Group Report: IBM Case Study on Leading and Managing Change

This report analyzes the IBM case study, focusing on the organizational changes implemented by Louis V. Gerstner Jr. The report begins with an introduction to organizational change, followed by a background of IBM before Gerstner's tenure. It defines the needs for change, incorporating the Kaleidoscope model to assess various change options. The report contrasts IBM's situation before and after Gerstner's appointment, using the Kaleidoscope model to evaluate power, time, scope, capability, preservation, diversity, capacity, readiness, change path, start point, style, intervention, and roles. Part 2 discusses the implementation of change through diverse models, including Lewin's and Kotter's models, to understand how Gerstner could have overcome resistance. The report examines how these models apply to IBM's transformation, providing a comprehensive analysis of the strategies and challenges involved in leading and managing change within the organization. The report concludes with a discussion on the effectiveness of the implemented changes and recommendations for future organizational strategies.

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,