MSL 750 ORGANIZATIONAL CHANGE
CASE STUDY 1
Change is necessary if organizations are to survive and thrive, and the sharp downturn in the economy is forcing leaders in all industries to take a fresh look at how they do business. Recently, most companies in the financial services industry faced with a need for dramatic change after mortgage crisis and the Wall Street meltdown. (Daft, 2011, p. 460) Change is an ongoing and never-ending process of organizational life. The intensity of organizational change can range from the nominal to the radical. As Clark, Gioia, Ketchen, and Thomas (2010) mentioned, three degrees of change intensity are distinguished according to the amount of change: first order change, which involves incremental changes to shared schemas (e.g., adopting new routines); second-order change, entailing substantive modifications of shared schemas (e.g. implementing a new strategic vision); and third-order change, implying acute alterations to or replacement of existing shared schemas (e.g., during traumatic events like bankruptcies or radical changes such as mergers and acquisitions) (p. 397). One of the most profound changes occurs with Merger and Acquisition (M&A) that requires significant organizational change. Organizational change involved in M&A has become larger in scale and longer in transition period than any other types of organizational change. Moreover, researchers have reported extreme difficulties in managing such a large-scale organizational change and its traumatic impacts on employees, such as layoffs, turnover, stress, and illness. (Seo, 2001, p. 1) M&As are driven by many legitimate business purposes: to achieve profit growth, achieve advantages of scope or scale, acquire complementary skills or resources, enter a new market, or capture an important technology, distribution arrangement, or competency (HiSoft, 2011, p. 1). CEO of the Duke Energy, Jim Rogers,...