MyBank Short Extracts Exercise - Script 2

This essay will critically review Mybank’s organisational changes in the top-down and bottom-up
approaches. Applying Hersey and Blanchard's (1982) theory on leadership style selection based on the
follower's readiness (Robbins and Coulter, 2015), shows that the leadership styles adopted by Mybank’s
management contributed to the failure of implementing change strategies. The Situational Leadership Theory
shall be used as a lens, identifying that resistance was a major influence in the failure of the strategies, which
brings the focus of the analysis to the power of resistance.

Analysing the power of the resistant stakeholders, Hope-Hailey and Balogun’s (2002) Kaleidoscope theory
investigates why the resistance experienced within the two approaches led to the change strategies failing.
The use of Kotter's (1995) eight steps as a best practice provides insight on why Mybank’s organisational
changes failed and why the change initiators struggled to gain power. Findings are that the failure of the
strategies does not benefit anyone. Each section shall conclude with an overview of the lessons learnt about
the successful management of organisational change.

Leadership Style – Top Down

When analysing leadership styles in the top-down approach, it is important to critically review management
at the senior and middle levels as well as the employees. In 2003, Mybank implemented a cost-saving
strategy, the leadership style exhibited by senior management caused negative effects. Again, middle
managers resisted, however, this time they were undermining commands from senior management. The
former middle managers had job maturity with the knowledge and capabilities (Graeff, 1983; Robbins et al.,
1994) therefore were “able but unwilling”, evidenced by their strong resistance to the redesign of the
organisation. They were entrenched in the old processes and viewed the strategy as unworkable therefore had
a medium readiness level with the ability, but not the willingness, to accomplish change (Robbins and
Coulter, 2015).

The model’s leadership styles are intended to influence the readiness for change (Nordin, 2012) but fail to
take into account the reasons for low readiness. The model suggests with middle-management at readiness
stage R3, the senior management should implement a Supportive (Participating) style (Robbins and Coulter,
2015) to gain follower’s support by listening and encouraging (Irgens, 1995). However, senior management
selected the Telling (Direct) style incorrectly, as middle-management were unwilling (Graeff, 1983) but able,
hence needed a Supportive leader. This inconsistency is one reason for the failure of the organisational
change. However, what next occurred within Mybank is not given as a warning in the theory.

Adopting a Telling (Direct) style that oozes control consequently generated resistance from employees
(Clegg et al., 2016). The effects of these strong, “Hitler-like” decisions (Dawson and Andriopoulos, 2014,
p.147) immobilised middle managers and demotivated employees. This is not outlined in the model and is,
therefore, a criticism as the model does not explore implications of leadership styles, despite senior
management’s misapplication of the appropriate style. Furthermore, the model fails to recognise the low
readiness is in partnership with resistance and therefore adopting an autocratic style is not necessarily the
correct method.

Through analysing the middle-management’s leadership style, it is evident it does not fit simply into the
model due to their position as both the leaders and followers. As discussed, as followers middle-management
would be classified as R3. However, from the lower employees’ perspective, middle managers are leaders.
The model suggests that managers should adopt a Telling (Direct) style due to low morale, unwillingness,
and employees’ inability, a consequence of combining the two departments causing skills disparity (Graeff,
1983; Dawson and Andriopoulos, 2014). However, middle-management adopted a Supporting (Participant)
style as highly supportive of their employees but with low task behaviour, therefore attempting to let staff
carry on with their original roles (Irgens, 1995). Disagreement from middle-management and seeing the
strategy as unrealistic caused resistance which prevented middle-management from adopting the Telling
leadership style, which the model would suggest and possibly what senior management desired from them.
Ultimately, this disparity resulted in the failure of organisational change.