Case Study On IBM Regarding Leading And Managing Change (Case Study Sample)

IBM CASE STUDY: LEADING AND MANAGING CHANGE
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IBM Case study: Leading and Managing Change
Summary
Between 1992 and 2002, IBM went through immense transformation and organizational change. The man largely responsible for this change is Lou Gerstner who was the CEO of the company at this point in time. Gerstner was company of IBM between 1993 and 2002 and in this period of time, he instigated organizational change that propelled the company to its present day success. When Louis Gerstner became CEO of IBM, he perceived one of his fundamental responsibilities as developing the organization’s tradition determinedly founded in a philosophy that placed diversity as the channel between the workplace and the marketplace. Gerstner considered this philosophy to be vital in IBM’s capacity to win the battle for international talent and success in a global marketplace. However, it is imperative to note that to attain this level of success, Gerstner did experience a great deal of resistance within the company, which he had to work hard to overcome. Two change management theories can explain this accomplishment, which include Lewin’s 3 step model and Kotter’s Eight Step Model. With respect to Lewin’s model, Gerstner ascertained organizational culture issues and diminished the responsible forces that were hampering the company by influencing the IBM staff. Secondly, Gerstner enacted eight principles that he considered ought to be the underpinnings of the new culture at IBM and also heartened the staff to have open communication by supporting debate and individual inventiveness and eradicating the all-encompassing use of transparencies in the course of meetings. Lastly, in the course of his period as CEO, Gerstner enacted eight principles that he considered ought to be the underpinnings of the new culture at IBM and also heartened the staff to have open communication by supporting debate and individual inventiveness and eradicating the all-encompassing use of transparencies in the course of meetings.
Introduction
In the contemporary, IBM is one of the major leading corporations in the world. Not only is it the leading the company in the computer industry but it is also the most renowned companies in the chip and hardware companies across the globe. However, it is imperative to note that this was never the case. A great deal of the company’s success is owned to Louis Gerstner who championed the company through one of the most transformational periods across time. Louis Gerstner became Chief Executive Officer (CEO) of International Business Machines Corporation (IBM) in the year 1993. By the time Louis Gerstner came to be CEO of IBM, the company was going through a rough patch and was deemed to be the most difficult job in corporate America. Louis Gerstner is well renowned for the playing the fundamental role of invigorating the ailing IMB during that period (Bauer and Erdogan, 2014).
Cultural Web Diagram for IBM
Theories of Overcoming Resistance to Organizational Change at IBM
As is known, change is an inevitable aspect. However, imperatively, change is not an easy undertaking. Handling change within the organization is a key problem for all parties. Some of the renowned change leaders, including Lou Gerstner while at IBM faced a great deal of challenges in the form of organizational change resistance that had to be overcome. Resistance to insistent and forceful organizational change is inexorable for the reason that individuals are asked to reassess and adjust their behavior, which raises resistance. In particular, this resistance purposes to sustain stability up until the reasons for chance are not only sensible but also convincing (Henry, 1997). The common sources of resistance to change within the organization consist of loss of control, fear of the unknown, interrupted habits, lack of purpose, work overload, as well as loss of confidence (Schermerhorn, Hunt, & Osborn, 2005). There are various theories that might shed light on and elucidate the steps that Gerstner might have undertaken to help in overcoming resistance to change within IBM.
Lewin’s 3-Stage Model of Change
One of the theories that can explain Gerstner’s ability to overcome resistance when he took the helm at IBM is Lewin’s 3-Stage Model of Change. In particular, Kurt Lewin established and advanced a change model that encompassed three phases including unfreezing, changing and refreezing. In accordance to Lewin, the change process takes into account the formation of the standpoint and perspective that a change is necessitated, then shifting toward the new, sought after level of behavior and ultimately, setting and insisting on such new behavior as the norm (Maltbia and Power, 2009).
The first step of the model is unfreezing. Prior to the execution and carrying out of change, an organization has to go through the initial phase of unfreezing. Owing to the reason that several individuals will automatically and by design resist change, the objective of this phase is to generate cognizance of the manner in which the existing state of affairs or prevailing level of suitability, is encumbering the organization in some way or manner. Ancient manners, ways of thinking, practices, individuals and organizational structures all need to be prudently scrutinized to demonstrate to personnel the vital necessity for a change within the organization to generate or preserve a competitive edge in the industry. In the case of IBM, with respect to the unfreeze phase of the model, Gerstner ascertained organizational culture issues and diminished the responsible forces that were hampering the company by influencing the IBM staff. Immediate upon his arrival at IBM, Gerstner promptly detected an urgency to transform and change the sect-like culture at IBM. Gerstner managed to learn the company’s culture solely by existing in it, gaining experience on what it implied and distinguishing the response when he carried out his will on it. This is the manner in which Gerstner gathered his data and information and initially ascertained the several issues within the organization (Maltbia and Power, 2009).
The second phase is the changing phase also referred to as movement. In accordance to the model, Lewis acknowledged that change is a progression where the organization has to undergo changeover or evolve into a new state of being. This phase is discernable by the execution of change and is at the point where the change comes to be material. Consequently, this is also the phase where resistance becomes visible and occurs owing to most individuals within the organization experiencing difficulties in comping with new reality. It is marred by substantial ambiguity and fear, which makes it quite challenging to overcome. In the IBM case, Gerstner transformed and executed policies within the organization. For instance, the CEO eliminated and obliterated the stiff dress code of the company, motivating personnel to enhance performance by revealing to them pictures of contending business leaders and conveyed critical comments that they remarked about IBM. In addition Gerstner enacted eight principles that he considered ought to be the underpinnings of the new culture at IBM and also heartened the staff to have open communication by supporting debate and individual inventiveness and eradicating the all-encompassing use of transparencies in the course of meetings (Alvesson and Sveningsson, 2015).
The third phase is knowns as the refreezing to represent and signify the action of reinforcing, steadying and setting the new state subsequent to the change. The transformation made to the processes within the organization, objectives, structure, products or individuals are espoused and refrozen as the new standard or present circumstances. In accordance to Lewin, this phase is particularly significant to make sure that individuals do not go back to their preceding habits, perspectives or undertaking before the execution of the change. Considerable efforts have to be undertaken to make ascertain the change does not get lost but is instead embedded into the culture of the organization and sustained as the fitting manner of thinking. With respect to this phase, Gerstner initially supposed that executing a complete culture change within IBM would take approximately five years. Ultimately, it really took Gerstner ten years to effectually execute change within IBM. In the course of these years, he renovated the staff of IBM to the new changes within the company and upturned the decline that IBM was facing (Alvesson and Sveningsson, 2015).
Kotter’s 8 Steps Model
John Kotter’s eight-step process is formulated to be employed at the strategic level of an organization to not only change the prevailing vision but also successively transform the organization. The first step of the model is the creation of a sense of urgency for the reason that in order for change to take place, it becomes much easier if the entire organization yearns for it and understands its necessity. This is imperative because if the staff do not share the same urgency then this generates resistance to change. Towards the end of 1993, Lou Gerstner held a meeting will all CIOs at IBM to proclaim that his intention was not to disintegrate the organization but rather rebuild it with the suggestions of its major consumers. In turn Gerstner lay the foundation and this acted as an encouragement to the personnel instead of instigating fear (Leganes, 2009).
The second phase is the formation of a potent coalition. Making conviction to that change within the organization is vital. More often than not necessitates strong leadership and perceptible support from key individuals within the organization. Therefore, to instigate change, there is need to create a team of influential individuals whose superiority...