This reading response will cover the two major themes that have been discussed in this module: the resistance to organizational change and the reasons underpinning companies’ failure. More specifically, it will discuss the interrelation between organizational resistance to change and companies’ failure showing how the most successful companies can fail unless they are able to respond proactively to the emerging changes. The two major texts that will be analyzed in this reading response are Brown’s Easy Step By Step Guide to Managing Change (Chapter 4) and Sheth and Sisodia’s article Why Good Companies Fail. There will also be references to Judge’s Focusing on Organizational Change – despite the fact that the article is dated, it offers some valuable insights into the problem of organizational change.
The readings have shown that there are three major barriers to organizational change: “unclear objectives, inappropriate structures, and poor communications” (Brown, 2002, p. 25). The first barrier seems to be evident and easily explicable. Thus, it is clear that employees cannot form a well-defined opinion regarding the change the purposes of which remain vague. In this regard, unclear objectives do not necessarily cause resistance; instead, it would be more accurate to claim that they should never ensure approval and support. The most important task, here, is to understand how the problem of unclear objectives can be resolved. As it is explained in Brown’s (2002) text, the possible remedies are cascading objectives, using the SMART patterns, and approaching the problem of objectives complexly (with regard to all the aspects involved including customer satisfaction, financial ability, people optimization, etc.). it can be suggested that the issue of the inappropriate structure can be one of the most challenging and tricky because this barrier is not as evident as the other two.

As Brown (2002) explains it, many organizations fail to consider the structure of their companies while developing the plans for change. As a result, even a successful plan can fail if it does not fit the specific organizational structure. This offers some clues to the second question that will be discussed in this reading response that is to the question why good successful companies fail. Before this question is discussed in details, there is still one barrier to organizational change left – poor communications. This barrier overlaps partially with the first one meaning that it is also associated with either insufficient or incorrect information that employees possess. The lack of information just as the feeling of being misinformed results in the situation when employees either resist the change or remain indifferent to it because they have no idea regarding the purposes of this change and the benefits that this change implies to them personally.

The second text that will be discussed in this reading response explains some of the reasons why successful companies fail. On the face of it, it might appear that the two texts are not closely related for they explore different subjects. However, this is not exactly true. Thus, Sheth and Sisodia (2005) show that the failure of many successful companies is to, a larger or smaller extent, explained by their inflexibility or, otherwise stated, by their inability to perform the change. For example, the internal causes of failure include established “status quo” management and long-lasting focus on the limited group of stakeholders. Both strategies point to the company’s inability or unwillingness to change. Similarly, the external causes of failure include various changes in the environment (ex. changes in regulation, investors, competition, technology, globalization, and customers) and a company’s inability to adapt its work to the new context or, in other words, to respond to these changes adequately.

Whereas Brown (2002) speaks about the roots of the resistance to change (discussing mainly those barriers that prevent employees from getting involved with the change processes), Sheth and Sisodia (2005) discuss those fundamental factors that do not let companies change. According to them, there are only two such factors: unwillingness and inability. Thus, there are arrogant companies that are unwilling to change, captive companies that are unable to change, and legacy companies that are both unwilling and unable. This unwillingness is commonly related to the internal orthodoxies that a company cannot eliminate. The inability is normally explained by the heavy bureaucratic organizational structure. In this regard, Judge (n.d.) also adds the third factor that can impede change that is the lack of shortage of human skills and/or resources. The only type of companies, that can perform change successfully and, thus, avoid failure, is adaptive companies.

The readings analyzed in this response discuss one and the same question that is the question of those factors that ensure a company’s survival and successful development. Despite the fact that these factors are specific and vary from company to company, there are still some general rules that should be considered. First and foremost, it can be concluded from the readings that the key clue to a company’s survival is its ability to change and to respond adequately to the changes in the environment. This ability is, in turn, determined by the company’s culture, structure, and resources. Even if a company is able to realize the need for change, the implementation of this change is also complicated by numerous barriers. These barriers can appear for different reasons including unclear goal setting, the discrepancy between the change plan and the organizational structure, and ineffective communication.