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Introduction
The business sector has undergone tremendous changes due to the emergence of new technologies and the globalization effect. Change management is therefore very essential in ensuring that companies maintain professionalism and a competitive advantage over its competitors.
Companies can only become effective through proper planning when implementing organizational change (Silverman, 1996). Internal and external changes are very necessary when a company wants to improve its present and future state. A company can only remain relevant in a competitive market by involving all the stakeholders in the change process (Silverman, 1996).
Companies should always have a realistic plan regardless of the scope of changes it intents to undertake. Organizational change managers have a difficult task of convincing everyone within the organization to embrace change. The change process should involve specialists for a comprehensive execution of all the change projects (Silverman, 1996).
The external and internal forces that drive change should be detected as early as possible for a company to benefit from the available opportunities and at the same time control impending market threats.
This paper will highlight the use of Kotters 8-step approach in implementing organizational change in companies like Microsoft Corporation. Effective implementation of organizational change is essential in the present and future success of an organization.
Company Overview
Microsoft Corporation is a multinational company in America that designs and sells computer software. The companys headquarters are stationed in Redmond, Washington and is among the best companies in the world when it comes to manufacturing and licensing of computer products and services (Hill, 2007). The company was founded in April 4, 1975 by Bill Gates and his long-term friend known as Paul Allen.
Microsoft enjoys high revenues because of its reputation in software making. Microsoft has continued to dominate the software market since mid-1980s. Microsoft Windows and MS-DOS are among the most popular operating systems from Microsoft (Hill, 2007).
The company has been involved in a number of corporate acquisitions as a way of diversifying its business. In addition to operating systems, the company has created quite a number of application products such as Microsoft Office, video games and other digital products (Hill, 2007).
Microsoft has undergone tremendous expansion since it was founded with the company having up to five product divisions by 2010 (Hill, 2007). Microsoft is a publicly traded company under the leadership of a board of directors whose members are elected during the annual general meeting by the company shareholders.
In addition to the board of directors, the company has five committees within the board that carry out specific functions within the company (Hill, 2007). Microsoft Corporation went public for the first time in 1986 when it launched its initial public offering but offered a dividend for the first time in 2003. The company has been sued several times because of its use of unfair business tactics that extinguish competition.
Microsoft believes in creating unique features that meet customer needs. The value of Microsofts assets is approximately $ 41 billion with a corporate bond of $ 2.25 billion (Hill, 2007). The year 2011 was not good for Microsoft because its quarterly profits went down. The decline in revenues was brought about low sales in personal computer sales and Microsofts Online Services Division.
The emergence of Apple Inc. and some costly acquisitions are among the reasons why Microsoft has been incurring losses in the last two years (Hill, 2007). The decision by Microsoft to acquire an advertising company known as aQuantive in 2007 was the beginning of Microsofts financial woes because the acquired company had a lot of problems.
Diagnosis
Despite the tremendous success that Microsoft has enjoyed over the years, the company has its fare share of challenges. The value of Microsofts stock has been slipping since 2004 because there is stiff competition from other industry players such as Linux, Apple and Google (Hill, 2007).
New versions of application software such as Office and Windows have recorded small amount of sales in the last five years and this has reduced the companys revenues.
A thorough diagnosis of Microsoft shows some of the areas that need to undergo organizational change for the company to recover from the current crisis (Hill, 2007). To begin with, Microsoft is a company that needs to have a business model that promotes innovation. Microsoft has a huge bureaucracy that has continued to hamper innovation at the company.
Innovation teams should be given the power to work on their products from the beginning to the end without interference and in-fighting. Microsoft does not have a clear definition of what the company does and this has left some customers very confused (Hill, 2007).
Every product and service is associated with Microsoft is branded by Windows and Office which makes the company appear as if it does not have any kind of diversity. The monopoly tag makes it difficult for Microsoft to reclaim the support of its customers. The company should adopt a strategy where each product or service has its own unique brand (Hill, 2007).
Microsoft as a company no longer exhibits the innovation spark it used to have even with the development of the Surface tablet (Hill, 2007). The company is no longer a market leader when it comes to innovation and has been surpassed by companies such as Apple Inc. and Google.
As a company that has been in existence for quite some time, people should always be waiting for Microsofts next innovation. Microsoft is not coming up with new concepts to encourage hardware manufacturers to continue using the companys software. Microsofts CEO Steve Ballmer spends most of his time engaging in meaningless verbal wars with Apple rather than focusing on improving the quality of Microsofts products.
Microsoft Corporation lacks a visionary leader who can pick up from where Bill Gates left it after resigning from the position of the companys Chief Executive Officer (Hill, 2007).
Most of Microsofts products are not compatible and therefore makes it difficult to install more than one of its products on the same personal computer due to bloat problems. Microsoft underestimated its competitors and that is the reason why the companys fortunes have been dwindling in recent years (Hill, 2007).
Kotters 8-Step Approach
Kotters 8-step change model is one of the best approaches when it comes to the successful implementation of organizational change (Kotter, 1996). A company such as Microsoft needs to introduce organizational change for it to remain relevant in the software market. The process of introducing organizational change is not always an easy one regardless of whether the changes are small-scale or large-scale.
Kotter was a change expert whose eight-step change process is regarded as one of the best in leading and managing organizational change (Kotter, 1996). The first step in Kotters approach is to create a sense of urgency by making sure that all the stakeholders within the organization understand the need for change.
Urgency can be created when leaders take the initiative of having honest discussions with everyone about the threats and opportunities that the company faces (Kotter, 1996). According to Kotter, 75 percent of a companys top leadership should agree with the concept of organizational change for the process to be successful.
It is also important for a company to prepare well for the change process to avoid further loses. A company like Microsoft is in bad state and therefore its leaders should show some urgency when it comes to changing certain aspects of their business (Kotter, 1996).
The second step of Kotters model involves forming a coalition of change within the organization (Kotter, 1996). All the key people in the organization must be involved in the change process through strong and effective leadership. The coalition of change should involve influential leaders within the organization to continue creating the sense of urgency needed for change.
Team building is also done during the second step to bring out the best from the leaders in the change coalition (Kotter, 1996). It is always important for change leaders to work as a team. A change coalition should include members from different departments within the organization to demonstrate inclusiveness (Kotter, 1996).
All the weak areas within the change process should be identified and corrected as soon as possible before the process of implementing organizational change begins.
The third step in Kotters approach of change implementation encourages change leaders to come up with a clear vision for change (Kotter, 1996). All the ideas generated by members of the change coalition should be harmonized to come with an overall vision that all the stakeholders within the organization can be able to understand.
A change leader should ensure that all the people involved in change implementation have a clear vision of what the company is trying to achieve. Organizational change should be guided by specific values that the company intents to promote (Kotter, 1996).
The change coalition should then come up with a strategy that will help it to convert its vision into actual change. Every member in the change coalition should be upbeat about change for them to inspire the rest of the people.
The fourth step is for the leaders to communicate their vision for change to other members of the organization (Kotter, 1996). The success of an organization depends on what the leaders do with their vision. The change message should be communicated on a regular basis and powerfully until the moment when all the activities done within the organization reflect its vision.
The managers should be able to make important decisions based on the companys vision (Kotter, 1996). Every person within the organization should be reminded about the companys vision on a daily basis so that the vision sticks in everyones minds. At this stage, the change leaders should address all the fears and anxieties that some members may be having concerning change.
The change vision should be applied in all the operations in the organization especially those regarding training and performance (Kotter, 1996). The most important thing is for the leaders in the coalition to show a good example to the rest of the people on all the issues regarding organizational change. The fifth step in Kotters approach involves the removal of the change obstacles from the way.
The obstacles may be those people who are resisting change or the old structures and processes. The change leaders should put new structures and processes in place and eliminate all the change barriers (Kotter, 1996).
The management can encourage employees to participate in the change process by rewarding those who have been exemplary in promoting change within the organization. At this stage, it is also necessary to hire people with the ability to foster change. The change leaders should encourage those resisting change and help them understand the need for change (Kotter, 1996).
The sixth step in Kotters model of implementing change is to create short-term wins that can motivate the staff (Kotter, 1996). The staff should see the immediate results of change to erase any kind of negative thoughts from their minds. All the stakeholders should experience the fruits of change as soon as possible for it to be justified. Critics of change can only be silenced when the organization enjoys a taste of victory.
This can only be achieved through the creation of short-term goals which are achievable. Change leaders should work hard to ensure that all the short-term goals are achieved within the required time. The short-term projects should be accomplished without the help of the change critics as a way of challenging them.
Change leaders should also avoid expensive projects during the initial stages of change implementation in order to effectively justify all the initial investments (Kotter, 1996).
The change initiative can be messed up if the first goal fails. It is therefore important to critically analyze targets to determine whether they can be reached or not. The people who help the leadership to reach the change targets should constantly be rewarded as an appreciation of their efforts to promote change (Kotter, 1996).
The seventh step in Kottlers approach is to build on the change that has already been achieved during the initial stages (Kotter, 1996). Change leaders should not make the mistake of declaring victory before the entire process is complete. According to Kotter, change projects are likely to fail if change leaders become complacent after initial victories.
Change is a long-term process that requires patience and determination until all the projects are accomplished (Kotter, 1996). Initial victories should only serve as a platform for accomplishing other projects. Change is a gradual process and any victory should be a learning experience for all the people involved in the change process.
The change momentum should be maintained through continuous improvement on all the areas that have a weakness. Change agents should be recruited where necessary to bring in fresh ideas that can facilitate change (Kotter, 1996). The eighth and final step of Kotters model of change implementation is anchoring the changes in corporate culture.
All the aspects of the organization should reflect all the values brought about by change. Change should be part of the organizational culture and should remain sustainable even if the change leaders leave the company.
Conclusion
Organizations whose performance is not impressive should adopt organizational change as a means of revival. The approach used to implement change determines how successful the change process will be. Kotters eight-step approach is among the most effective models of implementing change.
A company like Microsoft that is not performing well at the moment needs to implement some changes in its functions and operations for it to bounce back.
The company needs some radical changes to be able to compete with companies like Apple. Microsoft needs to adopt some changes when it comes to innovation and marketing in order to regain its former glory. Kotters model is the most suitable for a multinational company like Microsoft.
References
Hill, C. (2007). Strategic management: An integrated approach. New York, NY: Cengage Learning.
Kotter, J. (1996). Leading change. New York, NY: McGraw-Hill Companies.
Siverman, D. (1996). Facilitating organizational change. New York, NY: University Press of America.
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