The paper “ Cracking the Code of Change by Beer & Nohria” is an intriguing variant of an article on management. ‘ Cracking the code of change’ is an article written with a focus on the changes that happen in the business world. The entry of a new economy has not only brought in immense business opportunities but also great turmoil. For an organization, change is inevitable and it must keep up with change or it risks dying. Most companies find it very hard to keep up with change and the few that are able to, find it very hard to manage the process well.
This is due to the complex nature of change in the corporate world. This article focuses on two theories of change: theory E and O. In Theory E economic value forms the basis of change. For Theory O change is based on the firms’ capability. The two models are valid and each management tries to use theory so as to attain its goals. But each theory bears its own costs. The two authors are re-known scholars. Michael Banner has studied civil engineering at the University of Technology, Dresden.
His main studies are in construction together with structural engineering. Since the year 1996, he has been a professor at the University of Technology, Dresden for structural analysis. On the other hand, Nohria chairs the Organizational Behavior Unit, at the Harvard Business School. He is also a professor at Harvard Business School. He is the professor of Richard P. Chapman. The article they co-author is intended for the individual use by the permitted patrons in the Harvard institution. According to the authors, most of the changes initiated by the organization often fail.
The main reason for these failures is due to the haste by which organization undertakes to change their organizations. The managers, therefore, end up losing focus on their efforts of introducing change in their organization because they are bombarded with information both in print and online as to why and how their companies should adopt change. This results in a devastating effect, both to the human and economic aspects of the business. In order to avoid this kind of scenario, the managers should take the initiative of understanding the nature of corporate change in a much better way.
Cracking the code of change is therefore imperative to the leaders’ (Beer & Nohria 2000). In the course of studying the whole idea of corporate change, two theories of change emerge. These are based on the usually common unconscious assumptions that the senior managers have about how and why the changes are to be executed. The first Theory E sates that change is based on economic value. For the second Theory O, Organization capability forms the basis of change.
Both models are legitimate and they realize some of the management’ s goals although they have their own costs. Theory E strategies are very radical therefore attracting all the attention. This is because they exhibit a very “ hard” approach to institute change. In this theory, the increase in the shareholder's values is used to measures the success of the change. In this theory, the strategies used usually employs heavy use of drastic layoff s, downsizing, economic incentives, and restructuring. On the other hand, the managers who are aligned to the Theory O believe that the focus on the price of the stock alone might end up harming their organization in the long run.
Therefore they focus on building a sustainable corporate culture together with human culpability. This is done through individual together with organizational learning. Beer, Eisenstat & Spector, 2001, further adds that Theory O can be strengthened by empowering managers together with the employees to implement change.