Assignment 1: Stories of Change
Read the “Stories of Change” section in Chapter 1 of the textbook that describes how companies such as Hewlett Packard, IBM, Kodak, and McDonald’s have addressed significant changes within their organizations.
Write a four to six (4-6) page paper in which you:
1. Using Kotter’s model, identify the three (3) most significant errors made out of all of the change stories presented and describe the ramifications of those mistakes.
2. Make at least one (1) recommendation for each change story that would have improved the effectiveness of the change process and explain why that recommendation would have altered the outcome of the change process.
3. Attribute a change image to the leading managers or directors in each change story and provide an explanation as to why that change image label is appropriate.
4. Recommend a different strategy for managing change in each of the one change stories presented and provide a justification for your recommended strategy.
Sample Essay Paper on : Stories of Change Essay
At present, many individuals and organizations predict that most of the quality efforts, downsizing, re-strategizing, reengineering, and cultural renewal projects will soon be no more (Yaeger & Sorensen, 2009). However, this is very unlikely. Powerful macroeconomic forces are at work here, and these forces may grow even stronger over the next two decades. As a result, more and more organizations will be pushed to increase productivity, locate new opportunities for growth, improve the quality of products and services, and reduce costs further. Recently, key change efforts have improved the competitive standing of some organizations, have helped others adapt significantly to shifting conditions, and have placed a few more others on the path of experiencing a better future (Yaeger & Sorensen, 2009). However, in a number of situations, organizational changes and improvements have been disappointing and irreparable damages have been appalling, with wasted resources and frustrated, scared, or burned-out employees. Failure to a change is inevitable. Whenever human communities are forced to adjust to shifting conditions, pain is always present. In the process of incorporating organizational changes, many errors are usually made out that brings down transformational efforts as witnessed in some leading organizations worldwide (Yaeger & Sorensen, 2009).
Most initiatives of change by organizations, whether meant to reverse the direction of a collapsing organization, improve culture, or boost the quality of its products, often bring about a mix of results (Palmer, Dunford & Akin, 2009). Frequently, many fail desolately. In the world of many competing organizations, managers do not understand that organizational change is a process and not a onetime event. Transformation takes place in stages with subsequent stages building on one another. This process may even take a decade. Pressures emanating from top managements usually force managers to different organizations to skip some transformational stages. However in business, running the short way never work. In advancing organizational changes, even the most experienced managers make grave mistakes. These mistakes include not anchoring changes in the corporations’ culture, declaring victory too soon, and not systematically planning for and creating short- term wins. The results of these involve devastation of the entire transformation effort, reversal of hard-won gains, and loss of momentum (Palmer, Dunford & Akin, 2009).
In the past, managers of successful organizations such as Hewlett-Packard Company, Kodak, McDonald, and IBM have made some grave errors that have cost the respective companies a lot of resources. The Hewlett-Packard Change Story concerns Carly Fiorina’s, the CEO at Hewlett-Packard, efforts in establishing and managing a merger with Compaq Computer Corporation (Palmer, Dunford & Akin, 2009). In her attempts, Fiorina is faced with stiff opposition both internally and outside the company. This includes her fellow management team, the staff, and the head of concerned stakeholders from outside the company. Some argue that the company worse be worse a merger than it is then. Deutsche Bank, a major shareholder, has the most compelling vote towards the organization of the merger. Finally, parties to the two companies, Hewlett-Packard and Compaq Computer Corporation gave a positive vote that gave a nod to the formation of the merger. In her management of the newly formed, Fiorina made considerable errors that could haunt the company in future (Palmer, Dunford & Akin, 2009). Originally, these two companies had very different cultures, or the way of doing business. Most importantly, she did not anchor changes well enough into the resulting corporation’s culture. This was made worse by the strained relationship she had with her own staff. The employees were not confident with the proposed merits of the merger. For instance, some clients such as Ford were dissatisfied with the new method of marketing products separately to them. They were used to being presented with a package of services at a time (Palmer, Dunford & Akin, 2009).
At first, the Hewlett-Packard and Compaq Computer Corporation merger lacked a clear vision that could steer its goals with the necessary urgency that was required. Further, Fiorina had a weakness of undercommunicating the corporation’s new vision to all the stakeholders. As a result, the corporation’s employees were misinformed on the right place of the company in the market. It thus lost a considerable share of the market to some bitter rivals, IBM in service provision, and Dell in the personal computer business. Poor results and mismanagement led to her ouster in 2005 (Palmer, Dunford & Akin, 2009).
In some companies, organizational change entails a total overhaul of both management and staff placements. Here, IBM Company change story is an example of this organizational change. IBM is one of the pacesetters in the internet field. Once internet was revolutionalized at IBM thanks to computer programmers Grossman and Patrick, the company incorporated highly trained and experienced personnel in all its departments to venture further into this technology (Palmer, Dunford & Akin, 2009). The change of the management at IBM involved the disbandment of the executive management committee by the then CEO, Palmisano to create three teams of personnel that was constituted by individuals from all departments in the company. Though Palmisano’s transformational efforts looked objective from the outside, he lacked a clearly defined vision that would guide the implementation of the company’s goals. He management style was egocentric in that he evaluated issues of concern to the company from his own perspective. For instance, he acquired PwC Consulting with an aim of bringing more expertise to administer services to the company’s clients. This in itself had a short-term impact of bringing about confusion in the integration of the two different cultures (Anderson & Ackerman-Anderson, 2010). Further, Palmisano only engaged long term strategies towards achieving the company’s goals. He was unknown to planning and the creation of short term objectives that would be more specific on what is to be achieved within a specified period. This led to loss of employee motivation. Later, the company spent huge sums of money to reactivate the lost interest by the staff (Palmer, Dunford & Akin, 2009).
The level of technology at present has necessitated the workability of things that could be done before. In 2003 (Palmer, Dunford & Akin, 2009), Kodak announced its intentions to start digitalizing its products in the wake of a new spreading technology. This move attracted stiff opposition from a number of stakeholders in the company that included investors and the general staff. Initially, this new incorporation would layoff a high number of workers who were employed for their physical labor. At this, the management lacked a universal working formula that would guide the transition from the analog ways to the digital ways. The workforce was a confused lot and lacked a guiding coalition. Managers were divided and could not make substantial decisions to last. As a result, this transformation took a whooping 10 years to be implemented with the layoff of about 100,000 employees worldwide (Palmer, Dunford & Akin, 2009).
Competition in the world market has become stiffer than ever. Therefore, for a company to survive this competition, it must establish some growth strategies that match the trends in the market. However, growth possibility curves for some companies are so ambitious that they cannot be managed in both the long term and short term periods. This is the situation that affected McDonald’s in 2004. The company experienced extraordinarily fluctuations in sales at the wake of its ambitious product diversification process (Palmer, Dunford & Akin, 2009).
Issues of great importance in business need to be addressed by all stakeholders. For instance, the Hewlett-Packard and Compaq Computer Corporation would have worked better if the CEO, Fiorina had involved all parties in planning for the merger (Palmer, Dunford & Akin, 2009). Employees would have been psychologically aware of the move, and they would welcome its establishment. Stakeholders feel esteemed when they are engaged in decision-making processes and usually take any move as their own initiative. Vision is the core subject in business. When a business lacks a clearly defined vision, it is deemed to fail (Anderson & Ackerman-Anderson, 2010).
Introduction of new methods in business usually changes the way of doing things. Therefore, objectives must be incorporated with the introduction of new technologies. This model could have saved the situation at IBM during the revolutionalization of the internet. This shows that new skills are key in the development of business, but they have to be accompanied by the necessary resources. The managers of change must always be ready to address the issues that arise by introducing changes in a process (Anderson & Ackerman-Anderson, 2010). Some changes, like depicted in Kodak, demands that some employees must be laid-off. This is because the advancement in technology comes with less physical labor. Therefore, managers should prepare employees in advance to prevent any resentment that may lead to loss of business. Organizations will always face external pressures especially from their customers to modify or diversify their products. This takes place in a very competitive international business environment. However, businesses should be careful not to be too ambitious in their expansion strategies as experienced at McDonald’s. Business strategies should be modest, not the ones to spit businesses out of the market (Anderson & Ackerman-Anderson, 2010).
In most cases, organizational changes are attributed to the managers or the top management in an institution (Pitts, 2006). Therefore, some managers are such change oriented that they leave no stone unturned until their efforts bear fruit. For instance, at the Hewlett-Packard and Compaq Computer Corporation, the top managements in the two companies were determined to the merger that they had to undergo tough opposition by some of the outstanding stakeholders in the two companies. For the merging to succeed, it cost Fiorina some bad reputation for that matter. At IBM, John Patrick and David Grossman had to exert a lot of pressure in explaining their superiors and juniors on the advantage of adopting the internet. It took the efforts of Abby Kohnstamm and her colleagues in the marketing department to hoister the proposal and present it to the fellow management team (Palmer, Dunford & Akin, 2009). At a meeting with investors to the company, Kodak CEO, David A. Carp explained that, at the wake of new technological advancements, costs will be reduced, and the company will compete effectively in the market. Carp represented a generational change that will affect the company both positively and negatively. However, technological change is inevitable and with his efforts had to be a success (Amerman, 2008). Some organizational changes come as a result of external pressures. At McDonalds, users of its products needed quality and variety that forced the management to experiment and implement some strategies that would satisfy their customers. It is these strategies that placed the company at a higher ground reflecting management of change (Anderson & Ackerman-Anderson, 2010).
Organizational change is a comprehensive process that affects every stakeholder in an institution. Ownership is a change management principle that ought to be embraced by any management that is introducing changes in its processes (Jones, DeAnne & Calderone, 2004). In this, change belongs to everyone from the junior staff to the CEO. In the change stories at Hewlett-Packard, IBM, Kodak, and McDonald’s, managers had to claim ownership for introducing the changes proposed in their areas of influence. Here, a manager personalizes a change and then communicates the same to the other parties concerned. They then involve these parties in determining potential problems and possible solutions. To do this, the staff is reinforced by rewards and incentives for their contribution. This involves both psychological and financial compensation. This is an exclusive strategy that could have been implemented by managers in these companies to manage change effectively. All together, change is inevitable for the advancement and growth of an organization (Jones, DeAnne & Calderone, 2004).
Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach. Boston: McGraw-Hill Irwin.
Jones John, Aguirre DeAnne, and Calderone Matthew (15 April 2004). 10 Principles of Change Management. Strategy + Business. N.p. Web accessed 23 January 2014. <http://www.strategy-business.com/article/rr00006?pg=all>.
Yaeger, T. F., & Sorensen, P. F. (2009). Strategic organization development: Managing change for success. Charlotte, N.C: Information Age Pub.
Pitts, D. (01 January 2006). Modeling the Impact of Diversity Management. Review of Public Personnel Administration, 26(3), 245-268. Retrieved, 23 January 2014. <http://aysps.gsu.edu/publications/2006/downloads/Pitts_ModelingImpactDiversityMgmt.pdf>.
Amerman, D. R. (17 September 2008). AIG’s Dangerous Collapse & A Credit Derivatives Risk Primer. Financial Sense Archive. Web accessed 23 January 2014. <http://www.financialsense.com/fsu/editorials/amerman/2008/0917.html>.
Anderson, D., & Ackerman-Anderson, L. S. (2010). Beyond change management: How to achieve breakthrough results through conscious change leadership. San Francisso: Pfeiffer.