Introduction
Innovation is essential in any business sector, and its successful implementation significantly determines a company’s success and stability in today’s market. However, during the change process, management may face open opposition from the team or choose an incorrect approach to introducing it (Anderson, 2019). Thus, it is essential to evaluate the challenges and changes in IBM’s organizational structure, life cycle concept, and change management.
Changes in the Organizational Structure
IBM faced numerous issues that prompted organizational changes. For example, the company was suffering losses and reducing staff (Bivins, 2014). The decline in demand for IBM’s hardware necessitated organizational changes. Moreover, the need for change is influenced by both internal and external factors, such as shifting market needs, intensified competition, or ineffective teams within the organization. Hence, these factors became catalysts for change within the company.
Meanwhile, to address the challenges, the company proposed a change strategy. Accordingly, to generate profits and meet market needs, IBM needs to provide technology services, improve customer satisfaction, and increase revenue. Furthermore, the basis of the company’s new strategy is the need for IBM to become a world-class service provider by the mid-1990s (Bivins, 2014).
To implement these strategy changes, it is necessary to adjust the organizational structure. Thus, it is possible to apply Kotter’s theory to create a sense of urgency for change within the organization. The next step is to assemble a team comprising the best employees at various levels (Cameron & Green, 2019). This resulted in the creation of a project that involved professional staff in determining how the organizational structure should be modified to support the new strategies.
Consequently, based on the assembled team’s activities, management was able to create a vision of how the transformed organization should work and the means to achieve it. Moreover, the employees who participated in the project share a common vision of change and must communicate it to the rest of IBM (Bivins, 2014). Hence, organizational changes to the company’s structure need to be made based on the assembled team’s experience in executing the company’s activities in accordance with the new requirements.
Therefore, it is essential to create new departments that incorporate team members from the assembled team to disseminate innovative initiatives (Cameron & Green, 2019). As a result, these departments will be aligned with the main goals of the new strategy, workers will focus on its implementation, and the experience of the leaders will help them adapt.
New Organizational Structure
A new organizational structure is necessary to fully implement a strategy. Especially since the company has set new strategic targets, a new vision is needed to achieve them. Therefore, employees will be assigned to departments that perform specific tasks, as specified in their work plans. These work plans are based on the strategic plan and the target group’s experience (Bivins, 2014). Hence, completing a department’s tasks will affect the overall IBM strategy.
Moreover, the task force has developed new ways to measure employee effectiveness, and their application will allow setting specific performance targets for workers to achieve the objectives (Cameron & Green, 2019). It is essential to highlight that the new rules are based on the group’s practical experience in implementing the strategy, which confirms that their successful implementation will enable the company to emerge from the crisis.
In addition, it is essential to note that the new teams, formed by including the most suitable specialists, should exist for only one year. If employees do not demonstrate significant performance during the year and their evaluation is unsuccessful, further reformatting will be required (Cameron & Green, 2019). It is a way to motivate employees to quickly adapt to the new strategy and work effectively to implement it. Thus, the new organizational structure of IBM is fully aligned with the firm’s new goals and plan and provides for the following changes to support its chosen strategy.
Life Cycle Concept
The life cycle concept is based on the underlying principle that organizations, like living organisms, have a life cycle and face predictable challenges at each stage of development. In the first stage, the company needs a practical, workable business model to guide its course of action (Armstrong, 2021). This is a stage when companies need to accumulate capital, develop products and services, and hire workers.
Since IBM is a large organization, this stage is divided into several steps. Firstly, a new plan and goals have been created to continue the organization’s functioning in the industry. Secondly, new teams were formed based on workers’ professional abilities (Armstrong, 2021). Meanwhile, at the nascent stage, the company’s employees have a relatively simple structure. Most decisions are made by the business owner and the managers who developed the plan for IBM.
The second stage of the organization’s life cycle is the growth stage, also called the survival stage. The company aims to strengthen its relationships, create a solid foundation, and develop capabilities during this stage (Armstrong, 2021). IBM has successfully established its business goals and begun generating revenue. Therefore, during the growth stage, IBM achieves success and advances to the next stage. By the time the organization reaches maturity, sales and services stabilize (Armstrong, 2021). Accordingly, it became a major player in the market, demonstrating strong competitive activity.
Yet, there are negative trends, indicating that sales levels are stabilizing and growth is slowing. The organization is currently operating at a mature stage, successfully fulfilling all its goals and plans. However, with possible further market changes, IBM may reach a stage of decline. During the decline stage, the organization loses its competitive edge, and sales and revenues decline sharply (Deszca et al., 2019). Thus, all companies eventually cease to exist, and IBM should be no exception.
Change Management Model
The change management model can be used to manage the company. The reason is that at the first stage, the company’s head decided that changes were needed for IBM to start generating a profit (Bivins, 2014). To demonstrate the urgency of these changes, employees were provided with negative financial reports. As a result, each employee was awaiting new proposals from management and ready to implement them. To implement the new strategies, IBM established a task force comprising top performers (Bivins, 2014). It was this coalition of employees who first tested the new IBM format.
After the task force achieved its initial results, the results were communicated to all workers in accordance with the change management methodology to motivate them to adopt the changes. As a result, the task force’s example enabled the transformation and motivation of all employees. Moreover, the next stage of the change management model involves generating ideas for implementing the strategy among all company employees. In line with this stage, IBM reorganized departments and created new teams to handle specific tasks (Bivins, 2014). These workers were selected for their specific expertise and placed under the supervision of a single person from the targeted niche for a year.
Furthermore, each team was evaluated according to the school’s developed framework after a year of activity. Thus, at this stage, it is possible to evaluate not only employees’ work and problems but also to develop a plan to overcome resistance to change. In IBM’s case, management supported staff and provided all the required resources to improve their performance.
For example, this includes communication, training, and even customer service plans (Gliddon et al., 2018). Such actions by executives have improved the overall engagement of employees and improved the organization’s performance. Additionally, staff members who have gained experience working in new teams and have benefited from the support of managers can work effectively in a team where responsibilities are divided (Bivins, 2014).
As a result, each employee is now responsible for their own area of work and can quickly adapt to changes. Meanwhile, the last stage, according to the change management model, is to sustain and continue the changes. For this purpose, the organization can create a leader who will constantly seek opportunities to enhance collaborators’ motivation and improve the effectiveness of their work.
Assessment
IBM faced the challenges of high competition and changing market needs, but the company’s management began to respond to them only after it started incurring losses. Accordingly, to improve its market position, IBM should have responded promptly to address the problems, helping to resolve them more quickly and prevent employee attrition and losses.
Still, I believe that the managers who proposed the approach to change saved the organization from bankruptcy, because creating a coherent plan to change operations that meets the basic market requirements and the company’s capabilities is a wise decision to save IBM (Deszca et al., 2019). The primary issue for the enterprise was the lack of relevance of its activities in the market.
Moreover, IBM’s management chose the right time to introduce these changes, as evidenced by the fact that they assembled a group of top employees and attempted to implement the company’s goals through their activities (Gliddon & Rothwell, 2018). This approach effectively demonstrated both the positive and negative aspects of the strategy, without harming the company’s overall performance.
Nevertheless, I consider creating groups of employees periodically and evaluating their performance to be a valuable and innovative idea. This innovation and change enabled IBM to quickly adapt its employees to developments and operate successfully in the market.
Conclusion
In summary, IBM has leveraged the concept of innovation and change to adjust its strategic goals and plans, thereby preserving the company. Moreover, the organization created a group of individuals who were the first to implement the changes. It later became a leader for other employees, enabling them to quickly introduce and motivate workers to accept and adapt to the new environment.
References
Armstrong, R.L. (2021). Organization theory and design (4th ed.). Cengage Learning.
Anderson, D. L. (2019). Organization development: The process of leading organizational change. Sage Publications.
Bivins, S. S. (2014). A transformational change at IBM. Project Management Institute.
Cameron, E., & Green, M. (2019). Making sense of change management: A complete guide to the models, tools and techniques of organizational change. Kogan Page Publishers.
Deszca, G., Ingols, C., & Cawsey, T. F. (2019). Organizational change: An action-oriented toolkit. Sage Publications.
Gliddon, D. G., & Rothwell, W. J. (2018). Innovation leadership. Routledge.