Question

It was October 26,2018 when Christian Sewing, chief executive of Deutsche Bank, based in Germany, was facing a dilemma. In his announcement to shareholders, he stated that there will be tough cutbacks as steps were being taken to send home 18,000 of its staff worldwide in 2019. This move is part of the company's attempts to revitalize its business. This follows from job cuts amounting to 6,000 in 2018 and the failure of a merger attempt with its rival Commerzbank with both banks disclosing that the deal would not have generated sufficient benefits to offset the costs of the deal. In line with 'Strategy 2020', the Bank adopted a phased approach to eliminate redundancies in its workforce. By 2019, the Bank is continuing with its downsizing plans to reduce its 91,500 global workforce by about 20%. According to Sewing, We are tackling what is necessary to unleash our full potential ... We are building on our strengths. This is a restart for Deutsche Bank. Paul Achleitner, chairman of Deutsche's supervisory board, stated that Deutsche Bank has been through a difficult period over the past decade, but with this new strategy in place, we now have every reason to look forward with confidence and optimism.

Describe and evaluate the role of organizational change leadership within the field of organizational development.

Answer 1

Organizational change leadership is essential for guiding a company like Deutsche Bank through transformative periods, such as significant downsizing. Change leaders must establish strategic directions, effectively communicate, promote stakeholder alignment, and be vigilant against excessive risk-taking to steer through challenges like economic downturns and sector instability.

Step-by-step explanation:

The Role of Organizational Change Leadership within Organizational Development

The case of Deutsche Bank highlights the critical role of organizational change leadership in driving transformation within a business. Christian Sewing, as the CEO, was tasked with leading the bank through a significant downsizing and restructuring process. In this context, organizational change leadership involves setting strategic directions, engaging with shareholders, managing stakeholders' expectations, and ensuring employees align with the new direction of the company.

Leadership through such transformational periods is tasked with maintaining operational stability while executing changes that can be quite disruptive. For example, dealing with the implications of losing a significant portion of the workforce. A successful change leader must be able to communicate effectively, inspire trust, and convey a vision for the future that engages stakeholders. The high-stakes environment described, with economic downturns and banking sector upheavals, underscores the importance of agile and forward-thinking leadership in the organizational development process.

In addition to strategic vision, leaders must exercise due diligence, avoid excessive risk-taking, and foster a culture of accountability. The contrast to Lehman Brothers' leadership, whose lack of oversight and risk management led to the bank's downfall, illustrates how crucial effective leadership is in avoiding organizational failures. As Deutsche Bank embarked on its new 'Strategy 2020', initiative, leadership's role involved identifying the bank's strengths, addressing its weaknesses, and positioning the company for future success, despite the pressures and challenges faced within the financial industry.