Organizational Transformation and Strategic Change Management Practices of IBM

Assessment One: Analytical Organizational Transformation and Change Paper
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Section One (LO1): Analytical Organizational Transformation and Change Paper
Difference between Change and Transformation
Organizational change connotes actions taken towards changing an organisation’s underlying components that entail a change in culture, processes, and new strategies. It entails the assessment of the past and present with the focus of evaluating the future ideal state of the business from the current state. On the other hand, transformation redefines the organisation’s current state through assessment of the present in relation to the desired future. Such an evaluation is usually based on the initial vision, mission, and organisational strategy’s defining attributes (Waddell et al., 2019).
Concept of Organizational Change and Types of Changes
Organisational change provides a spectrum capable of measuring change being undertaken by the organisation (Bigdeli et al., 2017). The spectrum comprises adaptive and transformational change on both ends. The changes in culture require daily adjustments that help the organisation adapt to the various routine challenges that threaten communication channels. New strategies are always the responsibility of managers and require gradual implementation from the managers. Implementing new processes occurs in the form of product fine-tuning that fundamentally does not change the whole organisation. On the other hand, transformational change represents wider changes in scope compared to adaptive changes. In most instances, transformative change entails the dramatic evolution of basic business structures such as new culture, infrastructure, and processes.
Theoretical Approaches to Change
Lewin’s Change Theory
The Lewin’s Change Model was the idea of Kurt Lewin, who created the theory in 1950s. The theory presents one of the commonly used models that ensures a detailed understanding of organisational as well as structured change. This theory explains organisational change through various changing states of an ice block. The various stages of change, in this case, entail unfreezing, change, and refreezing. The unfreezing state depicts the organisational preparation process towards embracing change. The process helps in dealing with the status quo of individuals that may resist change. Then the change state represents the real transition process that involves time and resources (Burnes et al., 2018). Then finally, the refreezing state that marks the regaining of organisational stability.
McKinsey 7 S Model
This model was developed by Mckinsey & Company in the 1980s and presented seven stages towards the management of change. These stages as stated include aspects of strategy, various aspects of structure as well as shared values, systems as well as style, skills and finally staff. The model argues that one way to understand the organisation entails gaining deep insight into its working processes. The model integrates emotional as well as practical perspectives of change that ensure employees’ adaptation towards transition. In this case, individuals are considered to be more objective since they are not bound by the system they seek to change. The bottom line is that despite having the organisation, the organisation itself does not own anybody.
Kotter’s Change Management Theory
John Kotter, a Harvard Professor, devised the theory. Kotter divided the theory into eight stages, focusing on key principles associated with various people’s responses towards change. The model supports the aspect of accepting and preparing for change. The various stages include increasing urgency, building teamwork, understanding the vision, driving change, focusing on short-term goals, enduring the journey, and finally incorporating change (Burnes et al., 2018).
ADKAR (Awareness, Desire, Knowledge, Ability, Reinforcement) Model
This model is goal-oriented and focuses on the possibility of the different change management teams focusing directly on the objectives of the process. The results of this model are considered cumulative and appear in sequence. However, the model requires that the results of the idea should appear in an orderly fashion for sustenance purposes. The ADKAR model proves useful to managers when it comes to identifying various gaps that exist in the process of change management, hence ensuring effective training to employees (Burnes et al., 2018).
Factors Driving Change (Forces for Change)
The aspect of navigating through the various cycle of change provides any organisation with a good platform for success. The various forces that drive change are either external or internal forces. Some of the external forces for change include customer preferences, technological innovations, competitor moves, various business regulations, and sourcing instability, amongst others (Bigdeli, 2017). On the other hand, the internal forces for change ensure that organisations adopt different work approaches by pushing them out of their comfort zones. The internal forces include but are not limited to rolling out new policies, the introduction of new products, and hiring a new executive.
Need for Change
There is always a need for change in organisations in the event that the organisation encounters a crisis. The change process is essential in the rectification of some processes as well as activities that could have otherwise become dormant. Implementing changes ensures that solutions are provided for ineffective processes, ensuring that the organisation withstands turbulent times (Bigdeli, 2017). Evidently, such new changes in an organisation help when it comes to the successful adoption of new strategies. However, the employees are required to understand the new changes to necessitate their commitment levels.
Roles in Organizational Change Process
A properly structured organisation change process requires the performance of some essential roles. First, the process requires the involvement of a change team responsible for the change project implementation. The roles require the involvement of a change team that includes employees, technicians, and implementers. This team helps in managing the technical aspects of change while coordinating and managing the process on the ground.
Secondly, there is the support team that provides specialised expertise as well as resources necessary for the change process. The roles require the presence of trainers as well as subject matter experts. The support team provides much-needed guidance and knowledge that help in the project planning process as well as providing tools and necessary techniques. Thirdly, the change management team provides the overall management of the change process that entails people as well as resources. The team helps in designing a required strategy that is essential in handling daily operations for change.
Critical Aspects of Impact
The change process helps in establishing a clear way towards success. However, the challenge comes in the identification of appropriate resources that help support and drive the process that entails tools and funding. The impact of the change process requires clarification of intentions for the purposes of understanding the improvement process. The various critical aspects of impact entail critical behaviours, systems, beliefs, compensation, location, and performance reviews (Bigdeli, 2017). The impact influences various sectors within the organisation and, in most instances, may result in employee shock, especially when not adequately trained on the new processes. At times, it leads to the recruitment of new personnel with appropriate knowledge. The organisation is also affected in terms of resources because the new change may come with additional costs.
IBM’s Orientation to Change
The company’s inclination was more into hardware and maintenance as opposed to the information technology industry (Bivins, 2014). First, the company had to make a shift in its business portfolio from hardware towards the provision of software services. Secondly, there was a change in vision and framework to reflect Kotter’s model, and this also necessitated a total change in employee structure. The executives were familiar with industry problems, which made it easier for the employees to buy into their strategic changes. The company selected top achievers to handle the change process. The communication process as per Kotter’s model proved key to adaptation of the changes. The strategies reflected the matrixed organisational system that entails functional processes as well as project delivery. There was a complete definition and description of individual employee levels alongside performance plans.
The Impact on the Organization
There was growth in revenue from $ 64.5 billion in 1992 to $ 107 billion in 2011. There was an increase in revenue as pertains the service solutions with growth in pre-tax income from software services provided by the company (Bivins, 2014). The significant shift in employee perspective, including the revenue that resulted from the shift, was eminent.
Section Two (LO 2): Relevant Theories and Concepts that Best Illustrate the Dynamics of Strategy and Change in IBM
Concept of Strategy
Teece (2018) asserts that organizational strategy depicts the various actions that an organization undertakes to achieve long-term goals. In this case, the creation of the overall strategy lies with the executive management, with the middle and lower management implementing the step-by-step strategy process towards achieving the set objectives. IBM operations within the computing market required a strategic approach for the appropriate actualization of their technological investment. The company realized that it had focused on the wrong market niche that required the necessary adjustment. In this case, the utilisation of Kotter’s model enabled the company to implement change management through the creation of a top-tier task force. The task force had specialised knowledge concerning specific areas of change (Bivins, 2014). Such a strategy enables easy communication of the designed vision and processes to the respective task roles. On the other hand, the utilization of the matrixed model helped IBM to introduce the functional branches of the company. Such a change model influenced the project delivery process, whereby appropriate skills and solutions are applicable. The company’s strategy entails the aspect of combining global expansion together with an increase in outsourcing. Such lowering of production costs helps in the optimisation of profit margins due to improved stability.
Relationship between Strategy and Change
The concept of strategy and change are interdependent within an organizational set-up. In this case, formulation of quality strategies determines the level of efficiency on change implementation in an organization. The strategy process adopted by IBM for business competitiveness relates to Kotter’s model. Kotter’s Model influences change through various stages such as team building and a thorough understanding of the vision that drives change. The various company strategies work on the premise of organisational strengths that correspond to competitive advantages that solve weaknesses and threats. For instance, the matrixed organisation system that IBM adopted helped when it came to the exploitation of opportunities within the computing business environment. Further, the IBM’s strategy on diversifying their production portfolio reduced various non-profitable business processes (Bivins, 2014).
The idea of using cost leadership as a competitive strategy reflected Porter’s (1980) idea on generic competitive approaches where cost leadership is a factor. IBM’s idea of incorporating cost leadership as s strategy towards driving change, helped in consolidating the customer base as well as diversification of technological innovativeness. Such idea supports the competitive advantage process through the application of cost-effectiveness within company’s operations. The objective is to reduce the cost of production where the cost differences enable IBM to reduce the selling prices of products, making them more attractive to the target population (Bigdeli, 2017).
Strategic Change Management Practices and Organizational Performance
IBM’s strategic change management process involved changing the various functional teams to create virtual project teams (Bivins, 2014). At the centre of the project revolution were the portfolio managers that utilised the opportunities. The process allowed for the movement of high-skilled individuals to their matching areas of expertise. Consequently, there was realisation of improved results due to higher customer satisfaction records (Gingerich, 2012). However, in the current situation, the company focuses on the application of cost leadership as its competitive strategy. In this case, there is no limitation of IBM products to businesses as the target customers.
Communication for Strategy and Change
Communication in organisational change should reflect a better thinking capacity, involvement of right people, listening to feedback, answering questions, and preparing for resistance. The creation of detailed planning from employee to customer made it possible to break down the process into executable levels easily understood by stakeholders. In the case of IBM, the process reflected Kotter’s model that saw the application of high leadership and communication skills from the core management team that designed the vision (Bivins, 2014). Due to the respect that the task force commanded from the other employees, the aspect of communicating the strategy and buying-in became easy. The business leadership and managers’ role that comprises the executive management team provides the necessary leadership towards chan...