HRM 560: Managing Organizational Change
Dr. Kelly Nicholson
Stories of Change
Managing an organization is an important task that has to be managed well. In our text, Managing Organizational Change, we learned how companies such as Hewlett Packard, IBM, Kodak, and McDonalds addressed significant changes that occurred within their organizations. The Kotter’s model from the text, Leading Change, identifies several significant errors that each of these organizations made while implementing change. Palmer (2009) stated that changing organizations is as messy and it is exhilarating, as frustrating as it is satisfying, as muddling-through and creative a process as it is a rational one.
One significant error made is “Allowing too much complacency”. Kotter (2012) stated that the biggest mistake people make when trying to change organizations is to plunge ahead without establishing a high enough sense of urgency in fellow managers and employees. Kotter explained how this error is fatal since transformations always fail to achieve their objectives when complacency levels are high. A great of example of complacency was with Hewlett Packard (HP). When Fiorina joined HP, the company was in serious trouble and they needed strong guidance and leadership. There was growing competition in the personal computer division, and the company was losing market shares to rivals such as Sun Microsystems and Dell (Palmer, 2009).
Although Fiorina had aspirations to get HP on track, there were a lot of external pressures for her to change how the company operated. Fiorina reorganized the company into “quadrants”, creating two “front-end” sections that consisted of sales and marketing and two “back-end” functions where manufacturing and research occurred (Palmer, 2009). Fiorina was creative with her approach when she decided to restructure the company, but she did not communicate that change well with the employees. As a visionary, you have to write the vision and make it plain that they others can understand see what you are trying to achieve. Palmer (2009) explained that how there was considerable, but subtle, employee resistance to the change because radical change was not widely welcomed by many who were part of the HP system. As a leader, you cannot make everyone happy, but you need to find a happy medium in order to help employees transition well and communication is the key.
The second significant error was made was “Underestimating the Power of Vision”. Kotter (2012) stated that vision plays a key role in producing useful change by helping to direct, align, and inspire actions on the part of large numbers of people. In 1988 Kodak’s employment had peaked at more than 145,000, with workers turning out everything from cameras and motion picture film to floppy disks and pharmaceuticals (www.Kodak.com). USA Today stated that 1988 was also perhaps the last unqualified good year for the company and the beginning of the end of its role as an industrial giant (Matthew, USAToday.com).
In the beginning when Kodak started, the competition was limited and I believe Kodak felt they were in a good place. Stiff competition from Fujifilm, Canon Inc., and the creation of digital photography left Kodak behind in research and product development. When Kodak tried to implement change, it required them to cut their dividends and raise capital for new technology purchases (Palmer, 2009). For many of Kodak’s employees, the future looked bleak as they tried to move into the digital technology age. The leaders of Kodak seemed to lack vision and innovation which later lead to over 30,000 employee laid offs.
The third significant error made would be “Failing to Create a Sufficiently Powerful Guiding Coalition”. Kotter (2009) stated that major change is often said to be impossible unless the head of the organization is an active supporter. He explained how successful transformations