU the materials, Me Ismail, Mr. Sharuddin,

    Mrs. Hashila and Mrs. Khariah. My thanks to managers and staff from the selected 15

    branches for their cooperation and response.

    Many thanks to Mr. Hashim Mahjoub for taking his time to answer my questions

    and providing suggestions. I appreciate every effort he has made. Thanks for the

    kindness he has shown and wish him every happiness in return.

    My thanks to Mrs. Ainul Mustapha who has made this research possible by

    contacting the bank and arrange for my first visit. To Me Abdul Razak Hussein., I'm

    incapable of expressing my thanks for aU the helps, and hospitality that I received. He is

    somebody who made some pleasant and nice things to me. My thanks to his family and

    relative too.

    I have benefited from several useful discussions and cooperation. I would like to

    single out the following individuals: Mr. Kamal Shukri, Mr. Aminuddin Basir, Mrs.

    iv

  • Faridah Hanam, Mr. , Zeinudin S harif, Mr. Abu Bakar, Mrs. Sundari Rajan, Mrs. Wendy

    Chan, Mr. Raja Ruslan, and Miss On Lilly.

    I 'm the more grateful to Mr. Isamuddin Suleiman and Yousif Abbaker for their

    quick response, and helps with the computer facilities and spending their own time to

    make everything possible in a friendly manner. My gratitude to the Sudanese friends for

    their assistance and cooperation. Much I would like to mention each one in name: Mr.

    Abdul Fatah Adam, Mr Faiz Ahmad, Mr Tarig Mohamed, Mr. Ahmad Elyas, Mr.

    Mohamed Khalid, Mr. Mohamed Nour, and Mr. Adam Mohamed Ahamd. To my friend

    Khalid Yousif, lowe him special debt and appreciation to the things he has provided me

    with and helped to relieve me with additional burdens. He maintains a friendly

    relationship through all our study. I hope to be as successful . My gratitude to Mr.

    Ahamd Sirel Khatim and his wife Nawal to their hospitality. My thanks to my friends in

    Sudan.

    Finally, credit goes to my father Adam, mother Nor Elsham; Uncle Mohamed

    Salleh; Aunt Halima; brothers Abdallah, Mohamed, Ismail, Mahmoud; sisters Zahra,

    Hawa and Awatif God blesses them for their sacrifices, support and encouragement,

    v

  • TABLE OF CONTENTS

    ACKNOWLEDGEMETNS LIST OF TABLES LIST OF ABBREVIATIONS ABSTRACT ABSTRAK

    CHAPTER

    I

    n

    INTRODUCTION

    BIMB FacilIties and Products Human Resources Statement of the Problem Objective of the Study Slgmficance of the Study LImItatIOn of the Study DefimtIOn of Terms

    REVIEW OF LITERATURE

    IntroductIOn Orgamsation Development and Its Features Components of Organisations Organisations as System Monitoring the Business and Organisational Environment Major OD Interventions Orgamsational TransformatIOn External Elements MotIvate OrgamsatIOns to Change OrgamsatIOnal Internal Elements

    MISSIon and Strategy LeadershIp Culture Individual and OrgamsatIOnal Performance

    ReSIstance to Change Staff Resistance to Change Orgamsatlonal ReSIstance to Change Overcommg ReSistance to Change

    Summary

    VI

    PAGE

    1ll

    IX

    X

    Xl

    Xlll

    I

    6 8 9 1 0 1 0 1 1 1 1

    1 3

    1 3 1 3 1 8 20 22 24 25 27 29 30 3 1 32 33 34 34 36 3 7 3 7

  • III

    IV

    METHODOLOGY

    Introduction Location of the Study Informants of the Study Data Collection

    Interviews Questionnaire Documents

    Data AnalysIs

    RESULT AND DISCUSSION

    Introduction BIMB Corporate MissIOn and Objective OD Intervention in BIMB

    Research and Development Feedback

    Organisational Transformation of BIMB ( 1 983 - 1 997) Growth Indicators of BIM Capital Restructuring Corporate Structure Construction of Head Office Building Civil Servants Home Financing Islamic Insurance ServIce Capital Market (Securities) Services Social Obligation Achieving Tier-one Bank Status Management Upgrading Programme (MIS) Marketing InnovatIOn Other Changes

    External Elements Motivate BIMB to Change Provision of Liquidity to Bank Negara Globalisation and Liberalisation Market CompetitIOn Macroeconomic Trends and Crisis TechnologIcal InnovatIon

    ReSIstance to Change OrganisatIonal ReSIstance to Change Staff Resistance to Change

    Vll

    3 9

    3 9 3 9 3 9 40 40 4 1 4 1 42

    43

    43 43 45 46 47 49 50 5 1 5 3 54 54 54 5 5 5 5 56 57 57 58 58 59 59 59 60 60 6 1 62 62

  • v SUMMARY, CONCLUSION AND RECOMMENDATION

    Introduction Summary Conclusion Recommendation

    BIBLIOGRAHPY

    APPENDICES

    Appendix A Letter for Permission to Study

    Appendix B Interview GUide

    Appendix C Questionnaire for Staff

    Vlll

    7 1

    7 1 7 1 72 74

    75

    80

    8 1

    83

    86

  • fable

    4 1

    42

    43

    44

    45

    46

    47

    48

    LIST O.F TABLES

    1 he Bank GI owth indIcators ti'om 1992-97

    Recent Financial Development in BIMB

    Management plans in B1MB

    Management Problem Solving in B1MB

    Management Communication in BIMB

    . . . . ' " . . . . . . . . .

    ' " , . . . . . . . . . . . . . . " .

    . . . . . . . . . .

    Skills and Services in BIMB frt')m StatrViewpoint

    Staff Attitude towards Change

    Overall Conclusion of OT in BIMB

    Page

    50

    52

    63

    64

    65

    66

    68

    69

  • ATM Bhd BIMB BIRT BPR BUTB CRA IFBS IOFC ISO IT KL KLE KLSE MIS OCM OD OT Sdn TQM

    List of Abbreviation

    Automatic Berhad Bank Islam Malaysia Berhad Bank Institute of Research and Training Business Process Reengineering Bank Unit Trust Berhad Change Readiness Assessment Interest-Free Banking Scheme Offshore Financial Centre International Organisation for Standardization Information Technology Kuala Lumpur Kuala Lumpur Exchange Kuala Lumpur Stock Exchang