Module 1 – Case

Organizational Resistance to Change (and Why Good Companies Fail)

Assignment Overview

In the Module 1 Case Assignment, you will write a 5- to 6-page paper in which you analyze in-depth the reasons that good companies fail due to their reluctance to respond to changes in the internal company and the external environment.

Case Assignment

To begin the Module 1 Case assignment, read the following article:

Butt, J., & Ivanov, S. (2017). Study of a large office supply retail organization: How good companies slowly go out of business. International Journal of Organizational Innovation, 9(4), 100-116. Retrieved from EBSCO – Business Source Complete.

After you read the foregoing article, visit the library, and consult IBISWorld (download the IBISWorld Academic Overview). Search for “Office Supply Stores in the U.S.” Scan through the various pages associated with the large office supply retail industry, noting key areas of opportunity, key areas required for success, and key threats. Then, in a well-written 5- to 6-page paper (not including Cover and References pages), respond to the following:

1. Based on your research, what are the key drivers for success in the large office supply store industry? This section should be at least 2 pages in length.
2. What were the reasons for the failure of the Fortune 500 office supply company as discussed in the Butt and Ivanov (2017) journal article? Are these reasons consistent with the reasons for organizational failure as identified by Sheth & Sisodia (2005)? What other reasons, if any, have you identified? Are there any practical difficulties that served as barriers to needed organizational change? (This section should be at least 2 pages in length).
3. What recommendations would you have given the leadership of the foregoing Fortune 500 company relative to how the company may have avoided organizational failure? (This section should also be at least 2 pages in length).
4. Conclude your paper by identifying the key lessons you have learned from Module 1 (as taken from both the Background materials and the Module 1 Case assignment) concerning the need for ongoing adaptation on the part of the organization and the need to avoid organizational inertia and resistance to change. This section should be at least 1 page in length.

Assignment Expectations

1. Minimum length requirements for the Module 1 Case assignment are 5–6 pages (not including Cover and Reference pages).
2. Be sure to cite your sources using APA Style.

Module 1 – SLP

Organizational Resistance to Change (and Why Good Companies Fail)

For the Module 1 SLP, we will continue our research into why good organizations resist change. To this extent, please visit the library, and find the following text:

Brown, B. B. (2002). Easy step by step guide to managing change. Havant: Crimson eBooks. Retrieved from EBSCO eBook Collection.

Read the chapter entitled “Organization barriers to change.” In this chapter, you will note several key barriers that cause organizations to resist needed change. Namely, these are:

1. Unclear objectives;
2. Inappropriate structures; and
3. Poor communications.

It is important to note the author’s emphasis that any one of these factors create organization-wide resistance to change because they have become part of the organization’s status quo.

After reading the chapter “Organization barriers to change,” respond to the following in a well-written, 3-4-page paper:

Part One: Description

Think of an experience you have had with an organization that failed to change when change was needed. Describe the change and explain why the organizational change you identify was needed. Describe what negative consequences (or outcomes) resulted from the organization’s failure to enact the needed change. What were the costs to the organization (e.g., poor employee morale, loss of customers, poor company image, financial losses, etc.)?

Part Two: Application and Analysis

Apply Brown’s (2002) perspective to demonstrate how unclear objectives, inappropriate structures, or poor communications contributed to the resistance to change in this organization. In other words, explain how Brown helps us understand why the barrier you have selected caused organization-wide resistance to needed change (keep in mind that we are focused on organization-wide – and not on individual – resistance to change).

Part Three:  Solution and Recommendations

Finally, as a leader, what could you have done to avoid or minimize this resistance to change? Be specific, and be sure that your recommended actions target the barrier you identified in Part Two (e.g. unclear objectives, inappropriate structures, or poor communications). Be sure that you “connect the dots” by making a clear argument regarding how these specific recommendations would have helped the organization implement the needed change without resistance.    If the resistance to change is ongoing, what suggestions do you have for resolving this problem going forward?

SLP Assignment Expectations

1. Minimum length requirements for the Module 1 SLP assignment are 3–4 pages (not including Cover and Reference pages).
2. Be sure to cite your sources using APA Style.

Module 1 – Background

Organizational Resistance to Change (and Why Good Companies Fail)

Attribution:

In this course, we will be partly using the Focusing on Organizational Change text authored by William Judge. The Attribution–NonCommercial–ShareAlike license for use of this text may be viewed here: https://creativecommons.org/licenses/by-nc-sa/3.0/. No changes have been made to the text. The text may be downloaded in PDF, Kindle, e-pub, or .mobi format at the following website: http://www.oercommons.org/courses/focusing-on-organizational-change/view

Required Reading

Please read pages 13–17 of the Focusing on Organizational Change text, taking particular note of why organizations must respond to changing environmental pressures, but why organizations are so often rendered incapable of bringing about the very change that is necessary.

Judge, W. (n.d.). Focusing on organizational change. Retrieved from http://www.oercommons.org/courses/focusing-on-organizational-change/view

While the following article is dated, it is included here because it provides interesting insight as to why even the very best of organizations fail. While the reasons for failure are numerous and exceedingly complex, many have one commonality—and that is their failure to change. Note that the causes of failure may be internal to the company and/or they may be external to the company. Also, pay close attention to Figure 2, and the notion of the “Adaptive” company as contrasted with Captive, Legacy, and Arrogant types of companies.

Sheth, J., & Sisodia, R. (2005). Why good companies fail. European Business Forum, 22, 24-30. Retrieved from ProQuest.

If you need help related to the retrieval of articles in the library, be sure to review the following attachment: How to Find an Article in the Online Library from Background Readings

Consider the following diagram that depicts how (collective) organization-wide resistance to change might cause an organization to fail. In this diagram, organizational apathy towards the use of new technology that has been widely adopted by other competitors in the industry has caused decreased overall productivity. In its effort to quickly improve productivity, increased pressure is placed on employees to perform at higher levels, which causes poor morale. In turn, customers recognize the downturn in the quality of the company’s product and/or service, and as a result, the organization experiences revenue shortfalls and falling profits. Expenses need to be cut, and the largest expense (salaries) are cut, resulting in permanent layoffs. This results in further declines in employee morale, and continued reductions in employee productivity.  Because of its dwindling profits, the company can no longer afford to invest in the new technologies that are so desperately needed to restore its productivity (and former profitability). As this downward spiral continues, the inevitable happens: The organization that was once a formidable industry competitor fails.

Once an innovative, and exceptionally profitable company, Blockbuster failed to adapt to changes in the environment. Watch the following video explaining why Blockbuster failed:

Company Man. (2017, Jun 21). The decline of Blockbuster: What happened? [Video file]. Retrieved from https://www.youtube.com/watch?v=5sMXR7rK40U

Here’s another interesting video concerning the decline of Kmart. As you watch this video, consider key areas in which Kmart failed to change. Was it hubris, oversight, or just plain apathy that caused Kmart’s ills?

Company Man. (2017, May 15). The decline of Kmart: What happened? [Video file]. Retrieved from https://www.youtube.com/watch?v=1__Qg1toSSs

The following article by Donald Sull is also a seminal article from the Harvard Business Review on why good companies fail. Note Sull’s observations that organizations often fail not because they neglected to identify an emerging problem, and not because they failed to act on resolving the problem, but because of “active inertia”—that is, “This solution worked well for us in the past; therefore, it is sure to work again.”

Sull, D. (1999, July/ August). Why good companies go bad. Harvard Business Review. Retrieved from https://hbr.org/1999/07/why-good-companies-go-bad

Optional Reading

For an interesting read on why change efforts often fail, be sure to peruse Chapter 1 (entitled “Riding the Coaster”) of Bill Pasmore’s book. Of particular interest to us in Module 1 is Pasmore’s discussion of several (very interesting) organizational change failures. Take particular note of the section related to the failed DaimlerChrysler and AOL-TimeWarner mergers (both of which Pasmore quips as the “sensational mergers that failed sensationally”):

Pasmore, B. (2015). Leading continuous change. Oakland: Berrett-Koehler Publishers. Retrieved from EBSCO—eBook Collection.

In the following Forbes article, leadership clarity and alignment are discussed in the context of change management. Note the author’s mention of how organizational change is slowed due to internal politics:

Llopis, G. (2014, Jun 30). Change management requires leadership clarity and alignment. Forbes. Retrieved from https://www.forbes.com/sites/glennllopis/2014/06/30/change-management-requires-leadership-clarity-and-alignment/#468dc1813e3c