Applying kotter's model

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1 Organizational Change Management: An Introduction

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Learning Objectives

After reading this chapter, you should be able to do the following:

1. Explain planned organizational change and analyze Kotter’s eight-step change process.

2. Compare and contrast the �ields of organizational development and change management.

3. Examine Lewin’s force-�ield analysis and how it can be used to overcome resistance to change.

4. Describe the forces for change and organizational responses to these forces.

5. Summarize the various types and models of organizational change.

6. Differentiate between the balanced scorecard, contingency alignment framework, and stakeholder approach.

Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes—it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm.

—Peter Drucker

The Chinese international commerce company Alibaba was founded in 1999 by Jack Ma, a visionary businessman with a knack for change in his DNA. He launched Alibaba.com—an e-commerce platform that focused on small export �irms—from his Hangzhou apartment. It has since grown to an estimated market cap of $223 billion and has more than 24,000 employees (Alibaba Group, n.d.; China Internet Watch Team, 2014; Pearlman, 2014; Reeves, Zeng, & Venjara, 2015).

This company is a good example of how organizations in complex, uncertain environments must continually change to remain competitive. This is especially true of technology-driven �irms that rapidly expand in size and scope to gain and maintain market dominance. Alibaba, like Amazon, Google, and Net�lix, uses automatic algorithms (a decision-making form of arti�icial intelligence) to routinely change, adjust, and leverage product choices for millions of customers in real time, a process known as self-tuning (Reeves et al., 2015). The company then extends this type of practice into its business plan by utilizing current consumer behavior to in�luence its vision, strategy, structure, and culture, as well as product

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offerings. As researchers Reeves et al. (2015) stated, “Self-tuning is related to the concepts of agility (rapid adjustment), adaptation (learning through trial and error), and ambidexterity (balancing exploration and exploitation)” (p. 78).

A quick examination of Alibaba’s brief history demonstrates how the company has used self-tuning concepts to adjust to—and even create— customer demand. The company moves quickly to diversify its product offerings and markets by creating spin-off companies. This practice characterizes Alibaba’s successful change and evolution—at least to date. For example, in 2003 Alibaba launched Taobao Marketplace to test China’s consumer demand. It then rapidly created yet another spin-off, Aliwangwang, in 2004 that enabled instant messaging on the Taobao website. Enlarging the company’s business model, Alipay was also started in 2004, creating an infrastructure that experimented with and strengthened consumer con�idence in online business transactions. It worked. In 2008 Taobao was renamed TMall, which included a business-to- customer platform and e-commerce ecosystem.

In 2009 Alibaba Cloud Computing was started to keep up with bleeding edge storage and retrieval technology. AliExpress was launched in 2010, which moved the company into a global position and provided it with an online international consumer website. In 2011 TMall and eTao (a shopping comparison website) became independent platforms in order to enable Alibaba to explore the future of customer demand and e- commerce in China. Cainiao, China Smart Logistics, was then launched in 2013, further enlarging the company’s scope from e-commerce to emphasizing infrastructure. In 2014 Ant Financial Services Group was formed, which further enlarged the scope of the company. In 2015 Alibaba’s innovative adaptation to Chinese customers surpassed Baidu’s (the Chinese version of Facebook) mobile ad revenue in China.

The company’s leadership has and is likely to continue to balance experimentation with innovation and real-time data algorithmic analysis to form self-adjusting organizational systems ( for example, vision, strategy, culture, business models, and product offerings).

Critical-Thinking Questions

1. Traditionally and currently, planned organizational change has been characterized by solving problems or crises that have arisen. Alibaba and other industry-leading technology-driven �irms have employed organizational change to gain and expand market share and dominance. Brie�ly explain how Alibaba has used organizational change, and offer a few examples.

2. How would you feel about working within a fast-paced, ever-evolving company like Net�lix, Alibaba, or Google? Explain your reasoning.

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