Change Management Plan for IBM - Essay Example

?Business Management IBM, an international company for computer, hardware and software services is involved in this case with a managerial perspective to address some key issues and challenges. In the early 1980s, the company faced huge losses and a major decline in its market share after the advent of personal computers. Louis V. Gerstner is brought in to resolve the issues and bring the company back on the top of the industry. Here are a few recommendations to Gerstner for the implementation of a change process. Change Management Plan for IBM: In my view, there is an urgent need to implement, communicate and measure a change management plan as IBM requires a great change. This change should come in different forms such as strategic, structural, cultural, process oriented and people oriented. The use of soft and hard approaches to change can be useful in this regard. As the power of the regional heads is one of the major obstacles in bringing change, Gerstner needs to define the company’s objectives and the relative course of action to meet the desired goals. On the other hand, he needs to empower the junior staff with decision making capabilities and innovation in order to create more value and discover more efficient ways of implementing the change process. A participative style of leadership would be appropriate to handle the current situation at IBM. This will allow the employees to analyze a given situation and come up with solutions regarding what to do and how to do it. Gerstner should critically understand and assess the culture and behaviours at each level of IBM. This will help in identifying the core values, attitudes, assumptions and perception of the employees that are essential for the successful change to occur. It will serve as a common baseline for developing the elements of change such as the new corporate strategy, infrastructure and programs to drive change. The implementation of the change process should be followed with the direction of business plans and tactics to meet the customer needs and competition. A continuous reassessment of the organization’s ability to move towards a new wave of transformation is necessary. Soft Approach with the employees: Coetsee (1999) states "any management's ability to achieve maximum benefits from change depends in part of how effectively they create and maintain a climate that minimizes resistant behavior and encourages acceptance and support" (p. 205). This means that Gerstner along with the management of IBM should choose the democratic leadership style as it offers a great deal of flexibility to handle a range of situations. In this way, ideas will move freely amongst the group and discussion will be relatively free-flowing. This will facilitate the conversation with the employees and will encourage them to share their ideas and synthesize the available information in the best possible way. It will capitalize their skills and talents by increasing their involvement in decision making activities coupled with new concepts and opinions. At present, the authoritarian atmosphere of the regional heads and other senior management uses the downward or vertical flow of communication to direct the managers and their subordinates. This is suitable in order to tackle such situations where the employees have less knowledge or have no sense of direction and close supervision is required. According to the present condition, Gerstner should restructure it as a flat organization. This will promote team spirit and better flow of communication among the employees. Change in the organizational culture: The culture of IBM is characterized with low tolerance for change by the involvement of the higher authorities. The degree of formality is high and there are boundaries to separate the top from the ground. Thus, new activities and processes will be very difficult to implement if these characteristics don’t mesh with the culture. Gerstner must use a collective approach to define the ‘shared meaning or purpose’ in order to achieve the common goals. The senior management should realize the fact that they will be more productive as a whole than in parts. The top management should establish highly trained change teams to utilize their full potential and power to be a hard hitting model of change process. In this way, employees will consider this change as positive opportunities rather than unpleasant or forced necessities. High involvement of all the members is essential for the change process as it requires constant interaction between the thinking processes and actions. This will create new links for all the participants since the inception of the cultural change. Strategy - Customer centric Approach: IBM should be more customers oriented by modifying the products and services according to the level of customer sophistication in different countries. This strategy has worked well for Toyota Company and pushed their business to overseas markets. They must develop new technologies; new ways of marketing by keeping in mind the preferences of the customers in a particular region. They must capture customer insights to create a product or service. The research and development department should work harder to understand the consumer behaviour. The production team should experiment to taking smaller but continuous steps towards innovation. Bigger goals should be break down into manageable challenges. This will provide many learning opportunities from the consequent successes and failures. Kotter’s Change Model: In order to implement and lead a change process, Kotter’s eight stages can be useful for long term benefits. 1. Need for change: This is the first stage in the change process. All the employees of IBM including the top management should realize the importance of need. The executives must determine the potential threats and develop scenarios that can be seen as future opportunities. Gerstner should start honest discussions with the higher officials. He must use dynamic and convincing reasons to get the commitment of the top management regarding the change. 2. Form a coalition: At this stage, Gerstner should identify the true leaders in the organization. This is necessary because strong leadership and a clear vision are necessary to implement change. The management and all the other members should join together as a team to build momentum around the change movement. 3. Create a vision for change: A detailed review of the vision and mission statement should be done in order to remould them according to the change process. The management should incorporate those values and beliefs that are central to the change. 4. Communicate the vision: It is the responsibility of the management and supervisors to effectively communicate the change. This could be done by delegating different tasks to every department which at the end will help in achieving the main corporate vision/goal of the company. 5. Empower other to act on the vision: Changes always face obstacles. It might be possible that employees will not respond to the proposed changes. They must encourage employees to conceptualize new ideas and opinions which are fruitful for the progress of the organization. The management should understand the needs of the employees in order to use them as sources of motivation such as compensation packages can be helpful in this regard. 6. Short term incentives: The efforts of the employees should be treated and rewarded in order to continue the change process. This will make the employees more committed and loyal to the company’s goal and objectives. Bonuses should be given for higher production as it will generate positive emotional and intellectual reactions from the employees. 7. Consolidate improvements and procedure more change Kotter argues that by informing about the victory in the beginning is the end towards transformation. Gerstner should make the employees so competitive that they should come up with innovative ideas at all times. They should not get relax after the accomplishment of a single task. But it should be viewed as a continuous learning process. He must monitor performance of employees and business to ensure new vision is successful. They must then identify these achievements and ensure that these changes continue to be implemented. If vision is not successful then they must alter to help it succeed. 8. Institutionalize new approaches: These change approaches should be integrated within the organization at all levels to make it a principle or role of thumb. Such as when hiring new employees, success stories and their way of doing things should be well informed to the new employee in order to share the same goal. The efforts of the individuals should be recognized publicly so that the old and new employees get motivated and also pay due respect to their contributions. People resistance to change: To make a change requires determination and a kind of leap of faith to move towards a new direction. Whether the change is major or minor, people finds reasons to resist change. In this highly competitive world, the changes in economy and business environment have forced many organizations to change their ‘way of doing things’. However, in most of the organizations, advocates of change are not encouraged and viewed as unfavourable by the people with charge. This results in the breakdown of dialog between the change agents and the people whose primary objective is to maintain the status quo. Here are a few reasons as to why people resist change particularly in workplaces: Misunderstanding about the change: It has been observed that the difference in responses must reflect either misunderstandings about the change, or individual characteristics and attributes that are “in the way” of the change. Accordingly, resistance is objectified as a socio-psychological phenomenon that exists “over there” “in the individual” (Dent & Goldberg, 1999). This means that resistance can be dealt successfully by accurately presenting or conveying the message of change or by choosing the appropriate strategies for its implementation. Fear of Failure: One of the root causes to resist change is fear. This is the biggest reason to resistance and creates paralysis. During periods of change, most of the people try to stick with the past in order to predict the results and to feel more secure. They will not be able to achieve the anticipated results and their potentials can come into question. For instance, most of the employees are afraid to lose their job, self-respect or opportunity if they fail in managing the new change. People think that the risk of standing still is less than the risk of conducting a change. This is due to higher involvement of risk and low prediction of the outcomes. They think that this change will not bring any improvement because the current situation is somewhat satisfactory. They fail to understand the importance of competitive edge that every organization requires in order to stay and survive in the market. Thus, they wish to maintain the business as usual with no modifications or advancements. Habitual: It is more comfortable to do the things in the same routine. This means that people resist change because they don’t want to think or operate in a different manner. They don’t want to come out of their comfort zones and make a difference. When people have good things coming, they are reluctant to give up those things. They don’t realize the importance of the required change and try to go with the flow. Not perceiving a need: People done realize that a change is necessary when things are on the right track. It only comes into play when a relatively worst situation occurs and people are left with only one option i.e. the change process. In many cases, employees only view the change from their own perspective. If the existing practices or outcomes have no impact on their jobs, then a change is not required. They don’t look into the big picture and the positive impacts than can occur to the whole organization. Thus, they may find the change unnecessary and disruptive. Loss of power: It is obvious that some people will gain more status, job security and power due to the proposed change. People having the higher authority will view the change contrary to their interests as they will have a chance to lose their status or position. They fear the feeling of being powerless. This is the reason why higher management is resistant to change and requires special efforts to implement it on a broader level. Concern about the support system/ structural change: In predictable situations, people are familiar with support system such as the supervisors and other coworkers who will back them in their challenging times. When a change takes place, people may worry about working with a new head or supervisor, with new employees and with new projects that might result in a failure. They fear that they will have no more support and may result in unfavourable outcomes such as layoffs. Close mindedness: people particularly employees have the attitude to cling to the existing methods of doing things. They make up their mind accordingly and get confuse when informed about a supporting changes in a positive manner and refuse to move in the new direction. Unwillingness to learn and adapt to new situations: People are hesitant to try new routines and experiment with their learning. They think they already have the information they need to know. De Jag er (2001) argues, 'Most people are reluctant to leave the familiar behind. We are all suspicious about the unfamiliar; we are naturally concerned about how we will get from the old to the new, especially if it involves learning something new and risking failure" (p. 24).They act as an impediment for the organization by being reluctant to learn something new which can be productive and a driver of success. This also hinders the personal growth and development of the individuals as they don’t meet the demands of this rapidly growing world. Fear of personal impact: Most of the people associate the need of change by asking themselves such questions: How will the change be beneficial to them directly? Will this result in the ease or difficulty of the job? Will this change put their job security into jeopardy? Will this change requires a new learning? If all these questions are favourable to the interests of the people then they will be the active participants of change. But if this change is more inclined towards discomfort of their personal interests then they will place roadblocks in the change movement. Fear of unknown: Generally, people are not aware of the results of the change process. Due to this fact, they are more resistant or anti- change. According to a survey, only 66.5% of the employees said that they are kept well-informed and involved regarding change activities in their organizations. They don’t know much about the specifics of changes. These employees acknowledge that a problem exists and can be resolved by the change. However, they also worry about the proposed results of the change that can worsen the situation. Leadership style of change agents: This is very important in making the change effective. If a leader uses autocratic style of leadership then he/she will likely face numerous problems in making change as people are forced or pushed too hard which make the situation more worst. However, a transformational style of leadership can be useful where people are led into change. Fear of hidden agendas: People also consider the change movement as a means of following a secret agenda. For instance, if a supervisor is looking after the change program, then its employees might suspect this as a way of increasing his own rank or position in the organizational hierarchy and can result in the resentment of the established order. Resistance and Organizational Success: As change has become a part and parcel of our daily lives, resistant to change can be a disadvantage to the organization’s success. In my opinion, change is the need of human behaviour and people don’t resist changing. It is the apprehension, discomfort or fear attached to the organizational change. Therefore, in order to lessen the impact of these feelings people convince themselves about not to participate in the change. Another important aspect of resistant is that it is not the stage or outcome of change. It is a symptom of an unexpected or unresolved problem that persists in human attitudes, behaviours and opinions. In successful organizations, change is important and managers continuously deal with new government regulations, new products, new policies, technological developments and changing workforces to face the increased competition. There are a few conclusions that must be kept in mind before linking resistant to organizational change: An organization should be ready for change at all times. The managers should understand this fact that people will more likely to resist change if they have a disagreement on the causes of the current problems or the reason for change. The mindset of the employees should be changed as it is the hurdle in reinforcing change. Unfortunately, in most of the cases, implementation of a change is not a smooth process. Managers need to recognize the source of this resistance which hampers the growth of the organization. The individual resistance of the employees is very easy to identify as most of the employees get worried about the negative impact of the change. The insecurity that individuals feel regarding organizational change can manifest itself in increased absenteeism and employee churn. In extreme cases, individuals may take steps to prevent the change from occurring (George & Jones, 2008). Similarly, groups within the organization can also resist change. In reaction to the proposed, they disrupt the normal operations of the company and create problems to reduce its effectiveness. There are many instances where the organization as a whole resists change. The change may lead to the change in the power structure and the resulting fight between the losing and the gaining parties leads to the company’s stagnation towards the required change. Thus, in order to effect change the leader should make the forces of change so strong that they overcome the forces of resistance. An evolutionary change should be followed to make it easier for the employees to absorb change. Minute alterations should be made to alter the organization without any resentment by the employees or the higher authorities. This is contrary to the revolutionary change which is disruptive and more likely to result in resistance (George & Jones, 2008). It can be concluded from the above discussion that resistance is an inevitable response that can cripple an organization’s success. Bhutan (1995) says: "There is always the danger of identifying symptom of resistance when you are really looking for its cause. To diagnose the causes, we must understand a person's state of mind. Managers must clearly communicate the change process by being direct and honest to the employees. It is obvious that not every change can benefit the employees as much as the stakeholders. They must equip the employees with the necessary skills to handle the upcoming challenges. The senior management should set an exemplary behavior and demonstrate success in order to get the full support of the change process. In order to discover new horizons of success, the company should find such employees who can serve as champions to the implementation of the change program. This is the era of globalization with demographic and geographic shifts and the emergence of new markets in every industry. Only the organizations who can quickly adapt change will be able to reap the greatest rewards. Bibliography Kinicki, A & Kreitner, R., 2009. Organizational Behaviour: key concepts, skills & best practices, 3rd ed., Tata McGraw- Hill Harvey, T.R. & Broyles, E.A., 2010. Resistance to Change: A guide to harnessing its positive power, Rowman & Littlefield Education. Hajek, J., 2010. 8 Reasons People Resist Change [Online] (Updated 2nd February 2010) Available at: http://www.velaction.com/8-reasons-people-resist-change/ (Accessed 15th April 2010). Singh. K., 2010. Organizational Behaviour: Text and Cases, Pearson Education Inc. John. J, Aguirre. D & Calderone.M., 2004. 10 Principles of Change Management [Online] (Updated 4th April 2004) Available at: http://www.strategy-business.com/article/rr00006?pg=0 (Accessed 15th April 2010) Read More