New Culture or Back to Roots, Essay Example

Strengths and Weaknesses Evident From the Plan of Gerstner

It is evident from the case that has been offered for the study that the plan generated by Gerstner surely has many strengths and weaknesses. It is impossible to assess it on a closer level because the information is limited – only the general objectives that Gerstner had decided to pursue are enumerated, and his call to the top management of the company is given out. First of all it is possible to enumerate the strengths of the plan Gerstner created and the approach that he took towards the change entrusted to him.

One can see that first of all Gerstner looked deeply into the matter of IBM’s failure to sustain high productivity indicators and to remain one of the top technology providers in the world market. Gerstner did not stop only on financial highlights or on corporate culture – he tried to find the initial reasons for the gradual failure in the history of past success of the company, and he succeeded. He realized, with the help of Walsh, that the main problem was the inability to stay alert to the change in the market of technology that has recently started to experience tough competition with the IBM’s competitors being able to correspond to the quickly changing needs of the customers.

It was a true observation of Walsh that IBM made its initial biggest stake at the business owners and tried to resemble to that image (in the sense of employees wearing suits and trying to target their customers that way). But the IBM management did not take into consideration that evolution that business has experienced within the recent period of time and that it seized to resemble to the image created by IBM.

Consequently, it is possible to make an assumption that Gerstner detected the core problem underlying hindering success of IBM, which is grand success in itself. The culture of employees in IBM was more similar to formalization and not culture, so the cultural change was the most important, and the most complicated task to accomplish. Speaking about the way Gerstner chose to conduct the change is surely a weakness that he expressed, and it affected the unsteady effect that resulted in lack of immediate action of the change.

First of all, the guidelines were too vague, the deadlines were not established, which directly eliminated any responsibility for the task accomplishment and reduced the responsibility for the change. It would be more possible to accomplish if Gerstner initiated the change taking into consideration the world experience of profound world companies:

“Organizations over the past few decades have been moving towards flatter, leaner and more responsive structures. This has undoubtedly made many of them efficient, in terms of their responsiveness to market demands” (Paton and Calman 40).

The responsiveness is the key to success of a modern company, which is completely missing in the IBM structure. The IBM employees have been too stable and successful to worry about winning new customers and preserving the old ones, so they failed to adapt to the changing market when other companies did that.

The Possible Alternative Actions for Gerstner

Gerstner made one strategic mistake – he initiated the change and tried to communicate the essence of the change to employees, but he failed to conduct preliminary work on the communication of the change necessity, of its main implications and reasons as well as each stage of practical fulfillment of the stipulated task. To conduct organizational change one should have change agents who will keep track and initiate the inspiration within the company. The cultural change cannot be imposed from the outside – it can only be generated from the inside. So the actions that Gerstner should have taken can be found in the example given by Robbins and Judge as a company with a successful modern culture, Starbucks:

“Starbucks relies on its employees to share customer insights with managers and takes product development teams on inspirational field trips to view customer behavior, local cultures, and fashion trends” (634).

This example is highly eloquent as to the range of possible actions that can help the business rise after a stage of decline, so Gerstner should have seriously thought about the power of human resources much more and should have given a much greater role, responsibility and choice to the employees.

Works Cited

Paton, Rob, and James McCalman. Change management: a guide to effective implementation. SAGE Publications Ltd, 2008.

Robbins, Stephen P., and Timothy A. Judge. Organizational Behavior. Prentice Hall, 2008.