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Topics Covered
 What is organizational change?
 Forces of Change
 Planned Change
 Resistance to Change
 Politics of Change
 Kurt Lewin 3-step change model
 Organisational Development
 Creating a Culture for Change(Learning, Innovation)
 When Asa Griggs Candler founded the coca-cola company in the late 1800s, there was no way he
knew his company would one day be valued at upwards of $180 billion. That’s a lot of money for a
business that sells soft drinks. But coca-cola didn’t become the powerful force it is today by sheer
chance. An illustration: in the 1980s, coke’s biggest rival, Pepsi, was aggressively targeting it. This
caused coca-cola to reevaluate its offerings. Eventually, the company decided to concoct a new,
sweeter soda. They called it simply new coke. Unfortunately, the public didn’t take too kindly to the
new beverage. But coke’s executives didn’t let the mishap derail their success. Quickly, management
decided to pull new coke and replace it with the older, established formula. Lo and behold, coca-
cola classic was born, and coke maintained its market dominance. Just as quickly as coke changed to
accommodate its customers’ sweeter palates, it changed direction again when it realized it made the
wrong move. But that’s not the only instance where coca-cola listened to its customers and enacted
change. Again, how is a company primarily known for selling sugary drinks valued at $180 billion in
2016?Coke doesn’t only sell sweetened carbonated beverages. In fact, the beverage king sells more
than 500 brands to customers in over 200 countries. Today, many of its offerings — like DASANI,
vitamin water, and Evian —are even considered healthy drinks. In other words, coca-cola has
consistently strived to diversify its product portfolio and expand into new markets. By and large,
coke has succeeded in these efforts.
Let’s discuss
 In the aftermath of world war II, the Japanese auto market was nearing
destruction. On the other hand, American car manufacturers like ford and
general motors were crushing it. Understanding that something major had to
be done in order to keep pace with their western rivals, taiichi oh no, an
engineer at toyota, convinced his managers to implement the just-in-time
approach to manufacturing. Instead of having to order and store an insane
amount of heavy equipment and machinery, ohno thought it made a whole
lot more sense to receive supplies the moment they were ready to be used.
This way, Toyota wouldn’t have to waste any space, time, money, or energies
dealing with supplies that would just collect dust until they were needed.
Additionally, Toyota would have more cash on hand to pursue other
opportunities; it wouldn’t be tied up in inventory. Toyota implemented
ohno’s suggestions, opting to take the just-in-time approach to
manufacturing. Though it didn’t happen overnight, ohno’s recommended
changes ended up transforming the Japanese automaker for the better. Ohno
ended up becoming an executive.
Case Study-3
You are probably so used to seeing star bucks coffee shops everywhere that you might not realize
the company went from just 11 stores in 1987 to 2,600 in the year 2000. This incredibly rapid
growth sprang from the company's ability to create a unique experience for customers who wanted
to buy its distinct brand of lattes and mochas wherever they found themselves. At star bucks core,
there was also a culture of treating each customer as a valued guest who should feel comfortable
relaxing and taking in the ambience of the store. whether you were in the company's founding
location in Seattle, Washington, or at the other end of the country in Miami, Florida, you knew
what to expect when you went to a star bucks. This uniform culture was truly put to the test in the
face of massive expansion, however, and by 2006 Starbucks chairman and former CEO Howard
Schultz knew something had gone wrong. He noted that "As I visited hundreds of Starbucks stores
in cities around the world, the entrepreneurial merchant in me sensed that something intrinsic to
Starbucks' brand was missing. An aura. A spirit. The stores were lacking a certain soulStarbucks'
performance had become lacklustre, with hundreds of planned store openings being cancelled and
hundreds more stores being closed.
So, Schultz took the dramatic step of coming back as CEO and engaging in a companywide
effort to change the corporate culture back to what it had been before its expansion. All 7,000
Starbucks stores were closed for a single afternoon as part of a training effort of 135,000
baristas. Quality control was a primary mission; baristas were instructed to pour every glass
of espresso like honey from a spoon, to preserve the flavour. This emphasis on quality over
speed ran counter to the principles of mass production, but t was just what the company
needed to ensure it could retain its culture. Espresso machines that obscured the with lower-
profile machines that allowed baristas to look directly at guests while making beverages. And
"assembly line production," like making several drinks at once, was discouraged in favour of
slowly making each drink for each customer. customers' view were replaced Schultz is
convinced his efforts to take the culture back to its roots as a neighbourhood coffee shop-one
entranced with the "romance of coffee" and treating every customer as an old friend-has
saved the company. Today Starbucks earns more than $10 billion in annual revenue and
serves more than 50 million customers a week around the globe.
I. What factors are most likely to change when a company grows very rapidly, as
Starbucks did? How can these changes threaten the culture of an
2. Why might this type of radical change process be easier for Starbucks to implement
than it would be for other companies?
3. A great deal of the return to an original culture has been credited to Howard Schultz,
who acted as an idea champion. Explain how Schultz's efforts to change the Starbucks
culture fit with our discussion of culture change earlier in the chapter,
4.Schultz's change initiative might succeed at another company that values customization
and high levels of customer service, but how would it need to differ at a firm that
emphasizes speed and efficiency of service.