Organizational Change: A Case Study of IBM

This article discusses the organizational change in IBM through a case study. It identifies the different change options available for Gestner, the appointed chairman of IBM in 1993. The article also discusses the implementation of change through diverse models, including Lewin’s change management model and Kotter’s change management model. The subject is organizational change, and the course code and college/university are not mentioned.

Running head: ORGANIZATIONAL CHANGE
ORGANIZATIONAL CHANGE
Name of the student
Name of the university
Author note

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Table of Contents
Part 1................................................................................................................................................2
1.1 Introduction............................................................................................................................2
1.2 Background of IBM before Gestner......................................................................................3
1.3 Definition of the needs of including the Kaleidoscope.........................................................4
1.4 Kaleidoscope change chart in accordance with the change in IBM......................................4
Part 2................................................................................................................................................9
2.1 Introduction............................................................................................................................9
2.2 Implementation of change through diverse models.............................................................10
2.2.1 Lewin’s change management model............................................................................10
2.2.2 Kotter’s change management model............................................................................12
2.2.3 Conclusion............................................................................................................................14
References......................................................................................................................................16

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Part 1
1.1 Introduction
Changes in the organizational context refer to different internal and external
modifications that are implemented by the firms on the processes and the culture of the same.
The purpose of undertaking the discussion is to identify the different change options that were
available for Gestner, the appointed chairman of IBM in 1993. The discussion will be making us
of the Kaleidoscope model by Balogun and Hope-Hailey in order to identify the different
available options for undertaking most viable change in the organizational outset. The discussion
contrasts the situation of the organization before Gestner was appointed with the situation after
his appointment.
1.2 Background of IBM before Gestner
The concerned organization, IBM, was originally formed as a Computing Tabulating and
Recording manufacturing organization which followed the Japanese management style was
induced by the Ministry of International Trade and Industry. The organization seemed to take
over around 70% of the world market by 1960s. The organization initiated continuous innovation
in the line of highly expensive mainframe computers, peripherals and software products. It has
helped the organization in undertaking its dynamic growth in its business operations.On the other
hand, Waring andSkoumpopoulou (2012) stated that the growth of the business was primarily
based on the lifetime employment policies and excellent working conditions which boosted the
motivation of the workforce.
The organization encountered huge amount of job cuts that expanded through
‘management-initiated-separation’ (MIS). The change that was introduced in the organization

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was due to the needs of the same to cut off costs, which reduced the profits of the firm. On the
other hand, the change maximized the turnover rates of the business thereby affecting the
productivity of the same as per the objectives.
1.3Kaleidoscope change chart in accordance with the change in IBM
The change that was brought about by Louis Vincent Gestner in IBM was based on the
suitable identification of the issues that were faced by the business. The change that was
primarily undertaken by Gestner was dependent on the definition of the core objectives of the
business sustainability. It has helped the management in focusing on its common goal of
maintaining the sustainability through assessment of capabilities, scope and readiness among the
workforce (Waringand Skoumpopoulou2012). On the other hand, the decentralization of
thedecision making process of the IBM’s management will be helping the same in preserving the
diverse culture through utilization of transformational leadership style. It will be helping the
organization in enhancing the productivity of the same through encouraging the active
participation of the employees.
Gestner aimed at maximizing the staff reductions in order to cut off the costs that were
undertaken by the organization through payrolls and compensations. However, he could have
taken steps to build on the efficacy at team work through motivation. Drzensky, Egold and van
Dick (2012) stated that the productivity of businesses depends on the efficient functioning of the
workforce while operating on the diverse set of objectives. On the other hand, continuous
innovation in the processes of the business would have helped the management in enhancing its
productivity (Bouckenooghe 2012). Alvesson andSveningsson (2015) stated that the changes in
the organizational context is based on the time that is utilized by the management in reviewing
and assessing the outcome of the modifications. Therefore, the different changes in the

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Organizational change
Power Time
Capability
Capacity
Diversity Preservation
ScopeReadiness
Design choice
Change path
Change point
Change style
Change interventions
Change roles
organizational context are based on the assessment of the capabilities of the same while
operating in diverse international markets.
Figure 1: Kaleidoscope model
(Source: Author)
Elements of the kaleidoscope Explanation Enabler
(+)
Neutral
(N)

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Constraint
(-)
Power The power of undertaking the change is based on the
collaborative functioning of the management of the
organization and the workforce. In this case, Gestner
lacks in the power of undertaking the required
changes in the organizational profile as the business
face huge resistance from the employees and the
other stakeholders relating to the job cuts and
decentralization of the management decision making
systems.
(+)
Time The time is not specified as per the case, which has
helped the CEO in taking decisions on the different
parameters of the change that might be implemented
in the organizational structure. However, suitable
implementation of change in IBM’s processes is
supported through the identification of the time that
might be required by the project developers. It is
noted that the circumstances that are faced by the
organization required speedy decision making
systems in order to facilitate the sustainability of the
same while operating in diverse international
markets. On the other hand, the definite time
required for making the people aware of the change
and inducing the practice is a necessary
(-)

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consideration.
Scope The change that is planned by the organization is
based on the remodelling of the different cultural
elements that influence the decision making systems
of the business. IBM’s CEO planned to undertake a
major transformation of the processes relating to the
decentralization of decision making and dismissal of
the employees. The change will be helping the
organization in enhancing the overall operations of
the same.
N
Capability IBM’s CEO is well aware of the different aspects of
change that is required to be undertaken by the
management in order to enhance the operations.
Therefore, the CEO has planned to implement a
decentralized model of decision making, which will
be helping the management in undertaking efficient
decisions through assessment of the situation faced
by the organization. However, Gestner had limited
knowledge on running a computer business, which
might affect the change processes that are planned
by the same as per the needs of the organization.
Therefore, the limited knowledge of Gestner in
running a computer business might affect the
decision making powers of the same which might
affect the organizational processes. The
competencies that might be faced by the
(+)

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organizational management are based on the limited
knowledge on the technological aspects. It might
affect the proper functioning of the systems of the
business in understanding the specific areas of
change of the same.
Preservation The organization aimed at enhancing the sales
functions of the same while operating as per the
needs of organizational sustenance. The enhanced
productivity of IBM will be helping the organization
in maintaining their competitive edge in the markets.
On the other hand, the continuous innovative culture
of the organization will be helping the same in
maintaining their efficacy while operating in the
diverse international markets. The compounding
sales of the organization will be helping the same in
preserving the activities and thereby add to the
organizational sustainability.
(+)
Diversity The diverse workforce culture of IBM might
constrain the safe implementation of change in the
processes. The different aspects of change in the
organizational functioning are based on the readiness
among the workforce. Interest clashes between the
management and the employees while implementing
the change might affect the smooth functioning of
(-)

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the systems as per the objectives.
Capacity IBM is a multinational; organization with huge funds
and foreign investors which will be helping the CEO
in implementing the change in the business
processes more viably. The key elements of change
in IBM’s context are dependent on the remodelling
of the structure and culture of the enterprise in order
to enhance the functioning of the workforce.
Therefore, the concerned organization is capable of
undertaking the required change in the processes
through the assessment of the capabilities of the
firm.
(+)
Readiness The change that was planned by the CEO of IBM
was properly communicated to the relevant
stakeholders and the employees. It helped the
organization in enhancing the possibilities of change
readiness among the workforce resulting to the
suitable implementation of the modifications in the
business model of IBM.
(+)
Change Path The evolution of IBM as per the market
structure and position of the same is based on
the enumeration of competencies that are faced
by the organization relating to diminishing
profitability and sales margin. The key areas of
(+)

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change that is implemented by the organization
are changes in the employment structures and
the management’s procedures of motivating the
employees.
Change start point IBM’s management undertook a top- down
change where the CEO realized the need for the
modification in the business processes in order
to facilitate the steady growth of profitability of
businesses.
(-)
Change style The CEO implemented the Collaborative
change style while imposing the modifications
in the business model in order to facilitate the
smooth functioning of the operations through
active participation of the employees in the
change process.
(+)
Change intervention The change that is planned by the CEO in
IBM’s business model is based on reviewing the
different cultural elements that are adhered by
the organization while undertaking its smooth
operations. The delineation of power
structures, organizational structures and control
systemshas helped the CEO in devising
different mechanisms inorder to facilitate the
modification in the organizational systems.
(N)
Change roles The change that is planned by the CEO of IBM
is based on developing positive values in order
(+)

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to enhance the operations of the workforce
through modifications in behaviours and
attitudes. On the other hand, the role of the
change that is being planned by the CEO is
based on enhancing the output relating to
maximization of profitability of the same.
Part 2
2.1 Introduction
Change that is implemented by the organizations is dependent on the utilization of
different models. The models of change assist the organizations through critical pathways and
activities for successful implementation of the modification. The section aims at gratifying the
different actions that might be taken by Gestner in order to facilitate modifications in IBM
through the utilization of diverse change management models.

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2.2 Implementation of change through diverse models
2.2.1 Lewin’s change management model
Figure 1: Lewin’s change management model
(Source: Millar, Hind and Magala 2012)
According to Cameron and Green (2015), the change management based concept is
considered to be an important part of the effective operations of modern companies. Kurt
Lewin’s change management model can be used in order to implement the required changes
within the organizations. The case study, which has been analysed, is based on the changes,
which have been implemented by the CEO of IBM in order to improve the profitability based
levels of the company. The employees need to be provided with an understanding of the change
process in order to reduce the levels of resistance provided by them. The CEO had to face high
levels of resistance to the proper implementation of changes, which could have been managed
with the implementation of the following steps,

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Unfreeze – Gestner needs to follow the first step of change management process which is
termed as unfreeze. The major issues, which are faced by the company, need to be identified
effectively in order to start the change process. The major levels of changes which can be
implemented within the organization are related to the culture which will be able to increase the
levels of communication. The cost cutting based process and changes in salary structure based
changes, which were implemented by the CEO needed to be communicated to the employees
(Jayatilleke and Lai 2018).
Change – The second step of Lewin’s change management process is based on the
implementation of changes, which have been planned by Gestner. This step will involve the
implementation new salary structure. The employees had been taken into confidence in the
previous step which will be able to play a major role in the lack of resistance provided by them
to the change process. Gestner will be successful in including the employees in the change based
process in an effective manner. This will be helpful for Gestner to maintain the levels of
profitability of the company and further retain the effective employees (Kuipers et al.
2014).Christensen (2014) stated that the different modifications in the processes and the manner
in which they were implemented affected the productivity of the business. The cultural shifts and
centralized- bureaucratic management structure of the organization affected the organizational
functioning in the early years resulting to poor productivity in 1990’s. Changes in the
organizational structure and processes help in enhancing the efficacy of the workforce and
thereby maximize the productivity. On the other hand, the different changes that are undertaken
by businesses help in enhancing the goodwill of the same in a competitive market scenario.
Thereby the radical changes that were undertaken by the concerned organization have resulted to
different risks that affected the performance of the business as per the objectives.

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Refreeze –The third step of the change process is based on the consequences of the
changes, which have been implemented in the organization. This step will be related to the ways
by which Gestner will be able to manage the operations of the organization effectively after
proper implementation of changes. The case study has suggested that the changes had been
successful in increasing the profitability levels of the company. However, the increasing stress
levels of the employees were a major concern for the proper organizational operations.
Gestnercan reduce the levels of stress with the help of proper inclusion of the employees within
the change- based process (Matos Marques Simoes and Esposito 2014).
As discussed by Jayatilleke and Lai (2018), the implementation of Lewin’s change
management process will thereby prove to be a major step, which will lead to the proper
operations of the company in the industry. The organization will be able to operate in a profitable
manner and the stress levels of employees will also be reduced as they are able to become an
important part of the change implementation process.
2.2.2 Kotter’s change management model
The change management model by Kotter aims at understanding the different viable steps
that might be undertaken by the management of organizations in order to implement
modifications successfully. Chappell et al. (2016) stated that change is based on the plans that
are framed by the management and thereby decide on the most viable alternatives in order to
enhance the scopes of the enterprise. The implementation of Kotter’s change management model
in IBM would have helped Gestner in identifying the urgency that is faced by the business to
bring forth changes in its systems. The definition of the needs of the organization and thereby
supplementing the same through the creation of suitable mission and vision will be helping the

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organization in undertaking long term planning for the growth of the enterprise (Appelbaum et
al. 2015). However, the different changes that were planned by Gestnerwere adequately
communicated to the employees and the other managerial personnel, whichhelped in enhancing
the change operations of the business.
The implementation of the Kotter’s change management model in the modification
process would have helped Gestner in understanding the manner in which communication might
be undertaken by him in order to facilitate the collaborative functioning. Al-Haddad andKotnour
(2015) stated that the collaborative functioning of the management and the workforce will result
to the smooth functioning of the processes through effective communication. Parker et al. (2013)
also noted that the communication with the relevant stakeholders helps organizations in
maintaining their proficiency at work while operating in the diverse competitive markets.
Empowering the workforce and encouraging theirinvolvement in the change process
would have helped IBM’s management in maintaining the efficacy of the change that is planned
by the businesses. Sloan, Klingenberg and Rider (2013) stated that empowering the relevant
stakeholders in the change processes of the business helps in enhancing the operations as per the
common goal of undertaking the modification. IBM’s chairperson Gestnercould have taken steps
to develop different strategies in order to enhance the involvement of the relevant stakeholders
through consultation. It would have helped the management in undertaking concrete decisions as
per the needs of the organizational change.

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Figure 2: Kotter’s change management model
(Source: Kazmi andNaarananoja 2013)
The creation of quick wins is one of the major steps that are undertaken by the
managme4net in order to fulfill the objectives of the same while operating in the diverse markets.
The last phase of the model aimed at Building on the change in the processes has helped the
CEO of IBM in maintaining the proficiency of the functions while operating as per the objectives
of maximizing the profitability of the same. Sticking on to the changewill be helping Gestner in
inducingthe change as an organizational culture.GorranFarkas (2013) stated that implementation
of the change in the processes of the business is the final step that might be taken by the
manage4ment as per the Kotter’s change management model in order to enhance the operations
of the same. Monitoring over the change and learning from the issues that persists while the

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change is implemented in the organizational processes provides the organization with an
opportunity of inducing further modifications in the business processes.The implementation of
Kotter’s change management model in the organizational context will be helping Gestner in
implementing the relevant modifications in a systematic manner.
2.2.3 Conclusion
Therefore, from the above discussion it might be stated that the utilization of different
change management models will be helping Gestner in undertaking possible steps for mitigating
the issues and resistances that are faced by IBM while considering the modifications. On the
other hand, the identification of the models and the implementation of the same in the processes
will be helping the organization in undertaking a systematic review of the steps that might be
undertaken by the firm in order to maximize the sustainability of the business. The discussion
enumerates different change management models and the manner in which they might be
implemented on the organization in order to enhance the operations of the same. The change
management models will also help the management in enhancing the productivity and
profitability through the suitable understanding of the capabilities of the same while operating in
diverse competitive market conditions.The different changes that are undertaken by
organizations are supported with the view of systematic application of diverse strategies through
change models. The management of change in the organizational context is enhanced through the
involvement of the workforce. The assessment of the capabilities and competencies of the
organization enhances the scope of productivity and profitability of the firms as per the needs.
Therefore, the discussion aims at delineating all the factors that might be considered by the
organization while implementing change in the processes.

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