I am reviewing an article of organizational change initiative by General Electric. When John Flannery was selected as the CEO of the company’s subsidiary in India, he called for a big change in its organizational structure. Before that, like any other branch of multinational companies, GE India worked using a matrix structure. According to it, the subsidiary’s leaders reported to their bosses directly at their company’s headquarters. However, under the new system introduced by Flannery, the matrix system was abolished and the leaders in the subsidiary reported to the head of their respective subsidiary. According to Flannery, this transition was manageable. He however acknowledged that total transformation of an organization is a big challenge.
Flannery studied finance and before he came to India, he was the CEO of GE Capital-Asia-Pacific. In order to conduct this organization change, he had an uphill task of convincing all the departmental heads in India on why they should report to him. In India, Flannery is the only official linked directly to the GE bosses at the headquarters. The bosses are worried that this trend set by Flannery in India will be embraced by other subsidiaries across the world making the heads at the headquarters loose vertical control in those countries.
This organizational change initiative was embraced in different countries where GE had subsidiaries, such as Germany. However, in some countries like China, the old matrix system was maintained.
The success of this organizational change introduced by Flannery was beneficial to the GE Company for various reasons. First, the change enhanced performance optimization of the subsidiary through performance and effort towards an ideal state. Second, the organization change was an appropriate reaction to the constantly changing business environment. Third, abolishment of the matrix system created a progressive CEO who was responsible for a whole subsidiary of the company (Haveman, Russo & Meyer, 2001). Other equally successesful cases of the GE organizational change were enhancement of effective and quick decision making processes between the subsidiary and the headquarters. This was a result of power decentralization. The matrix method relied on power centralization for the functioning of the organization.
The failures of the GE organizational changes cannot be underestimated. First, the changes were a big challenge to implement. Second, there was loss in the prestige that came with reporting to the headquarters for the departmental heads in the subsidiaries.
The two main strategies of change are revolutionary and evolutionary. Flannery adopted the evolutionary strategy since it is gradual and specific. It focuses on a narrow goal. It was mainly important to make improvements continuously so as to adjust to changes in the environment (George, & Jones, 2007). Its success lied in its ability to be used when the existing management operations could not fulfill the environmental demand. Its demerit is the fact that significant changes have to be made in the shortest time possible to keep the organization going.
Images of Managing Change
There are six different perspectives of change management. They include director, navigator, interpreter, coach, caretaker and nurturer. Change management leaded by director relies on the image set by the management in control and the expected change outcomes. The assumption in this image is that change has to be implemented in order to enable an organization to survive in the competitive industry. This is because change is regarded as a mode of strategic decision making. If the organization’s management resolves that realigning the regional territories is beneficial, the results will be possitive. This will yield better outcomes and efficiencies. Change managers in this perspective have a firm believe that by following certain steps, changes conducted will be satisfying (Palmer et al., 2009).
The other form of image of change management is that with the coach as the change manager. Organizations believe that with the coach implementing the change, the organization’s capabilities can be shaped in a specific way. For instance, coach of a football team as the change manager can change his team’s capability to make it successful in a competition. Instead of dictating the style of play and the steps to be followed, coaches rely on improving the values and skills amongst the team members in order to achieve the desired change in the team (Palmer et al., 2009).
There are several outcomes associated with images of managing change. They include controlling, shaping, intended changes, partially intended changes and unintended changes. In the case of the two images I have selected, directors as change managers are affected by two change outcomes – controlling activities and intended changes while coaches are affected by shaping capabilities and intended changes.
In comparing and contrasting the roles that these images bring in the change process, we will evaluate the director and the coach as the image change managers. First, in the case of the director, change is based on the image of management as controlling and in the change outcomes becoming achievable. On the other hand, for coaches it relies on the correct skills and training presumed to be the best for achieving a specific desired outcome. Second, for directors change is supported by two elements – the contingency theory and the n step models. On the other hand, for coaches it is related to the OD approach.
The different images are similar in the fact that they all highlight different assumptions made by the change managers, elaborate on different perspectives available to the change managers and they also draw attention to the existing images of change in organization.