Change Analysis

Topics: Yahoo!, Louis V. Gerstner, Jr., Change management Pages: 6 (2012 words) Published: January 19, 2014
Change Analysis
Management organizational change helps the organization to progress and assumed the realization of three situations: First, it can facilitate or inhibit change in an organization. Second, it attempts to change organizational culture because the current culture holds back the fulfillment of corporate goals. Third, it demonstrated how environmental and internal forces can stimulate the need for organization change. IBM is unique well-known software firms recognized in the world of technology. This corporation is celebrated for its mixture of a hardware maker and services provider. Moreover IBM has also expanded its software offerings in recent years. In the other hand, Yahoo is considered to be the powerful marketing company. Yahoo is known for its web portal, search engine, yahoo finance, yahoo answers, yahoo mail, and yahoo directory. There are successful organizational change example at both IBM and Yahoo, but these organizational changes have differences and similarities between how the change impacted the companies, and who it impacted. Organizational Change of IBM

The IBM’s 1993 organizational change will be the topic of discussion in this research. “When Gerstner became CEO of IBM in 1993, its shares had fallen to an all-time low and the company was on the verge of collapse. He was recruited because of his successful management of RJR Nabisco and American Express. Gerstner had no background in IT but during his seven-year chairmanship he transformed the firms into one of the leading forces of the computer age.”(Reid, 2012) The IBM’s 1993 organizational change impacted their stakeholders and its business strategy. IBM’s stakeholders were seriously impacted during the 1993 organizational change, because this organizational change reduced workforce to reload the company's cash. When Louis V. Gerstner was selected as new CEO, “Gerstner said he would slash IBM's work force by an additional 35,000 workers, which would reduce the company's work force to around 225,000 employees in 1995--down from a peak of 406,000 in 1985.” (Gilman, 1993) Investors celebrated the downsizing statement, and the company's stock up $3.25 a share, to $45.625. In the other hand, employee’s moral was suffering from prior workforce reductions. Gerstner tried to restore workers confidence, declaring that this latest big cutback was the last to stabilize the company. IBM 1993’s CEO transition put pressure on how a firm conducts its business and its relationships with customers, suppliers, and employees. During IBM’s 1993 organizational change, the company was able to establish a real winning business strategy, and this strategy established today’s IBM success. IBM’s vision is a combination of a hardware maker and services provider. Gerstner was a previous major customer of IBM, and he had an intuitive understanding of what was wrong about the company’s relationship with its customers and with its position in the rapidly changing marketplace. Gerstner did not communicate his vision to the massive corporation as first objective of his CEO selection, instant he focus on the essential and immediate tasks at hand. When he felt the company was ready to hear his major strategic shifts, Gerstner was able to impulse this business strategy that crafted a business model that shed commodity businesses and focused on high-margin opportunities. Organizational Change of Yahoo

In the other hand Yahoo, Scott Thompson’s organizational change will be the topic of discussion in this research. Effective January 9, 2012, Yahoo announced that “has appointed president of PayPal Scott Thompson as its CEO to try to restore the “momentum” needed for the business to return to growth. Thompson replaces Carol Bartz, who was ousted from the company in September after failing to revive revenues to their peaks of the mid-00s. Also a board member, Thompson will oversee Yahoo!’s ongoing strategic review to assess whether the company...
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