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Leadership And Change Management

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Leadership and Change Management Research

MBA/520 Transformational Leadership

February 28, 2008

Leadership and Change Management Research

The learning organization proactively creates, acquires, and transfers knowledge and that changes behavior on the basis of new knowledge and insights. Learning organizations actively try to infuse their organizations with new ideas and information. This is accomplished by constantly scanning external environments, hiring new talent and expertise when needed, and by devoting significant resources to train and develop their employees. They also strive to reduce structural, process, and interpersonal barriers to the sharing of information, ideas and knowledge among organizational members. As any carpenter knows, different jobs require different tools. When the situation changes significantly, according to contingency thinking, a different type of organization may be appropriate. In some cases, the structure, or organizational chart, is the first tool to change.

To the organization theorists, organization charts reveal the basic dimensions of organizational structure such as hierarchy of authority, division of labor, spans of control and line/staff positions. Sensing the changes surrounding us are not mere trends, but the workings of large, unruly forces; the spread of information technology and computer networks; the dismantling of hierarchy, the structure that has essentially organized work since the mid-19th century. To demonstrate the diverse practices of change, companies have been benchmarked that have adopted certain philosophies of leadership in managing change. This paper will address selected change models within organizations, identify leadership styles in the change management process and in given situations, evaluate the influence of leadership on management practices, analyze factors that contribute to a long-term commitment to change and appraise future leadership challenges (Kreitner, 2004).

Implications of Leadership Styles on the Change Management Process

The vision at Apple Computer seemed to have clouded in the early 1980’s. Questions were raised about managerial judgment, product decisions and basic strategies at a company that grew from a tiny start-up operation in 1976 into one of America's biggest and most profitable companies. Top managers were fleeing, profits were falling and the Macintosh computer lost some of the luster. Budget cuts and sagging morale only exacerbate the problem. Steve Jobs, founder, was a nonlinear leader. As a transactional leader, Jobs kept meetings running past midnight, sent out lengthy faxes, and called new meetings at 7am. In 1985, the Board of Directors lost patience and stripped Jobs of all operational responsibilities. Apple’s project bloat and empire-building of the early 1990s was a strategy which backfired. Jobs’ inability to manage the product line was apparent (Markoff, 1989).

The group that developed the Macintosh computer broke off almost completely from the rest of Apple. While the separation resulted in a significant breakthrough product, an organizational shift was created which took considerable time to heal and led John Sculley to reorganize Apple into a more conventionally functional hierarchy (Senge, 1990). The company founded in a garage turned, in 1983, to John Sculley, president of Pepsico Inc. and a master at marketing and management, to help it make the leap from a small technology company to a blue-chip giant (Markoff, 1989).

Sculley was successful in implementing the transformational leadership style, guiding Apple from $983 million in revenues in 1983 to $4 billion in 1988. Sculley replaced the company's traditional top-down edifice with a streamlined one designed to bring Apple closer to customers and to cut layers of management, which he called a barrier to quick decision-making and innovation. To integrate some of Apple's innovative, pioneering spirit into the new organization, the company adopted a strategy, called ''New Enterprise,'' to create the decentralized Apple of the 1990's. About 600 middle managers produced the reorganization intended to move Apple closer to Sculley's model for a 21st-century corporation: one in which highly autonomous small groups work together closely via electronic computer and video communications systems (Markoff, 1989).

Despite Sculley's vision, the reorganization also represented more fundamental political realities, which for a handful of top executives means jockeying for positions as Sculley's successor (Markoff, 1989). As with CrysTel Communications, middle management and executives encountered similar political realities. Both companies endured the transition from transactional to transformational leadership. Regular administrative and technological changes required CrysTel to employ a strategic transformation. Developing a learning culture and promoting innovation can help the organization sustain change. Maintaining a learning culture by identifying possible resistance, implementing behavioral action plans, and evaluating implemented behavior was essential for smooth transitions at CrysTel and Apple (Kreitner, 2004).

Leadership Styles for Given Situations

At CrysTel, the CEO was approached with a request to restructure the management team by changing some of the members. At Reed’s, CEO Chris Reed was also approached in 1991 in the same manner. However, he was expected to give up a third of his company (Klein, 2007). The only major difference is what they did after saying �no’. At CrysTel, the CEO went ahead with the IPO and refused to give up any of his team. He worked through the difficulties, retained and managed his team, and moved forward with the goals they had outlined for the transformational in leadership and building a sustaining culture.

At Reed’s, Inc., Chris Reed tabled the idea of going public and decided to conduct a SCOR, which is a “small corporate offering registration” that involves stringing neck ties around its bottles announcing to the customers that the company is raising money. SCOR is nicknamed “bootstrap[ing] the firm” (Klein, 2007, p. 2). While this process worked to bring in many more customers and owner-advocates, the company was still not seeing the increase in profits that would



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