Podcast
Questions and Answers
What factors contributed to Tekco's performance crisis?
What factors contributed to Tekco's performance crisis?
The performance crisis at Tekco was primarily due to deregulation and associated changes in its competitive and technological environments.
Who were considered the 'lieutenants' in Tekco's change initiative?
Who were considered the 'lieutenants' in Tekco's change initiative?
The middle managers (MMs) were viewed as the 'lieutenants' responsible for executing the orders of the top management team (TMT).
How did the new TMT at Tekco secure internal support for their change plan?
How did the new TMT at Tekco secure internal support for their change plan?
The new TMT formulated a clear plan for change and successfully rallied substantial internal support from the organization.
What key concept is emphasized regarding the relationship between power and legitimacy in the context of change?
What key concept is emphasized regarding the relationship between power and legitimacy in the context of change?
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What is the significance of the literature on legitimacy in understanding radical change initiatives?
What is the significance of the literature on legitimacy in understanding radical change initiatives?
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Study Notes
Tekco's Radical Change Initiative
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Tekco, a historically successful company with a skilled engineering staff, faced a performance crisis due to deregulation and changes in its competitive and technological environment.
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This crisis led to a radical change initiative over a three-year period, with a new top management team (TMT) hired from outside.
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The TMT successfully formulated a plan for change and gained substantial internal support by rallying the company's highly skilled engineering staff.
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The TMT's plan involved transforming Tekco's monolithic bureaucratic structure into multiple business units, shifting the company's incentive system, reducing costs by shedding 25% of the workforce, and recruiting new managers to develop sales and marketing skills.
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The company’s employees were initially apprehensive and resistant as they had enjoyed decades of revenue and profit growth, leading to generous benefits, life job security and established career development paths.
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Despite initial skepticism, the new CEO made an effort to connect with employees at different locations and engage in open communication, establishing himself as a trustworthy leader.
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The TMT's legitimacy as change agents was heavily influenced by their ability to communicate effectively, build trust with employees, and address grievances in a timely manner.
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The text highlights the crucial role of middle managers (MMs) in implementing change, highlighting their dual role as the “lieutenants” of the top team and “lynchpins” in the overall process.
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The TMT underestimated the need for authenticity and transparency in communication, relying primarily on top-down communication without ample scope for dialogue and feedback.
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This resulted in a lack of trust and created an environment of emotional censorship, where employees felt pressured to express positive sentiments even when they had reservations.
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There was a disconnect between the TMT's intended message and its real-world impact, leading to unfavorable legitimacy judgments by the MMs.
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Description
This quiz evaluates your understanding of Tekco's transformation during a performance crisis. Explore the strategies implemented by the new top management team and the responses from employees. Assess the impact of these changes on the company's structure and culture.
