Change The Structure At Ibm

As a result, Zwick (2002, p. 542) has noted that implementing change programmes in organisations that realise positive outcomes remain problematic for many organisations in the 21st century. Ayodeji & Oyesola (2011, p. 235) have postulated that organisational change is a dynamic process, which when taken poorly contribute to employee resistance to it, and eventually leads to failure of the whole process. 3|Page Organisation Behaviour; MGTS 1601; Individual Essay; Employee resistance to change Yuanli Zhang 43401163 Employees resist changes when they occur in the organisations for several reasons. Many organisations when they introduce changes are likely to stick to the ‘top-down organisational change’ process (Awasthy, Chandrasekaran & Gupta, 2011, pp.

Kotter’s 8-Step approach to transformational change begins with creating a sense of urgency. Creating a sense of urgency involves examining markets and competitive realities and identifying and discussing crises, potential crises, or major opportunities (Weiss, 2012). At its peak, Microsoft was at the forefront of computing technology. This position led to “overnight millionaires” that eventually skewed the perspective of the once eager employees. Long time executives ended up letting new employees handle everything while they waited for the next windfall. Instead of continuing a momentum of innovation, they [Microsoft] had allowed themselves to reach a plateau while the competition past them by. Innovation gave way to employees

In the case presented both AFLAC and L.L. Bean had their own distinctive ways of utilizing their products in order to enhance the total compensation for its employees. The factor that has deterred more employees away from their current employer is that of benefit packages, and reward systems. As stated by () “compensation affects a person economically, sociologically, and psychologically. For this reason, mishandling compensation issues is likely to have a strong negative impact on employees and, ultimately, on the firm’s performance” (p.313). Many felt just a bump in pay wasn’t enough to substantiate their hard work or the efforts that the performance efforts provided to their organization. As stated by () “the right total rewards system a blend of monetary and non-monetary

Compensation systems can take on many forms, all of which have positives and negatives related to it. However, certain components are noted to be determinants of solid compensation plans. One agreement of a solid compensation system is the use of incentives. “Clearly a successful companies set objectives that will provide incentives to increase profitability” (Needles & Powers, 2011). Incentive bonuses should be measures that the company finds important to long-term growth. According to Needles & Powers (2011) the most successful companies long term focused on profitability measures. For large for-profit firms, compensation programs should offer stock options. The interweaving between the market value of a company’s stock and company’s performance both motivate and increase compensation to employees As the market value of the stock goes up, the difference between the option price and the market price grows, which increases the amount of compensation” (Needles & Powers, 2011). Conclusively, a compensation plan should serve all stakeholders, be simple, group employees properly, reflect company culture and values, and be flexible (Davis & Hardy, 1999; The Basics of a Compensation Program).

Change in an organisation can either be planned or unplanned. “Planned change is change that comes about as a result of a specific effort on the part of a change agent” (Wood et al. 2001, pp 635), with unplanned being the opposite. Wood (et al. 2001, pp 635) also states that planned change comes about as a result of someone’s perception of a performance gap. The board’s recognition of such a performance gap led to Fletchers appointment as chief executive, and change agent.

Organizations must respond to their internal and external environment. Therefore, organizational success heavily relies on leaderships ability to manage change. Unfortunately, many leaders struggle to effectively lead change initiatives. In fact, Ashkenas (2013, para. 1) reported 60 – 70% of organizational change initiatives fail to meet their objectives.

However, change can be a risky process that can have negative, instead of positive, consequences for the company’s future. In fact, it has been estimated that only about half of the large scale interventions succeed. With the above in mind Bruch, Gerber and Maier (2005) aimed at identifying the characteristics of a successful strategic change program by using the case of German aviation Group Deutsche Lufthansa. Lufthansa succeeded several times in successfully implementing change, as a response to the turbulent aviation market conditions between 1991 and 2004. Lufthansa’s last, and most successful, strategic change program was the D-Check. Part of what made D-Check so successful was the fact that Lufthansa’s management made a distinction between leading decisions and managing decisions. Leading decision deals with conceiving a clear goal – in other words, what would be right. Managing decision deals with finding the way to achieve the goal – in other words, how do we do it right. Therefore, before implementing change a company should clearly and conclusively resolve the issue of what change would be right and how can be done right. Key questions are the following:

Dunlap’s salary was just over $500k and he took no bonus. But he received a substantial stock option and award package. The restricted stock award component was to vest in two years, meaning that Dunlap’s compensation would be closely linked to the company’s stock performance for that time. Although the short term profits benefited shareholders, no incentives to create a long term, profitable company existed. Sunbeam’s performance-based incentives brought greater motivation to Dunlap to increase the firm’s stock value by any means necessary. He created remarkable shareholder value, in part by cutting half the company's 12,000 workers and closing many plants. Generally speaking, the first compensation package was excessive, but it linked the CEO’s and stockholders’ goals. It was not well designed, but it was congruent with Sunbeam’s business model of maximizing shareholder profits, but it drove an unhealthy behavior.

It was reasonable for a CEO’s compensation to increase as the company expanded and became a larger entity, and the newly-granted shares and increasing stock options further aligned the CEO’s personal interests with those of the company and shareholders. In this sense, the second compensation package was also well-structured and not excessive. Seeing Sunbeam’s revenue rising and stock price climbing steeply upwards, Sunbeam’s shareholders and directors were fully convinced by Dunlap’s leadership, so they might perceive the increase in compensation amount necessary to retain and better motivate Dunlap to enhance the company’s value. Nonetheless, they neglected the fact that the increased portion of the equity-based compensation also further motivated the CEO’s dangerous behaviors pertaining to improper earnings management.

As Thompson (2015) has discussed, the world is changing fast and organizations must be flexible in handling changes to be able to thrive well or they may experience dilemmas. In 1997, Apple Company, which almost reached bankruptcy ousted its that time CEO, Gil Amelio, where Steve Jobs replaced him and declared himself interim CEO. Apple that time is experiencing a disruptive change, a change that is radical and immediately happening, in other words unexpected. However, they were able to response to it quickly and prevented the company to hit the very bottom by bringing back Steve Jobs. Jobs had so much idea with him, which the company needed most at that time (Time, 2016).

IBM needs to grow revenue and stay competitive in the dynamically changing computer marketplace of the 1990’s by maintaining technological leadership and accepting the organizational transformation which needs to be undertaken for them to excel. IBM needs to recapture their previously held powerful position in the personal computer and microprocessor markets and regain value in the company which will increase its stock value and competitive advantage in the marketplace.

To adapt to the fast changing pace of business, IBM CEO Louis Gerstner took the

On April 1, 1993 Louis V. Gerstner took over as IBM’s chairman and CEO. Gerstner was able to recognize the flaws in IBM’s model to have the company being run as several independent parts from one another. From the beginning he was able to recognize that “IBM was greater than the sum of its parts … and the entire

Many questions are still being raised concerning the collapse of Enron. The aftermath of Enron’s fall has brought review of the actions that took place prior to the collapse. Many of these questions may be left unanswered. The company’s executive management, board of directors, and auditors hold the responsibility for the ultimate collapse of a once dominant force in the energy industry. Team A developed several options in a plan that could have possibly helped Enron avoid their demise. The plan is designed to discuss the benefits and challenges of communication, collaboration and conflict management. It will provide an opportunity to the management team of Enron the benefits of developing strong communication between all employees

In comparison with the loss of 4 billion in 1992, what Gertsner did was amazing. He coped with IBM problems by solving the most severe to the less one. At that time, problems of products and customers was the most serious which cost IBM billion dollars in loss. Gernstner focused on getting cost out as quickly as possible and ‘clean sheet’ the process and redesign it for global use.