Organizational Change And Organizational Culture Development In A Regional Development Bank In Indonesia

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Date
2011-08
Authors
Satya, George Menasye
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Publisher
Universiti Sains Malaysia
Abstract
The 1997-1998 economic and financial crises in Indonesia have impacted both the public and the private sectors in Indonesia. This crisis has also led to reformation of banking sector in Indonesia which has resulted in the privatizations, mergers and acquisition of a number of banks. In addition, the reform of the banking sector also provided an avenue for Regional Development Banks in Indonesia to change their legal entity to become as limited companies. Therefore, this study aims to gain understanding about the impact and consequence of legal entity change in a regional development bank in Indonesia. Specifically, the issues on the organizational change and the organizational culture development in the regional development bank were examined. An interpretive case study utilizing a participatory action research is undertaken in a regional development bank in one of the provinces in Indonesia. Thirty six interviews were conducted with employees of the bank from various organizational and functional levels and with external stakeholders of the bank. In addition, data were also derived from documentary reviews and observations. New institutional sociology (NIS) theory is used in explaining the change process. The findings of this research suggest that 1997-1998 economic and financial crises opened opportunity for the bank to change its legal entity to become limited company. The reasons that the management undertaken this change is to obtain flexibility in decision making and to obtain more capital from their shareholders so that more credit can distributed to the public.
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Keywords
Organizational change and organizational culture development , in a regional development bank in Indonesia
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