Comparing Change Management at France Telecom and IBM

This report provides a comparative analysis of change management strategies implemented by France Telecom and IBM. The analysis delves into the reasons behind the organizational changes, highlighting the impact of corporate culture and leadership on the outcomes. The report examines the role of human resources in the change management process for both companies, contrasting their approaches and effectiveness. The study explores the privatization and restructuring of France Telecom, the employee suicides, and the resulting changes, contrasting these with IBM's challenges and subsequent strategies. The report concludes by evaluating the successes and failures of each company's change management efforts, offering insights into the importance of proactive measures, employee well-being, and effective leadership in navigating organizational transformations. The report uses provided case studies on France Telecom and IBM to arrive at these conclusions and provide a thorough comparison of the change management methods employed by the two companies.

Running head: GLOBAL HUMAN RESOURCE MANAGEMENT
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Executive summary
This paper is going to focus on two case studies of two different companies, France Telecom
and IBM. The paper will highlight the corporate culture of both the companies and also
provide the issues faced by the company because of their culture and the reason that led to the
companies undertaking changes. This paper will provide a compare and contrast of the
change process in both the organisations and also reflect on the role of the human resources
in the process of change in both the companies. Lastly, it will give a concrete conclusion and
state why one of the companies has been successful in dealing with the change in the
organisation and why the other company failed to managing change effectively.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Reason for change in France Telecom...................................................................................3
Reason for change in IBM.....................................................................................................4
Comparison of the change in France Telecom and IBM.......................................................4
Role of HR in the change management process.....................................................................5
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7

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Introduction
Change is considered to be a vital part of any business and allows the business to
adapt to the environment and also helps in improving their market position. Noe et al (2015)
states change ultimately refers to growth opportunities and helps in developing the
organisation. However, managing change in the business is difficult as if not done efficiently
it can lead to the downfall of the business. This paper will focus on the change management
of two companies, France Telecom and IBM and compare and contrast between the successes
of the two companies after undertaking the change.
Discussion
From both the case studies of France Telecom and IBM, it can be seen that the
company culture has a massive role to play in leading to change in the companies.
Reason for change in France Telecom
The privatization and the restructuring program of the company was the major reason
that led to the change in France Telecom. After the abandonment of the Equal Opportunities
Bill, the environment of the company had become toxic for the employees. The increase in
the global competition and also the employment laws put forward by the government had
made the work environment stressful and also led to the poor treatment of the employees who
were not wanted. They were demotivated and often humiliated forcing them to leave the jobs.
This work culture had created such a pressure among the people that it led to around 28
suicides of France Telecom employees in the year 2000 and 29 suicides in the year 2002.
Most of the suicide letters stated that the employees had decided to end their lives because of
their frustration and humiliation in the workforce. The media reflected this piece of news and

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this led to the company have a negative reputation in the market. Thus, the company decided
to make a positive change to curb this issue.
Reason for change in IBM
IBM was facing issues as the company for the first time lost around $2.8 billion
during the tenure of John Akers. IBM was always famous for their lifetime employment
policy however due to this loss the company had to lay off around 107,000 jobs and also
announced that the company was expected to lay off more 25, 000 employees because of the
loss the company was facing. The culture change program by John Aker called the Market
Driven Quality and his new strategy, pay for performance incentive system had demotivated
employees and his decisions of making a change in the company backfired and resulted in the
continuous deterioration of the company. John Aker was later pushed out and after his
resignation a concrete change was needed in the company to boost the sales of the company
and recover the losses keeping the culture proposed by Thomas Watson Jr intact.
Comparison of the change in France Telecom and IBM
Both the companies due to their respective reasons had undergone through changes.
France Telecom had come up with a proposal of recruiting 3,500 staffs so that they could
lower the level of pressure among the existing employees. Another thing they proposed
which was to provide employees at the managerial level would have 30 to 50 percent of their
salary linked to their social performance which was employee satisfaction and attendance.
IBM on the other hand, proposed new changes where they focused on attaining
customer satisfaction as well as employee satisfaction by looking into their needs like
providing financial security and appreciated them along with the change in the organizational
structure. This new change brought success to IBM as it improved the condition of the
company because of the motivation of the employees which lead to the productivity and also

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because the mission of the company was clearly explained to the employees according to
which they put all their efforts
However, France Telecom was unsuccessful even after the change because the
company from the very beginning ignored the suicide rates and took them several years to
come up with the recommendations which should have been done long before when these
detrimental incidents were happening which showed the lack of remorse of the company and
their inhumanity which already damaged their company.
Role of HR in the change management process
The role of the HR in the change management process was huge in IBM as it had
instantly acted upon the beliefs laid down by Gerstner. According to scholars, it is important
for the HR to take immediate actions when they can see issues cropping up in the
organisation in terms of employee termination (Becton, Gilstrap and Forsyth 2017). The
process of change here was slow and took almost ten years to succeed with focusing on a
different business strategy and also ensuring the needs of the employees are met and they are
taken care of and it can be seen that the HR here did take an action immediately.
France Telecom did propose some changes to improve the situations in the company
by trying to employ more employees in the organisation to reduce the level of stress in the
organisation however, it can be seen that the HR did come up with a five year strategy to
make a positive change to curb the increasing suicide rate of the employees by recruiting
more employees however, the only issue here is the their lack of negligence which resulted in
so many people losing their lives.

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Conclusion
France Telecom and IBM both had undergone change in their business in order to
ensure the success of the organisation. Both the companies have been facing issues however,
it can be seen that IBM was the company who had been able to successfully make changes in
the organisation however, France Telecom had been unsuccessful in changing the
management of the business. The major reasons for this considered to be the poor work
culture of the company which was proven after they did not take any measures and actions
for the suicides committed by the employees. On the other hand, IBM had taken immediate
steps and ensured change for the prosperity of the business and its culture which was one of
the major reasons for the success of the company in the long run. Thus, it is important to
make positive changes in the business when it is necessary rather than waiting for the
complete damage.

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Reference
Becton, J.B., Gilstrap, J.B. and Forsyth, M., 2017. Preventing and correcting workplace
harassment: Guidelines for employers. Business Horizons, 60(1), pp.101-111.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2015. Human resource
management. Gaining a Competitive.