International Business Machines Corporation - Literature review Example

?Table of Contents Table of Contents Introduction 2 Organizational culture and managing change 3 Analysis 4 Recommendations 6 Conclusion 7 Introduction This report looks at the International Business Machines Corp. (IBM), operations in the state of Indiana that introduced telecommuting as an alternative to cutting people as a viable approach for reducing operational costs in order for the organization to realize cost savings. IBM-Indiana did manage to achieve cost savings of US$ 3.2 million in the year that it was implemented and $5 million a year each year afterward (Martin, 2004). However, while IBM-Indiana succeeded in its cost saving objective two issues arose. These issues are manifested as the key problems that IBMers at Indiana experienced during the implementation phase of the telecommuting project. Firstly, there was the disruptive change on the organization’s culture as a result of the telecommuting. Secondly, there was the problem with the initial technological support. The first issue has been identified by several authors as being a key stumbling for managing successful change efforts (Beer, Eisenstat, & Spector, 1990; Heracleous & Langham, 1996; Johnson, 1992; Kotter, 2007). All these authors’ viewpoints are looked at within the report. On the other hand, this report does not find the second issue of problems with technological support to be major because while an organization is implementing change one anticipates a state of flux during which systems and technologies have to experience instabilities. Johnson (1992) defined the cultural paradigm as the core set of beliefs and assumptions, held relatively commonly by management and employees, that are specific and relevant to that given organization and that are learned over time. Telecommuting changed the way of doing things at IBM for example some managers lost prestigious privileges such as private offices with private secretaries and team members became physically dispersed which made inter-team communication much harder. The first issue, the negative impact of telecommuting on IBM-Indiana’s cultural paradigm is analyzed using Johnson (1992) cultural web approach. The second issue is largely a technological issue that has to arise as the organization transitions from one stable organizational system to another. Organizational culture and managing change According to Johnson (1992) culture plays a big role in the development of strategy, the management of the resulting strategic change and also on the choices made by an organization’s leadership that lead up to both strategic development and change. In this case telecommuting presents a major strategic change for IBM-Indiana. The culture web is a tool proposed by Johnson (1992) as a suitable device for conducting an organization’s culture audit. According to Heracleous and Langham (1996) the cultural web allows managers to conceptualize the organization either within an interpretive frame of reference (what the organization is) or as a variable in a functionalist frame of reference (something an organization has). The culture web comprises of seven elements: paradigm, rituals and routines, organizational structure, power structures, control systems, symbolic aspects and stories as shown in Figure 1 below. Almost all the cultural web elements were greatly affected by the introduction to telecommuting. With telecommuting employees had to contend with new rituals and routines for example maintaining accurate and up to date schedule of activities on the computer to enable scheduling of meetings and teleconferences. Formalized control systems that monitor and therefore emphasize what is important at IBM, in order to focus attention and activity also had to be changed to reflect the new arrangement of partly off-site and on-site office arrangements. Managers who had private offices and private secretaries lost these huge symbolic aspects of being managers at IBM and the loss of group-work setting diminished opportunities for social contact and casual communication that were vital for propagation of stories and grapevine (Martin, 2004). Figure 1: The cultural web Analysis Beer et al. (1990) found that for change to occur the primary target for change effort should be behavior. According to them, key attributes such as employee knowledge, attitude and beliefs that are affected by any change effort are shaped by recurring patterns of behavioral interactions. Secondly, Beer et al. (1990) argued that the effects of the organizational system on the individual surpasses those of the individual on the system. This manifests the strength of an organizational system on the individual. The organizational system and the behavioral interactions within it are manifestations of organizational. Culture, therefore, lies at the heart of managing strategic change. Following from Beer et al. (1990) argument, the most effective way that IBM should have approached the telecommuting implementation would have been to first change employee behavior through imposition of new roles, responsibilities and relationships. These would force employees to adopt new routines and rituals which would minimize their resistance to change while preparing them for the new way of working. Heracleous and Langham (1996) outlined four important issues that organizations need to focus on when managing strategic change. First of all, leadership of the change process has to be visible, active and credible because other employees will largely derive the new values or rituals required by the new culture based on how there leader(s) act or behave for example through rewards and/or punishment. The second issue is reducing resistance to change. This should be done by involving the employees who will be affected by the changes right from the planning stage. This offers them the opportunity to own the process. Thirdly, management needs to use personal means of communication as often as possible and seek employees’ views and concerns during the change process. Mike Wiley did this job very well during the telecommuting implementation at IBM, especially with regards to convincing the management team to back the effort in spite of the losses of some of their artifacts and symbols. Finally, the organization needs to adequately invest in the development of new skills for the new roles, responsibilities and relationships that shall come about as a result of the change process. IBM conducted training session and provided written description to all 300 telecommuters (Martin, 2004). Another author who has analyzed the importance of culture to the anatomy of organizational change is Kotter (2007) who identified tackling organizational culture as one of the eight critical success factors that managers have to get right if they are to successfully lead their company’s change efforts. According to him change only lasts if it seeped into the bloodstream of the corporate body. This metaphorically means that the new behaviors that arise out of change efforts have to be rooted in the social norms and shared values of that organization. Kotter (2007) identifies the use of stories, for instance as having a big part to play in making change efforts stick as long as management ensures that only the right story goes around. For example when results improve during a change effort under the leadership of a charismatic boss staff will tend to link the improved results to the leadership style of the charismatic boss. An organization could use this as a story whereas in reality the success is attributable to the overall result of the change process. In such a scenario the organization loses the credibility of its change process which is attributed to a single, charismatic leader. To curb the spread of such misinterpretations, Kotter (2007) states the need to show people how the new approaches, behaviors, and attitudes due to strategic change have helped improve performance. This ensures that the right message gets captured by the organizations stories which would be very important when there is need to implement change in future. Recommendations From our analysis above the following recommendations are made: I. IBM should begin its next change effort with a cultural audit. The cultural web is one useful tool that the organization could employ for this purpose. A cultural audit will enable the company to understand its organizational culture as a whole and see whether it is compatible with the change being advocated for. This will also shed light on whether the company’s culture will be easy or difficult to change based on how entrenched staff is to the seven elements of the cultural web. II. Armed with knowledge of the organization’s culture, IBM should then seek to first change employee behavior through imposition of new roles, responsibilities and relationships geared towards the targeted change effort. New roles and responsibilities forces staff to adopt new routines and rituals which make it easier to overcome the old cultural paradigm. III. Lastly, IBM must ensure that any successful outcomes of the change effort are attributed to the right reason for that. This ensures that the right message gets captured by the organizations stories which will be very useful during the implementation of other change initiatives in future. Conclusion The major issue that arises in IBM-Indiana’s telecommuting change effort is the importance of understanding organizational culture before implementing change. Whereas one might have expected technological problems to be the major problem, this turn out not to be the case. Organizational culture seeks to preserve the old way of doing things which is in direct competition with the impending changes that will result from the telecommuting project. References Beer, M., Eisenstat, R. A., & Spector, B. (1990). Why Change Programs Don’t Produce Change. Harvard Business Review, (November - December), 4–12. Heracleous, L., & Langham, B. (1996). Strategic Change and Organizational Culture at Hay Management Consultants. Long Range Planning, 29(4), 485–494. Johnson, G. (1992). Managing Strategic Change - Strategy, Culture and Action. Long Range Planning, 25(1), 28–36. Kotter, J. P. (2007). Leading Change: Why Transformation Efforts Fail. Harvard Business Review, (January), 92 – 107. Martin, E. W. (2004). Telecommuting at IBM-Indiana. In C. V. Brown, D. W. DeHayes, J. A. Hoffer, E. W. Martin, & W. C. Perkins (Eds.), Managing Information Technology (5th ed., pp. 164–169). New York: Pearson Education.  Read More