RECOMMENDATORY REPORT

To: Chairman of the Board of Directors Premier Service Medical Aid

Scheme (PSMAS)

From:

Subject: Change Management Plan for Premier Service Medical Aid Scheme

Date: 03.07-2022

Executive Summary
 Purpose (guided by Statement of the problem and your goals and objectives)
 Methodology (Change diagnostic tools used, Change Scope, Type, Models
used)
 Change Plans initiatives and Resources
 Expected Outcomes
 Conclusion and recommendations for Sustaining the Change
(Your executive summary should not exceed 1 page or 300 words. The
bulleted subheadings above in your Executive Summary are silent – do not
show them. There are there to guide how thoughts are laid out.)
Introduction

Terms of Reference
Who gave your firm the mandate to implement change and under what terms of the contract

Methodology and Procedures

(What Procedural steps did you follow to implement the terms of reference, covering what time
frame and the expected budgetary estimates. Please be guided by the Phases shown below).

Implementation of the Full Change Plan

Show you change plan here and provide supporting evidence: data and documentation for the
internal and External diagnosis which you conducted
 PHASE 1
Current State: Diagnosing Dissatisfactions with Status Quo (Present)
And Envisioning the Future

1. Background of the Enterprise and its Challenges

This section outlines the background of the enterprise under investigation which is the Premier
Service Medical Aid Society (PSMAS) in order to get clarity and understanding of where it is
coming from and where it is going, thereby the context of its challenges and issues will be clear.
This study will use as sources of information, the Company Website, Annual Reports; financial
reports such as 10-K, 10-Q, and 8-K; and corporate social responsibility reports and the
Newspapers which carries information about the company.

1.1. Historical and Contextual background of the Company

Premier Service Medical Aid Scheme (PSMAS), was formed in the early 1930s’ as the Public
Service Medical Aid, to provide medical insurance for those in state service, whether civil or
uniformed. The Society went through various stages of growth, building up from one branch to
the next, all in an effort to offer the best medical aid services to the growing membership. The
vision of PSMAS is to be the epicentre of members’ access to affordable quality health care by
2025. The Mission is to generate the necessary change in the healthcare industry by providing
members with cost effective quality healthcare services and products. Its core values are
teamwork, communication, integrity, commitment and empathy.

After independence, medical aid was introduced as a benefit for many employees, with the
private sector and individuals later also being allowed to join. The branch network of PSMAS
now stretches across the country covering 17 cities and towns. In 2006 PSMAS formed Premier
Service Medical Investments (PSMI), which acted as a conduit vehicle for the establishment of
clinics, laboratories, pharmacies, hospitals, dental centres and rehabilitation centres nationwide.
It has evolved to be Zimbabwe’s largest medical aid service provider. Premier Service Medical
Aid Society is a private company controlled by a Board of Directors and is a member of the
Medical Aid Societies in Zimbabwe which are regulated by Statutory Instrument 330 of 2000.
The Minister of Health and Child Care is the regulator of the Statutory Instrument 330 of 2000,
and is also responsible for issuance and renewal of operating licenses to all medical aid societies.
There has been an issue which arose during the course of the years where the Government of
Zimbabwe views PSMAS as a parastatal and considers it to be such and a legal standoff is there
according to the report by Parliamentary Legal Committee (2015). The report outlines that the
Government only contributes about eighty percent to PSMAS through subscriptions of its
employees but that does not make it a parastatal and as such the provisions of the State
Liabilities Act cannot be applicable to PSMAS. Furthermore, liability upon the State must be as
a result of the acts of its employees of which the employees of PSMAS are not part of the Civil
Service.

These squabbles between the Government and Worker representative unions like the Zimbabwe
Congress of Trade Unions (ZCTU) and the Zimbabwe Confederation of Public Sector Unions
(ZCPU) over ownership has led to the Board to have a variety of members. The PSMAS board
has three members who are appointed by the government to represent it, three members which
are appointed by the civil servants to represent them, three members who are elected by the
members and two members who are elected by affiliate employer organisations excluding the
government. The Managing Director is the Principal Officer and is an ex-officio member.

1.2. Contextual Challenges faced by the Company

This section outlines the status quo of the company with regards to the external and internal
environment it operates in.

1.2.1. Industry analysis (Tool- PESTLE Analysis)

A PESTEL analysis is a framework or tool used in strategic management to analyse and monitor
the macro-environmental (external marketing environment) factors that have an impact on an
organization, company, or industry (Vaitkevicius, 2006). It examines the Political, Economic,
Social, Technological, Environmental, and Legal factors in the external environment. A
PESTEL analysis is used to identify threats and weaknesses which are used in a SWOT analysis
which will be used in the internal analysis of the company. The primary purpose of external
analysis is to determine the opportunities and threats in an industry or any segment, which will
drive profitability, growth and volatility (Vipond, 2022). This section will outline the challenges
bedevilling PSMAS in light of a general industry analysis, it addresses the factors that constraint
the operations of the company and pose opportunities and threats to the companies in the
industry.
 a. Political Factors

Political factors include government policies, leadership, and change; foreign trade policies;
internal political issues and trends; tax policy; regulation and de-regulation trends (Downey,
2007). The government meddles in the affairs of PSMAS through the organisation which
controls it including the appointment of some of the leaders and eyes its acquisition to be a
parastatal and this has caused boardroom squabbles from as early as the 2000s as other
stakeholders view that PSMAS is a mutual society which must be owned by its members. The
fears are that if the government takes over PSMAS, due to the political appointment of
leadership which might not be competent or the board of directors which will be undermined by
the parent ministry and ends up being powerless the service delivery will plummet (Zvitambo &
Mhizha, 2019). The government has the power to amend the laws governing the company
hence poses a significant threat to the company. The fact that the board is made up members
drawn from different organisations has caused serious board room squabbles in the quest for
control, the result has been the members from the government complaining of being side-lined in
meetings. According to (Masau, 2022), controversy continues to stalk the Premier Service
Medical Aid Society (Psmas) as nasty boardroom squabbles are now embroiling the
organisation. Among these disturbing actions is the holding of caucuses to which some selected
members of the board are invited to the exclusion of others, pointedly members appointed to the
board by government. Invariably, there is no clarity as to what the agenda of such caucuses are.
That is not the way boards are supposed to function, and certainly not the way good governance
principles are supposed to be applied (Oliver, 1997).

b. Economic Factors

Economic factors include current and projected economic growth; inflation and interest rates; job
growth and unemployment; labour costs; impact of globalization; disposable income of
consumers and businesses; likely changes in the economic environment (Makadok, 2018).
Zimbabwe experiences economic depression which affects business and performance of many
organizations including State Owned Enterprises. The unstability of the local currency of which
the government uses that to pay it workers who are the majority of the PSMAS customers pose
operational challenges which has resulted in the members of PSMAS being asked to pay a
certain fee on top to access healthcare outside of PSMAS. Against a backdrop of poor wages and
economic challenges facing the ordinary Zimbabwean that becomes a thorn in the flesh as it will
erode the savings and disposable income of its members especially those in government services.

c. Social issues

Social factors include demographics (age, gender, race, family size); consumer attitudes,
opinions, and buying patterns; population growth rate and employment patterns; socio-cultural
changes; ethnic and religious trends; living standards (Wernerfelt, 1984). PSMAS has been
embroiled with scandals like the 2013 Salary gate scandal where, Premier Services Medical Aid
Society (PSMAS) Chief Executive had been fired following a public outcry over his obscene
US$ 210 000 monthly salaries. This development had come amid reports that the PSMAS top
management was gobbling at least US$ 1.3 million in monthly salaries and allowances while
PSMAS owed various service providers US$ 38 million as at 31 December 2013 (Rusvingo,
2014). Recently the PSMAS board have been accused of splashing money on top of the range
cars and receiving hefty perks while medical aid fund contributors are struggling to get medical
treatment as service providers are being owed. The Zimbabwean people in general will have the
feeling that PSMAS is a public entity with lowly paid public or civil servants being the largest
contributors and their hard-earned little money is then swindled by a few greedy people such as
the PSMAS bosses who neither care nor have mercy for the poor people in our society. The
workers too ill be demotivated in light of such scenario.

d. Technological issues

Technological factors affect marketing in (1) new ways of producing goods and services; (2) new
ways of distributing goods and services; (3) new ways of communicating with target markets
(Downey, 2007). The issues of corruption and misgovernance by PSMAS also affects its
operations at its clinics as key technological devices cannot be acquired as the board is
deliberating on boardroom wars. This drastically affect service delivery and is detrimental when
it comes to competition and as far as relevance is concerned.

e. Legal issues

Legal factors include health and safety; equal opportunities; advertising standards; consumer
rights and laws; product labelling and product safety. The issues of bad corporate governance,
corruption and underhand dealings have been reported at PSMAS with the executives being said
to divert business money to gold mining and microfinance activities. According to Zvitambo &
Mhizha (2019), business governance has become a tropical topic for scholars due to scandals
happening in various national companies, international organisations and countries across the
world. Globally, international organisations had been rocked by a plethora of scandals ranging
from corruption, creative accounting, nepotism, and collusions, to name a few. Scholars point
these issues as signs of current governance models failure and proposed other types of theories to
direct business governance. The PSMAS board and its stakeholders need to enact a strong
constitution that desuades these shenanigans which has been rocking the company for a long
time. For starters the current legislation Statutory Instrument 330 of 2000 which governs how
medical aid societies operare has loop holes when it comes to corporate gorvenance issues and
the recently ammended Health services bill of 2021 still carries loopholes. Therefore legal action
against the rot at PSMAS seems a long way off.

1.2.2. Internal Company analysis (SWOT Analysis)

Internal analysis is the process of analysing various internal components of the company both
tangible and intangible like; company’s processes, assets, and resources (Downey, 2007). It helps
the decision-makers of the company to determine the growing areas and develop a business plan
and practical business strategy. Internal analysis is a great tool for companies to improve their
main functions. This study will use the SWOT analysis to carry out the internal analysis of
PSMAS.

The SWOT analysis is a very famous and common business analysis tool, and it offers you both
internal and external analysis of the company. The term SWOT analysis comprises four main
elements; strengths, weaknesses, opportunities, and threats (Makadok, 2018).

Strengths of PSMAS

It has the largest subscriber base among all players in the medical aid field in Zimbabwe, given
that it services also the majority of the civil servants which pays without default. It also has
strong ties with the government which helps in its medical procurements and service provision as
the government bails it out hence funding gaps must not be a thing to worry about. It has its own
medical facilities and in terms of the organizational capabilities, PSMAS has the largest branch
network as compared to other competitors hence cutting the outside services hence it possesses a
strong competitive advantage over its competitors.
Weaknesses

Poor governance. Boardroom troubles as a result of conflicting owners. Disgruntled service

providers as a result of huge bills they are owed hence they turn away therefore it can be said
that PSMAS has problematic supply chains.

Opportunities

Given that it is well resourced and have the largest number of customers, it can use its resources
and capabilities to come up with innovative products which can resonate with both the
informally employed customers and those in the niche it currently service, thereby growing its
customer base.

Threats

Government takeover due to poor management. Loss of customers due to disgruntlement as a

result of poor service delivery.

2. Statement of the Problem

PSMAS has been bedevilled with poor governance with its top management being accused of a
range of corporate misgovernance charges from corruption, not holding the Annual General
Meeting (AGM) for over two years, diversion of company resources for personal usage and hefty
salaries and benefits even though they are aware that the company has not paid its creditors. This
has caused services providers to turn away the PSMAS card carrying members thereby
prejudicing and depriving them access to healthcare because they are owed sums of money by
PSMAS. If they are not turned away they are given mediocre services and told to top up what
they have paid. This has led to protests from the members against the board and bad publicity
against the company which leads to loss of customers to competitors and lack of relevance for
the company. The company needs to serious consider sorting out this rot so that they instil
customer confidence in their services and order to its board-room otherwise it will be extinct or
faces imminent government take-over. The annual general meeting needs to be held and
resolutions like the constitution amendment that tightens the screws against corporate
misgovernance and selection of a new competent board that can turn around the current mess
otherwise competitors will capitalise on this gap and steal all clients.

3. Articulation of Vision Statement, Goals Statement, and Objectives aligned to the

Goals.

3.1. Vision Statement

To effect change in the top management recruitment procedures and company policy to reduce
mismanagement and to enhance service delivery one step at a time.

3.2. Goals Statement

This change management plan must yield good corporate governance inside the organisation and
lead the organisation to become a world class medical aid society by 2025. This goal will be
achieved through change in the management and company policy to ensure that the previous
challenges do not repeat itself.

3.3. Objectives

The objectives of the change plan are:

 To change the company policy to ensure good corporate governance is followed in the
organisation.
 To change top management recruitment policies so that competent management is
appointed that will lead the organisation towards success.
 To ensure that service delivery is restored to satisfactory level.

4. State the Scope of Change, Type of Change, and Change Management Model
adopted.

The scope of change in management helps you as the change consultant to ensure that all
stakeholders understand the project, it goals and that they work together toward a shared
definition of success. The change that is sought in this project is that of Top management and in
the company policy.

The type of change sought is developmental and transitional. Transitional in the sense that there
is need to implement a new course of action as far as the company policy is concerned to plug
the loopholes which has been causing corrupt tendencies in the top management and allowing
them to contravene the corporate governance laws. Developmental change is required in the
sense that there is need to effect improvements in the existing top management recruitment
procedures.

According to Downey (2007), organisational change is now a part of doing business and hence
many models of change have been devised and are used in the world. This case will consider the
usage of the Kotter’s change management theory. The advantages that are brought about by this
change model are that it is an easy step by step model which provides a clear description and
guidance on the entire process of change and is relatively easy for being implemented. Emphasis
of the Kotter model of change management is on the involvement and acceptability of the
employees for the success in the overall process. Furthermore, the emphasis is on preparing and
building acceptability for change instead of the actual change process.
 PHASE 2
TRANSITION STATE: PLAN AND IMPLEMENT CHANGE
3. Implementation of Change

A change management plan is a process a business follows to implement changes across the
organization (Vaitkevicius, 2006). Change management plans are typically used for significant
or complex organizational changes that require a more strategic approach because of their impact
on someone’s job (Vipond, 2022).

The steps that were taken to implement change or that were involved in the main change plan
were to come up with clear vision of what is supposed to be achieved and the success definition
followed by clear objectives of what is supposed to be achieved and when. The goal at this point
is to alert everyone in the organisation about the change that is coming and this is necessary to
help those who are directly affected by the change to adapt. In this case of PSMAS, the
organisation must completely change its top management recruiting approach and company
policy to decrease cases of mismanagement. Each of these suggested changes come with their
own set of goals and the core goals of this change management plan informs everyone about the
changes and guides those who will be directly affected by them.

Then a communication plan was drafted implemented and implemented. Communication is key
in any interaction, but especially when it comes to organizational change (Kotter, 1996), and this
is because organisational change often includes multiple moving parts that must be clearly
communicated so no one gets left in the dark. The communication plan in this case of PSMAS
will be to write to all stakeholders who elect members who sits on the board, that is the
government, the worker representative unions, the members’ leaders, the civil servant leaders’
and to address and engage all PSMAS employees about the impending change. The
communication also allows space for feedback from all those involved to respond to and offer
suggestions about the changes being sought. The understanding at this point is that not all of this
feedback may be positive but knowing how the team feels about the transition and allowing them
to feel heard are vital to addressing and calming their concerns.

According to Kotter (1996) an organisational change significant enough to warrant a change

management plan probably includes new features or procedures that your employees will need to
learn. In this case of PSMAS, meetings and training sessions for all parties involved will be
conducted to educate everyone of what will be covered and how will it be covered so that every
stakeholder gets hands-on experience with the impending changes and ask questions in a safe
environment where everyone learns together. It is also understood in this case that a handful of
meetings may not be enough for everyone to grasp the scope of the changes. The plan is to
provide helpful reference sheets, such as FAQ documents, that the stakeholders can access if
they have simple questions that can be answered without a call or meeting.

The resistance management plan involves the set of steps, strategies and activities and
approaches used to identify, evaluate, manage and resolve resistance to change. Since the
existing board already had deep fissures as far as legitimacy is concerned the proposed reforms
many be resisted as the old board members might not be willing to leave office. The plan here is
to use researching and modelling the responses of the various stakeholders involved in the
project. Microsoft excel will be used to build advanced interactive reporting dashboards that will
give faster insights that can be used to develop, revise and optimise the activities involves in the
change management to overcome every resistance to change in real time.

The resources plan identifies, organises and lists the resources needed to complete a project
(Kotter, 1996). The plan maps out how and when the resources will be used. The resources
needed are planning and reflection tools, finances and the people. In this case all the resources
required will be provided by the Ministry of Health and Child Care who ordered this process to
be conducted. The resources plan in this case will be achieved using Gantt charts and Microsoft
Excel modelling to create interactive dashboards which will give a clear picture of what will be
taking place for easy reporting to the Ministry and the company management.

5. Give a Brief Change Resistance Plan

The forms of resistance to change that were identified in this case were logical, emotional and
sociological.

In the case of logical resistance, most of the engaged stakeholders will see the impending change
as a second job. The consultant and the change team will tackle this by acknowledging the
stakeholders’ frustrations and highlighted to them that proper time will be devoted to training
and reflection and that allowances will be made to ensure that everyone gets on-board with the
suggested changes.

In the case of emotional resistance, the anticipated reaction will be that the stakeholders will be
uncomfortable with the suggested changes and most of them will boycott meetings and trainings.
The planned reaction will be engaging each stakeholder individually and explain to them the
bigger picture and how the outcomes of the project relates to them and their future prospects.
This is done so that each will feel encouraged to participate knowing fully what is in it for them.
This is part of Maslow theory of needs, motivating people to participate.

The last case is the most difficult to manage but can be identified with relative ease, as social
values are part of the culture of an organisation. This is because of the interrelationships which
will have formed between middle and lower management and the top management and their
handlers. This will take a time and requires investments in form of patience and practice to
dislodge old bonds and form new ones through rigorous training.
 PHASE 3
DESIRED NEW STATE: REINFORCING AND SUSTAIN CHANGE
The long-term success of all change initiatives relies heavily on reinforcement, as without it,
people will naturally revert to the state with which they are most familiar and therefore
comfortable with (Kotter, 1996). The model that will be used to reinforce change will be the
sustainable change model developed by Harrington et al (2015). Change management
constitutes the proactive steps taken to enable transition from the current state to the future
state with the goal of improvement that is sustained over time. The model for sustaining
change is illustrated below.
In the case of PSMAS the incoming leadership will be taught on the importance of
supporting and sustaining change from the top. Support from the top is evidenced by
executive leaders walking the talk, visibly and audibly supporting the goals of the project or
program when communicating with staff (Harrington, et al., 2015). This must also be the
case when interacting cross-functionally with other organizational units or departments.
Creating and communicating a crystal clear strategic vision and agenda set the foundation for
a successful project or program.
The management must also utilise change sustaining approaches in all their endeavours,
because the change program’s lifecycle can last for multiple years. Over the years, there can
be shifts in the people involved on the program over thus as part of this plan, a change
sustainment plan will be made to ensure that critical change elements are not inadvertently
disrupted as team members transition on and off the program team.
The top management will be trained to forego rigidity and be able to shift paradigms when
needed. This is because a focus on sustainable change must look beyond simply effecting the
change and deal with the potential for the organization to fall back into past ways (Gelfand,
et al., 2008). So not only is inertia a factor, but the tendency to revert to a more comfortable
and familiar way of doing things when pressures mount. Shifting the paradigm from how
work used to be done (the present state) to how work will be done (the future state) includes
removing the tools and mechanisms used in the past that are no longer of value. The whole
organisation must therefore be prepared and trained to make the decision for the required
mind-set shift first, and then work on the behavioural shifts and thereby the organizational
shifts will then follow. This step is necessary because there are no shortcuts to
transformational change (Gelfand, et al., 2008). Transformative change in this case however
breakdown the scope of change into manageable segments, identify the key behaviours
necessary to sustain the change, then modify and reinforce positive behaviours by changing
the structure of rewards and consequences while measuring progress toward the stated goals.
It must be also noted by the incoming and future management that change sustainment
requires ongoing dialogue and communication so that individuals understand why certain
actions, processes and behaviours are expected of them (Beckhard & Pritchard, 2007).
Educational efforts, coaching/mentoring and review and evaluation may help everyone in the
organization understand the evolving impacts of change, ongoing efforts to sustain the
change and the associated benefits.
The PSMAS leadership must also invest in planning for sustained results, through practice
and iterations of change, the investment in change will be realized as true project return on
investment (ROI) is attained. As additional organisational capacities become available and
the organization becomes accustomed to adapting to change it yields a well of resources,
which can be converted into sustaining prior gains, investment in innovation, new capacities,
and new products and services. this leads to competitive market advantage, building further
capacity for additional iterations of change and innovation (Beckhard & Pritchard, 2007).
In conclusion, the success of the change project involves preparing the organisation for
transformation, ensuring stakeholder buy-in, and engaging executive sponsors to champion
and support the change before, during and after its implementation. By following the model
for sustainable change suggested in this case, the organisation will be better positioned to
maximize the return on investment from programs, projects and people. By following these
practical methods, the organization will progress from mere installation by evolving and
involving the culture of the organization into a new paradigm of implementation through
ongoing enrolment and alignment of all stakeholders. When stakeholders are motivated to
change, risks and rewards are understood and the change embraced as beneficial to the
organization and each stakeholder, then change can be sustained.
 Conclusion and Recommendations
In conclusion as with any change process in any organisation, resistance will be there. The
objectives of this plan are to change the company policy to ensure good corporate governance is
followed in the organisation, to change top management recruitment policies so that competent
management is appointed that will lead the organisation towards success and to ensure that
service delivery is restored to satisfactory level. The objectives are meant to provide a ground to
change the organisational culture for good, and change the management process to shift from bad
to good corporate governance. As the plan aims to close loopholes which were being used to
milk the organisation whilst the service delivery was nosediving, the top management will not as
cooperative as they are supposed to. The consultant will engage each leader individually and
appraise them of their performance, note their concerns and then take them through the supposed
changes and what is in it for them. This method is supposed to dispel fears and enhance
cooperation. The process is progressing well in terms of the financial budgeting and time
planning. Once all trainings and meetings are done the day-day implementation of the rest of the
plan will be handed over to the management team headed by the Chief Executive Officer and the
directors. Notwithstanding the fact as the consultant l will continue to maintain regular oversight
on the implementation process for the next 12 months so that the momentum in the change
process which started in earnest during last 6 months is sustained and the changes in the
organisational culture are noted.