Article Review: Cracking the Code of Change

By: Suman Sourav

2016PGP180
The starting of the article talks about the brutal fact that 70% of all initiatives like
Installing new technology, downsizing, restructuring, or trying to change
corporate culture are likely to fail because managers rush to change their
organizations which is a very true statement with accordance to organizational
change. Managers end up immersing themselves in an alphabet soup of
initiatives to implement a quick change, but ultimately it takes a toll on both
human and economic activity. Here writer talks about the revolutionary change
that every manager wants and rightly states the statics and reasons which push
this kind of managers into taking their organization to downhill.
The article also talks about the business change stating that each business
change is unique but each change is a variant of one of two archetypes and
these archetypes are based on unconscious assumptions by senior executive and
consultants. Then it talks about Theory E and Theory O; Theory E is based upon
the economic value and Theory O is based upon the organizational capability.
In Theory E change strategy, shareholder value is the only legitimate concern,
and it is more popular in the US. Theory O approach is to develop corporate
culture and human capability through individual and organizational learning.
Companies that enact this strategy have a strong, long-held, commitment-based
psychological contract with their employees. I think as a developed nation the US
might only think about their shareholders because it motivates employees
through financial incentives. Then article talks about the basic differences
between Theory E and Theory and O on the dimensions of changes like goals,
leadership, focus, process, and reward system.
The article then talks about how the organization tries to combine these two
theories which leave organization worse off; the employees lose any trust for the
company and management whatsoever. Also, if only Theory E is applied,
companies lose the commitment, the coordination, the communication, and the
creativity needed for sustained competitive advantage and similarly if only
Theory O is applied, the company does not gain economic value beyond the
gains in performance measures. So, the article suggests that these theories can
be applied in sequence like laying off the employees (Theory E) and then cut
down the organizational hierarchy and improve communication (Theory O). But
doing this takes time and sometimes produce worst results. Instead of doing
sequencing or mixing theories, the company can implement both Theory E and
Theory O at the same time. This will become a balancing act between initiating
actions that follow one theory and then contradict that theory. The article also
suggests that company can focus on hard and soft changes simultaneously, like
hard changes such as corporate structure and systems can be changed while
making soft changes to the dynamic of the corporate workplace and its culture.
The company should always look for spontaneity rather than following strict
norms. The company should use a variety of incentives to encourage good work
within the corporate structure rather than paying incentives to managers.
Rather than rely on a single form of incentives that concentrate on a single issue,
the company can tailor its incentives to get the managers and employees to be
the best they can be.
Lastly, the article talks about the consultants who can help managers become
better leaders and managers should use consultants as a support tool and

Article Review: Cracking the Code of Change

By: Suman Sourav
2016PGP180
nothing else. Theory E and Theory O can be successful when used together at
the same time. To do so requires great skill and will to achieve adequate results
and companies should not shrink from this challenge.
I think article deeply and fully analyze the situation of organizational change. No
theory separately can give equal benefits to the organization which is rightly
mentioned in the article. These days companies look to do revolutionary change
so the strategy of using both theories at the same time can fulfill the
requirement of the companies.