By Lamia Dawood, Ph.D. student in Administration and Leadership Studies
Egypt has a relatively diverse economy that is highly centralized on agriculture, manufacturing, and tourism (Economy of Egypt, 2021). The country was ruled by military officers from 1953 till 2011. In January, 2011, the military regime, the poor living conditions, and limited job opportunities caused public discontent, leading to the eruption of the Arab Spring revolution that ousted the president that ruled Egypt for almost 30 years. Egypt’s public sector has long been criticized as overstaffed and inefficient, suffering from absence of necessary finance for upgrading and the rigidity of those administering the public sector’s assets (ahram.org.eg). By 2018, the size of the labor force in Egypt was about 29.6 million, 23.4 million men, and 5.8 million women (heritage.org). The air transport sector including airlines, airport operators, aircraft manufacturers, and air navigation service providers, makes a major contribution to Egypt’s economy and employs 97,000 people in Egypt (IATA, 2021).
This article focuses on applying Social Identity Theory to understand difficulties in implementing organizational change in an Egyptian Aviation firm. Social identity is “individual’s knowledge that he belongs to certain social groups together with some emotional and value significance to him of this group membership” (Tajfel, 1972, p. 292). So individuals perceive themselves as how society perceive the groups they belongs to, and how individuals are conceived by others. The salience of a certain identity dimension is controlled by the extent to which the immediate social context threatens, supports, or invalidates a particular identity (Wearing, 2011). So through social structure or context, individuals determine which identities are most salient, but generally gender and race are the most salient characteristics of a person (Rattan et al, 2019). This case will explore these factors by examining both the organizational and societal factors that shape “insider and outsider” identities and how they – in turn – impact the acceptance and implementation of organizational change after a large societal-change event.
Case information: Organizational Change Attempts in Public Sector Aviation Firms in Egypt
Unlike the United States, Egyptian aviation transportation is considered a public good and comprises part of the country’s public sector. Public sector organizations operate in an “environment which is characterized by a multitude of stakeholders, ambiguous and often conflicting objectives, a high level of scrutiny and external political influences on decision making processes” (Van der Voet et al, in Barker el al, 2018). The complexity of public administration represents a challenge to leaders who aim to make effective organizational change as it affects large scale of people and services. Marquardt et al (2012) stated that organizational leaders are required to take calculated risks, analyze environmental uncertainties, and make skillful decisions based on constraints of time and resources. As making organizational changes have a vital role in securing growth and sustainability of any organization, many aviation companies have implemented some aspects of change in order to cope with the non-stop changes in this field. The causes of change are multiple, among which is to mitigate future risks and environmental uncertainties, to develop more cost-saving processes and to provide more efficient products or services. Abraham & Noumair (2017) identified that external pressures force organizations to adopt changes, including the need for speed and agility, to address the digital environment, to introduce self-managing tools, and to recognize the voices of the employees and customers. However, leaders of government-owned aviation companies or what is called flag carrier companies face additional pressures, as they have to deal with some bureaucratic structures, to follow government regulations concerning investment and be able to compete with private aviation companies or state-owned companies that operate as fully independent commercial companies.
In 2002, the Egyptian aviation maintenance company decided to implement major development plan adopting international quality and operation standards. Organizational changes to all work processes, activities, procedures, and staff’s performance were included in the development plan. The aim of changes was to acquire accreditation from the European Aviation Safety Agency (EASA) and the Federal Aviation Administration (FAA). These two entities inspect aviation companies, their work processes, quality standards, efficiency and proficiency of managers and staff, and based on the results of their inspection, aviation maintenance companies are given or denied the authorization to provide maintenance services to European and American registered aircraft. As leaders are the driving force for a change as their purposeful action can lead to achieving goals through implementing the right organizational change model, a new CEO was in charge in 2004. His mission was to change the work procedures, mindset of employees, and more importantly the mission of the company. The company’s mission was formerly to provide maintenance and repair services to the Egyptian air fleet and other small privately owned local airlines. The company had many management layers and was suffering from bureaucratic work systems that lasted for decades. As in all aviation maintenance companies, it has engineers, mechanics and admins. These categories of the national aviation companies were used to deal with national government entities, to sign aircraft authorization papers from the Egyptian Civil Aviation Authority (ECAA), and to comply with national regulations when repairing an aircraft. Whereas engineers and highly qualified admins were responsible for contacting the aircraft manufacturers like Boeing and Airbus or engines’ manufacturers like GE, RR and CFM. Schein (1996) identified that there are three cultures of management, the operators, the engineers, and the executives. So in order to make organizational changes, effective communication with these three categories was mandatory. The operators are the mechanics carrying out the operational tasks of repairs and maintenance, who were used to only follow the ECAA’s and the engineers’ instructions, but by implementing the development plan, communicating and working with foreign entities was inevitable. The engineers are the aircraft engineers, designers and IT personnel who because of their technological background, saw that changes can only be done through purchasing advanced equipment and establishing hangars with the latest technological equipment. The executives are the admins who communicate with other government entities and aviation authorities, those who would have the task of communicating with international accreditation authorities, in preparation for implementing the new development plan.
As each category believed they are a management entity on its own, it was crucial to communicate the need for change, using the dialect, beliefs and work culture of each. Fernandez & Rainey (2006) stated that change leaders and change participants should pay special attention to many factors, which always starts with verifying and persuasively communicating the need for change. In order to have a smooth transition and to reduce resistance for change, the CEO explained how each category would participate in achieving this change, and the benefits of having this change as it would help the company to expand its scope of services by providing services to international companies. So instead of having local clients and depending on profits coming from local companies, the international accreditations would give authorization to also serve aviation companies with European and American registration. The CEO also discussed the fears and concerns of all employees about the changes and reassured that the new changes do not impose any threat to their job stability.
To achieve the new goals, changes had to be done on two levels, the level of work procedures and measures to match international standards, and the level of personal performance to be aligned with the requirement of the international customers and civil aviation authorities. The CEO adopted the Business Process Reengineering (BPR) organizational change model, which is a management and performance improvement strategy that focuses on the examination and redesigning of work flows and work processes (Pershing, 2015). This method makes changes through obliteration of existing work processes with new competitive more efficient processes based on modern information technology. So instead of collecting data and making comparison between old and new work practices, the new practices were the ones that the staff were trained on. In order to encompass the new expansion plan of serving international aviation companies, the company started to operate in two work shifts instead of one. New information system was developed with modelling and simulation capabilities which allow the performance of a process to be assessed. This was followed by a phase of redesigning, reorganizing, and measuring the newly configured processes. Hence, lines of authority, control structures, old ineffective processes were revamped with cohesive work structures and processes. An intensive examination of organization’s structure, partnerships and mergers were made and a successful partnership with Rolls-Royce was made to manage the engines workshop with more advanced technology.
To help changing the work culture from serving local customers to serving international aviation companies, a European consultant company was hired, who has an experience in shifting the work process of aviation companies to become a certified Maintenance and Repair Organization (MRO). Members of the consulting company conducted training courses to each category separately, then integrated different categories together, as the work tasks mandate cooperation of all categories. This learning process caused what Argyris (1996) calls “defensive routines” resulting from new methods of learning or solving problems that do not diffuse or even become embedded in the groups of organizations. Defensive routines are what incompetent employees reside to in order to defend themselves from the threat and embarrassment aroused when their abilities were negatively evaluated by the consultants. What mainly caused this problem was that mechanics, who were used to deal with Arabic-speaking clients, were required to communicate with clients from all over the world, so they felt there would be a language barrier to carry out their tasks. What worsened this feeling of being incompetent, was their awareness that engineers speak different languages, which made them fear that the power of engineers on them would increase and the value of their work would diminish. In order to address this issue, the CEO sent all mechanics, those with good English background or not, to the Egyptian training academy where they all had training courses on English language. This made them feel they are valuable human capital, and that they are an important part of the change. Generally, in order to maintain effective results of the implemented organizational changes, leaders should create a participatory environment where a learning capacity is developed to keep the cycle of changes. The CEO and the management team also had a plan to deal with the aftermath of the changes in an effective way. This plan works when improvements are no longer enough, so outcome measurement systems were in place to ensure that constant, effective and functional work standards are maintained. As a result of such good planning and adopting the right organizational change model, the company acquired the EASA authorization in 2016, and a year later the FAA approval was also granted. All employees were very proud of their achievement and looked at the CEO as a great leader, who managed to achieve what they deemed, at some point, as impossible.
Identity salience in Egyptian aviation firms after the Arab Spring
After the eruption of the 25th of January revolution in Egypt, which was part of the Arab Spring uprisings, there was a public discontent with the public sector entities. The revolution caused considerable losses to the national carrier due to an increase in fuel prices, the devaluation of the Egyptian currency and continuous strikes within the company. Strikes were mainly to have monetary promotions, as many thought it was a chance of a lifetime to ask for a raise, when the government was falling and chaos were everywhere. They felt that without their work, economy will keep on deteriorating so the government had to grant them the raises. In order to address these strikes, the CEO hired a consultant company to evaluate each employee, technician and engineer according to their skills, job experience and educational background and to compare their salaries with staff’s salaries of international aviation companies. The consultant company introduced the Key Performance Indicators (KPI) as quantifiable measurements to gauge the performance of the staff in relation to organizational goals. The study was planned to take about six months and the implementation of it would take another six months. Those who were impatient and who were encouraged by the strikes happening in other public sector companies; incited others to stop working to push the immediate implementation of the promotion plan. Few started these strikes and others followed as in the contagion theory, where the normal individual’s behavior turning irrational or violent according to the nature of the crowd. This theory states that the mass behavior is uncontrollable by an individual, and challenged by collective thinking as a group rather than personal thinking personally (Le Bon, 1897). Some of those who were in the strikes started to call for the CEO’s resignation and others followed them as they became unaware of their behavior and they engaged in behavior that they find daring to attempt. The CEO who was viewed for years as “effective leader” was then labelled as a “traitor affiliated to the old regime”, as he was a former military officer.
When the CEO felt he did not belong to the group any more, as he was perceived then as a member of the out-group. He felt disconnected from his role identity, he had to leave the role of “the leader” and take the role of “former military officer” the one that is more salient to him at that time. So he had to resign “When individuals could not negotiate differential leadership performances in a group that verified their identity, they became less satisfied with their role and less inclined to remain in the group” (Stets & Burke, 2000, p.227). After he announced his decision to resign, all those who were in the strikes regretted their action and there were trials to convince him to stay in his position. The company did not achieve much success since he left and all his successors always find themselves being compared to him. This shows how when people return to their rational thinking, they would regret their behavior that was caused by the group influence. Having the role identity of a leader can encourage any individual to perform better to keep the good image held between the group members. While being labeled with deviant characteristics can limit the development of any person and might force them to actually act in a deviant way as the society or groups he/she belongs to mandate playing this role. The identity theory identifies that self-categorization of an identity as an occupant of a role, is incorporated into the self and expectations associated with that role and its performance (Stets & Burke, 2000).
Further considerations: Power and Prestige in Egyptian Public Sector Aviation
Tajfel & Turner (1979) identified that status hierarchies reflect a group’s relative position using some evaluative dimensions of comparison, where differentiation in valued outcomes is not correlated with the attributes of individuals, but rather to the quality of the social positions individuals occupy. Gould (2002) stated that ranked social positions would constitute a stable and self-reinforcing system even so benefits are associated with ranked positions, rather than contribution to group work. In 2015, the aviation maintenance company also suffered internal conflict between engineers and mechanics, as members of each category believed their work brings more profit to the company.
Looking at the reward system, mechanics believed that their hard labor is the reason for the company’s profit. Engineers, on the other hand, believed that without their good experience and educational background, the company wouldn’t survive. Some concepts of in-group versus out-group threatened the easy flow of work and effective operations. “When a specific social identity becomes the salient basis for self-regulation in a particular context, self-perception and conduct become in-group stereotypical and normative, perceptions of relevant out-group members become out-group stereotypical, and intergroup behavior acquires competitive and discriminatory properties to varying degrees depending on the nature of relations between the groups” (Hogg et al, 1995, p.260). Each group believed they deserved to have a better monetary rewards, so they were competing over the same resource which is money. Tajfel & Turner (1979) identified that competition with out-group enhances in-group morale, cohesiveness and cooperation and heightens identification and attachment with the in-group. Although in normal situations, engineers might have differences and conflicts between each other, same as the mechanics with each other, but in case of threat from an out-group, in-group members join hands to achieve their common goals. The status hierarchy gave privilege to engineers as they have a higher education and they are the ones who give work instructions, so they have both power and prestige.
The same concept had been illustrated in Sherif’s Realistic Group Conflict Theory which stated that opposing claims to scarce resources, such as power, prestige, or wealth, generate ethnocentrism and antagonism between groups (Tajfel & Turner, 2018). Although both share the same task but the status hierarchies are different, so mechanics had to find another way to ask for a raise. The rational thing was at that time, is to compare themselves with whom they perceived as the other group competing on the company’s resources, which were the admins. The admins has the prestige as they have higher education but the mechanics had the power as revenues of maintenance companies mainly are based on the profit coming from maintaining and repairing aircraft. “A performance expectation is a generalized anticipation of one’s own or another’s capacity to make useful contributions to the task” (Ridgeway & Berger, 1986, p. 604). Having this powerful position, the mechanics were granted a raise that was equal to double the salary of an admin with equal years of service. So regardless of the contributions or hard work of the admins in achieving organizational goals, mechanics having the power of directly affecting the company’s profits made their claim accepted and their request was granted. In this case, positions are not relevant, but when power stood against prestige, power won.
The culture of each country explains the intensity, the severity, and the level of application of the social identity and the role identity theories. The effect of power, prestige and wealth differs according to its scarcity or availability in each country. Social Identity theory suggests that individuals of groups with similar social status usually express prejudice and hostility against those who are different or conceived with lower status. Role identity theory highlights the differences in perceptions and actions that accompany a role and reflects a set of expectations for goals and behavior. Status hierarchies affect social interaction, behavior patterns and evaluation of performance. Incentive system in organizations values power and prestige more than contribution to achieve organizational goals. Such unwritten concepts create inequality in the workplace, and in societies as a whole. Although such unfair categorizations are exercised everywhere but in developing countries, such inequalities are more severe and are practiced without being conceived as acts of prejudice or discriminating. This differentiation limits the employment of potential talents and reduces the development of personal competence and capacities.
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