Change Management Strategies at IBM: A Leadership Report Analysis

This report delves into IBM's change management strategies, focusing on the period when Gestner took over the company. It begins by constructing a change kaleidoscope for IBM, analyzing the change options available to Gestner based on the Balogun and Hope-Hailey model. The report then explores various theories that could explain the steps Gestner might have taken to overcome resistance to change within the organization, including changes in job roles, salary structure, and performance-based rewards. The analysis covers both external and internal changes impacting IBM, such as economic and technological shifts, and the company's evolution from CTR. The report highlights key aspects such as change start points, change styles, and the importance of addressing internal forces to drive change. Ultimately, the report emphasizes the implementation of strategies to improve customer relationships and decentralization within the company. The report also examines how IBM adapted a proactive approach to support organizational growth and performance, including cultural changes and business process re-engineering. The report concludes by summarizing how changes like flatter organization, market-oriented rates, and performance-based rewards were implemented to manage manpower, retain skilled employees, and enhance IBM's market position.

LEADING & MANAGING
CHANGE

Table of Contents
INTROUCTION .............................................................................................................................1
Main Body.......................................................................................................................................1
1.Draw a change kaleidoscope for the organisation at the point at which Gestner took over.
Using this model (Balogun and Hope-Hailey), discuss the change options available to him at
that point.................................................................................................................................1
2. What theories are you aware of that would explain the steps Gestner might have taken to
help to overcome resistance to change? ................................................................................4
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
.......................................................................................................................................................10

INTROUCTION
Organization seeks to change its strategies so that it can assist them to attain objectives
and goals. Although, change is not a constant event because company needs to adapt changes on
to stay in market for a long time. These modifications can be drive through external and internal
changes that's why it has capability to impact in positive and negative manner. As it is given in
case study, IBM which is a leading computer company at present time has gone through severe
changes. There are various kinds of changes that occurred in organisation that impacted on its
productivity and profitability. This assignment consists of theories and management practice of
change, culture characteristics, effective team development, role of organisation structure,
learning styles and their application, and organization change management (Iles, 2010).
Main Body
1.Draw a change kaleidoscope for the organisation at the point at which Gestner took over.
Using this model (Balogun and Hope-Hailey), discuss the change options available to him
at that point.
Changes are required for every organisation to stay in the market for a long term because
it supports sustainability. In order to stay in marketplace, company needs to face several
challenges because firm needs to adapt modifications due to external and internal changes. These
changes are required to shift a firm from one state to another. These changes are unpredictable
and can be risky because it is hard to give a statement how far these changes will help
organisation to attain its objectives or will impact in which manner. IBM applied various
modification that can keep it safe from adverse condition and help it to run a business in an
efficient way. The organisation needs to adopt changes that improve its current state to achieve
its future goals (Hellman, 2012).
There are several changes that brings opportunities and threats for the organisation. It
depends on handling changes in right direction. If these changes tackled in an appropriate way
then it ensures growth opportunities for business. In contrary, if these changes mis–handled then
it can bring lot of threat that can create problems for company. There are two kind of changes
which impact on business such as external and internal. Thus, these changes are affected on
organization so below is the description at which Gestner took place in company.
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External changes – After post- war, there were changes in economic and technological
aspects of US. This result into government control in respect to functionality of computing
sector. This benefit IBM to make strengths that is sell expensive peripherals, software, computer.
With this, buyers get locked with firm as they can't purchase these items again in short time
period. Besides this, changes in rules and regulations of government require to be considered by
management of IBM to reframe tactics and conduct business in according to norms. IBM also
require to use technologies which are effective and help them to position superior than
competitors (Yoder, 2014).
Internal changes – An organization also needs to be change its process that can cause to
bring new changes. IBM that is International Business Machines name was Computing
Tabulating and Recording (CTR) which is formed with collection of three firms name by Charles
Flint. IBM is international firm, so management require to have skilled members for delivery of
quality services to clients. For this, they require top reframe policies and structure for retaining
people for longer time. This aid seniors to design system and conduct business activities in
respect to market conditions (Kotter, 2012).
Before Gestner take over chairmanship of IBM there were several problems that required
essential changes to be done in an effective way. That's why according to the Change
Kaleidoscope model he can adopt various options which can make bring changes in
organisation.
Change implementation needs supports by three groups that is managers, consultant and
employees. All three groups must be agree to bring changes because without not change can be
made without their involvement. As organization was declining that's why it is necessary to
conduct a change process from top management (Crawford and Nahmias, 2010). Before Gestner
take over chairmanship of IBM there were several problems that required essential changes to be
done in an effective way. That's why according to the Change Kaleidoscope model he can adopt
various options which can make bring changes in organisation.
CHANGE KALEIDOSCOPE:
This is model of change management which define that in an organisation is present in
dynamic environment. It is necessary that alteration and modification in system are made by
management to sustain firm in market. In this globalisation is prime reason that firms require to
use advanced technologies for utilisation of resources in efficient manner. Thus, deliver quality
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items and services to customers for maintaining firm's position and brand image in market. In
IBM, change Kaleidoscope was used for enhancement in production level. This aspect also helps
company to manage change by adopting program for transforming business (Iles, 2010). In this,
research and development plays essential role in designing system for delivery of quality
services to clients. Top personnel involve stakeholders that are staff, investors, suppliers in
meeting for communicating information about changes. They also take their opinions and
suggestions for making appropriate judgements in respect to changes in system and policies. This
help seniors to enhance team effectiveness by conducting training and development programmes.
Thus, resourcing, performance measurement result into creation of manpower which are efficient
to execute tasks effectively (Turner, 2014).
Design or Implementing Choices – As it is an inner part of ring and it is open to Gestner
to pick any option for change. Therefore, there are four change paths that depends on their nature
of result and of change. Thus, he can opt for evolution, adaption, revolutions and reconstruction.
On the basis of the case study, Gestner selected reconstruction of organisation structure as he
reduced employees which were causes to increasing cost.
 Change start points - There are several change start points, in IBM change begin by
top management but it also start with bottom line (bottom – up change). As he was
experienced as Management Consultant at McKinsey. That's why he realised that cost
should be cut and in order to do so he appointed two cost specialists who are good in
practising. Initially change should also occur at only part of organisation, therefore, it
was started from cost reduction so that productivity can be managed (Cowne, Frankl and
Gerschel, 2015).
 Change style is pattern to manage change process that can be divide in five parts such as
education and delegation, through changes can be discussed with employees and their
support can be expected. Decision can be taken in collaboration with employees with on
the contrary limited number of employees can participate in change decision. Changes
are directed and controlled by change agents. If Gestner did not considered these options
he used coercion to impose change decision with authority. As his change target was to
change modify behaviour and values and generate expected outputs. The level of levers
and interventions are needed for change management of organisation. It is required to
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apply culture web to recognise organisation culture and existing change barriers that are
needed to remove.
These are options which can be opted for change, Gestner needed to focus on internal
forces of change such as cost of people that put their efforts to increase productivity. Gestner
needed to conduct a top management changes through which they can find out actual problems
of organisation. In order to overcome these issues he appointed cost analyst that results in
keeping a close watch of marketplace that consists of change in salary structure, reduced in job
from 5000 to 1200. Compensation was based on performance of employees that was beneficial
for IBM in cutting down the cost. As it is give in case study, after joining of Gestner IBM started
to focus on enhancing customer relationships so that it can stay in the marketplace for a long
time and adopting decentralizing to assist in different areas (Marshall, Orrell and Cameron,
2011).
According to the given case study of IBM, it adopted a change process that was based on
the above model such as change in start points and change in style. The organization adapted
pro- active approach that supports in organization growth and performance. It was going through
the culture changes, total quality management, business process re-engineering that needed to
implement changes in order to attain better results.
Change kaleidoscope is tactic which is used by management of IBM to make strategies
through which individual and team members are influence to work with latest technologies. They
make changes in system and policies in respect to external market components. Through this,
innovative and creative business ideas and activities are conducted which are beneficial for
company. Thus, change benefit senior to make success and growth of business in respect to
positioning higher than rival firms (Ang, L., 2012).
2. What theories are you aware of that would explain the steps Gestner might have taken to help
to overcome resistance to change?
Change refers to alteration and modification in system and strategies that are made by
management to conduct business in according to market conditions. It is necessary that alteration
in system and strategies are made by seniors for sustaining firm's position and image in market.
Internal changes are made in IBM in respect to external factors that is government policies,
economic conditions, competitors, technology and other components.
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Louis Vincent Gestner, chairman of IBM who didn't have knowledge in respect to run
computer business. The problems which were faced by him was lowering down in workforces
worldwide. IBM is international firm which require to change their core values. It is necessary
that recognition to staff members is given to make them feel connected and valuable part in
company. Employees were made competent to work with advanced technologies for delivery of
appropriate services to clients (Drew, 2010). Changes help firm to reduce redundancies and
enhance relations with clients for maintaining brand image in market. These are changes in plan
which are made in IBM are defined below:
Types of Changes - Fewer, faster jobs in a flatter organisation: In IBM, management transformed old salary
grading system to new in which job titles were reduced from 5000 to 1200. This help
them to maintain connection with team members properly. Number of jobs are cut which
aid seniors to make fast decision making and inform employees about changes. Look to marketplace: Administration make changes in structure of salary of staff that is
from single to merit budget in respect to their work and job family. Market oriented rates
were considered while providing wages to temporary employees (Brisson, 2010).
 Reward for performance: In IBM, old compensation plan result into difficulties and
problems in respect to distribution of salary among team members. Management design
new system by which they set budget for providing acknowledgement to employees
about pay scale. They inform people about top performers that is stars and provide them
wages in according to their performance and outcomes.
Resistance of change – These are changes which are made by management of IBM for
maintaining manpower for sustainability of firm's market image and position. Flatter
organisation help them to provide direction and instruction to employees in respect to their tasks
and targets. Besides this, market rates are considered while providing staff salary aid seniors to
retain skilled and competent people (Dols, Landrum and Wieck, 2010). This help them to lower
down turnover rate that is shift to another firm. Reward for performance is another aspect which
help management to give acknowledgement and recognition to staff members performance.
Thus, top performers are encouraged and motivated to work effectively and gain rewards in
respect to their outcomes.
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Kurt Lewin change model – In many organisation declining can be often seen due to
some reasons which is major cause to adopt reorganization, adjustment and other changes. These
modifications brings positive changes if it is aligned in a proper manner. But these changes may
not makes everyone happy and that's why employees resist to change. That's why Kurt Lewin
developed a model that consists of 'Unfreeze – Move – Refreeze'. According to these three states
IBM can conduct change as -
(Source - The Kurt Lewin change model, 2018)
Unfreeze – In this stage, people who are working in organization they realizes that
something is going to be change and they have some doubts, uncertainty about new changes
(Dols, Landrum and Wieck, 2010). The change leaders are required to communicate in an
effective way to their employees so that they can understand why changes are essential for
organisation. By knowing the fact about change requirement they will able to accept changes.
That's why it is essential that top management should involve employees so that they can support
with constructive approach during change process. According to the given case study, Gestner
should also transfer their message among employees and involve them in change process so that
they could understand requirements of change. They also support to the management so that
organisation can achieve its goals.
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Illustration 1: The Kurt Lewin change model

Move – This phase define that employees resist change that is they didn't want work
with advanced technologies. In firm, alteration in system in respect to alteration in technology
are made by management to conduct business activities in according to market conditions. IBM
is conducting business globally, so there are large number of competitors which affect on firm. It
is necessary that seniors encourage and convince subordinates to work with latest techniques and
technologies (Kotter, 2012).
Refreeze – It is about solidifying change. It can be observe that after move stage in
which changes are implemented, employees are apt to revert to their habits back. Thus, it is
necessary for leaders to arrange evolutions, and monitor adjustments whenever required. This is
essential because employees can understand that there is no option to go back towards old habits
and this will make them stable in new changes. Slowly, they will realise that they it is good for
them. In IBM employees were not agreed for a a formal system but if Gestner communicate with
employees in a effective manner then there was possibility that they understand value of being
involved in employee relations.
Force field analysis is also supports this model ash there are some elements which
supports change whereas others are resisting these changes (Ang, 2012). It is framework which
management of IBM uses to analyse factors which impact on functionality of firm. They find out
driving tactics which affect on accomplishment of business goals and objectives. This helps
management to give explantation to team members about importance of modification and
alteration in system. Employees are motivated and inspired to adapt changes and work with
advanced technologies for delivery of quality services to clients. Thus, enhance organisation
functionality to improve market image and brand image in respect to competitors.
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(Source : Force-Field Analysis, 2017)
John Kotter eight step and ADKAR are different model of change which are used by
management to make modification in firm. These are tactics which are used by senior of IBM to
inform staff members about urgency and needs of change in firm. Employees are made to
convince and influence to work with latest technologies by acknowledging benefits of change
(Brisson-Banks, 2010).
Strategies to overcome resistance to change: Administration of IBM can adopt to reduce
change resistance from team members. For this, they have various tactics which help seniors to
influence employees are stated below:
 Education and communication: In IBM, management inform staff members about
modification in system that are made for conduction of business activities effectively.
Training and development are conducted by senior for enhancement of skills and
knowledge in respect to changes in technologies (Turner, 2014). This helps
administration to have skilled staff which have competency to work with advanced
technologies. Thus, quality services are provided to clients which benefit firm to sustain
its market reputation and image.
 Facilitation and support: Administration of IBM provide facilities to team members for
encouraging and dedicating them to work properly. They require to provide positive
working environment and facilities in respect to wages, working hours and safety and
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Illustration 2: Force-Field Analysis

other. Along this, seniors also provide support to team members in respect to guidance
and instruction to employees to work with advanced technologies.
 Negotiation and agreement: Top personnel of IBM require to make negotiation with
team members in respect to their salary and other facilities. Agreement is made with
employees in which rules and regulations are noted in respect to their roles and
responsibilities. Besides this, approval in respect to their duties and obligations of wages
and duration are stated. This help management to maintain team members and adopt
changes without resisting (Iles, 2010).
 Participation and involvement: Management of IBM involve staff members in meeting
and conference. Employees opinion and suggestions are taken for formulation of policies
and alteration in system in according to market conditions. This help seniors to give value
and recognition to team members for motivating them to perform tasks effectively.
CONCLUSION
From the above assignment it can be concluded that change is crucial aspect for
company that gives it a growth and sustainability in the marketplace. As IBM stagnated due to
lack of trust and effective communication in their company. External and internal changes are
made by management for which change kaleidoscope is used to convince team members. Fewer,
faster jobs in a flatter organisation, look to marketplace and reward for performance are changes
made by seniors to make changes in policies. Unfreeze, move and refreeze are conducted to
make employees to adapt changes. There are several models that can support in change process
such as Change Kaleidoscope and Kurt Lewin change model. These models will support in bring
out new changes and over come resistance. Education and communication, facilitation and
support, negotiation and agreement and participation and involvement are strategies used by
management to overcome resistance to change of staff.
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REFERENCES
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Kotter's 1996 change model. Journal of Management Development. 31(8). pp.764-782.
Brisson-Banks, C.V., 2010. Managing change and transitions: a comparison of different models
and their commonalities. Library Management. 31(4/5). pp.241-252.
Cowne, E., Frankl, C. and Gerschel, L., 2015. The SENCo Handbook: Leading and Managing a
Whole School Approach. Routledge.
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journal of project management. 28(4). pp.405-412.
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workforce. Creative Nursing. 16(2). pp.68-74.
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Kotter, J.P., 2012. Leading change. Harvard business press.
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countries. Management decision. 50(1). pp.147-162.
Marshall, S.J., Orrell, J., Cameron, A., Bosanquet, A. and Thomas, S., 2011. Leading and
managing learning and teaching in higher education. Higher Education Research &
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Turner, J.R., 2014. Handbook of project-based management(Vol. 92). New York, NY: McGraw-
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Online
The Kurt Lewin change model. 2018. [Online]. Available through:
<https://www.alchemyformanagers.co.uk/topics/Bx68PnkNyrJXJy45.html>
Force-Field Analysis. 2017. [Online]. Available through:
<https://www.activepresence.com/blog/facilitation-tools-force-field-analysis>
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