Read the article Cracking the Code on Change. Management Essay

Cracking the Code on Change
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Cracking the Code on Change
Changes in the business environment have greatly affected how companies conduct their businesses. The case of Ford and IBM reveal the same story as both companies have been greatly affected by the new economy. The traditional strategies implemented by the two companies failed to yield similar results, and because of this, the companies were forced to implement new strategies to help them cope with the changes in the business environment. According to Nohria and Beer (2000), the two theories of change used by organizations are theory E, and O. Theory O suggests that change is dependent on the company’s capabilities, whereas theory E suggests the use of means such as restructuring and downsizing (Nohria & Beer, 2000). In the case of Ford, the company has experienced great losses partly because of the tariffs imposed by the current president of the United States. As a means of saving the company, Ford CEO Jim Hackett is planning on implementing theory E of change. Out of the total 202,000 employees at the company, Ford plans on laying off approximately 24,000 staff members (Kelleher, 2018).
On the other hand, IBM implemented theory O of change to help the company to achieve its breakthrough. Theory O is a soft approach to change which is focused on developing human capital capabilities and organizational culture by effecting organizational and individual learning (Nohria & Beer, 2000). IBM’s strategy provides human focus, which makes it possible for the company to implement factors such as increased productivity and substantive change, which enables organizational transformation.
Nohria and Beer (2000) explain that both theories have their advantages and drawbacks. For instance, the application of theory E in Ford would act as an effective strategy to maximize economic value; however, employees at the company would be less...