Managing change: Nokia case - Lab Report Example

?Managing Change (Case Study) Table of Contents 0.Overview of the Telecommunications Industry & the Challenges Faced 3 2.0.Culture-Excellence Approach & Organizational Learning 6 3.0.Potential Sources of Resistance 11 References 14 Bibliography 17 1.0. Overview of the Telecommunications Industry & the Challenges Faced The industry of telecommunications is going through a fast deregulation and disturbance due to technology in the existing services. In numerous markets worldwide, governments are annulling the monopolistic guidelines owing to which the current big players are witnessing a fresh variety of competitors. The telecommunication market involves customers who are residential, big corporate as well as small businesses. In case of the market for residential customers, the competitors are strongly reliant on the price in order to give a boost to their foundation of customers. The success factor is reliant on reputation, branding and investment in nimble arrangement of management as well as on billing solutions (Gupta 2008). The observable fact of mobile phones is exceptional in the past in the markets of telecommunication as well as consumer electronics. People became quite accustomed to the mobile phones in just a decade’s time. Owing to this adoption the annual production of handsets globally, was expected to surpass 450 million in terms of numbers in the year 2003. This was approximately three times of the volume of the PC and television markets. Growth was accelerated by the impressive development in the field of technology for mobile phones with regard to performing business activities as well as in the sizes. As an outcome, mobile phones are transformed by the users in two years averagely in comparison to other appliances. As a result, around 80% of the purchases of mobile phones stand for alternate handsets (Antoine 2003). The mobile handset industry is facing severe challenges in the global market in terms of new competitors. Technology is also becoming outdated rapidly because of the introduction of fresh products. Moreover, there is growing stress on margin owing to severe competition along with accessibility of alternates that have increased which subsequently boosted the bargaining power of the buyers. Mobile phone handsets are progressively becoming sophisticated and highly superior devices. It now includes memory, applications, microprocessors, operating systems and core capabilities like keypads and screens of LCD. There is a big demand for applications along with functions from the mobile industry which is giving birth to the need of rapid innovation. In such a situation of difficulty, it becomes almost unattainable for any manufacturer of mobile handsets to hold on to the principal expertise in the industry where the technologies are developing so swiftly (Anderson and Jonsson 2005). The swift change in the technology of mobile phones made some organizations in the industry sell off their upstream or the downstream businesses so as to concentrate on the actions in the process of value chain that are considered as the core competencies. But Nokia and few others did not give in to the change and continued to possess. However, they had started to de-couple the upstream and even the downstream functions whenever they identified the requirement to preserve competitiveness. In this phase there were houses of reference plans that appeared who were expert in putting together the software elements with the hardware elements and also an operating system and developed an experienced and recognized resolution system that could be utilized in constructing a mobile phone. Such firms started to certify their developed designs to the Original Device Manufacturers (ODMs) as well as to the Original Equipment Manufacturers (OEMs) and also worked strongly together with the customers in order to lessen the risks associated with manufacturing along with apparent design. But once again Nokia was practically the single company who did not adapt to the modifications and remained as the sole manufacturer who was not ready to be reliant on policies developed by third-party and kept on developing designs and solutions in-house for all sections of products (Anderson & Jonsson 2005). It was due to this reason that Nokia had witnessed a sharp fall in its market share as it lacked innovation and foresight. The other competitors such as Motorola and Samsung were responsive enough to adapt to the changes and employed a large portion of their finances for research and development in order to innovate products. But Nokia remained rigid which resulted in market capture of mobile phones by the other competitors. Nokia’s reluctance to innovate new products and modify the existing ones according to the choice and requirement of the market led to their fall in terms of profits (ICFAI Business School 2010). It was stated by Canalys which is a research firm that nearly all the smart phones were Android-based except for the phones manufactured by Nokia. While Android was used by numerous phone manufacturers, Apple designed an operating system called iOS and is only utilized by Apple. Nokia was unable to adapt to this change and kept manufacturing phones that were Symbian-based in-spite of the dissolving requirement for such phones. Most of the phone manufacturers used the Android while the others manufactured phones with Windows software. Nokia was remarked as the only one to be left out in the league though it plans to introduce phones with Windows software shortly but the other competitors had already taken advantage of this situation by introducing Windows-based phones. However, it is estimated that this move of Nokia to manufacture Windows-based phones would in order to revive its image and position in the industry (International Business Times 2011). 2.0. Culture-Excellence Approach & Organizational Learning The ‘culture-excellence’ approach implies the management of culture with effortlessness and simplicity so as to enhance the capability of a particular organization. It focuses on the need to concentrate on the enhancement of the processes and involve the employees in the initiative to attain spectacular results by the organization (Gallos 2006). An organizational change would engage initiatives like restructuring and replacing the key employees. It means adopting and implementing new techniques of management and utilization of advanced technologies. Organizational change helps in adapting to changes which eventually helps in maintaining competitive advantage of the organization (Andriopoulos 2009). The need for organizations to change swiftly in order to survive was identified by Burnes (Burnes 2000). The success of the organizations was equated with the ownership of a powerful and suitable organizational culture (Collins 1998; Watson 1997; Wilson 1992). Organizations that were inflexible and were not responsive to change was identified to lose their existing competitive advantage gradually (Peters and Waterman 1982). For supporters of ‘culture-excellence’, the complete world is fundamentally a vague place as here meticulous plans were not possible and the need to be flexible was necessary. As an alternative of close control and severe rules, the organizational purposes required to be encouraged through loose management, founded on common and collective values as well as culture and should be followed with the assistance of initiatives undertaken by the authorized employees (Watson 1997). It was argued that in order to implement and adapt to change it needs to be practiced in a bottom-up way in the daily actions in the course of an organization’s operations rather than driving the change from top (Collins 1998; Hatch 1997). It has been said that organizational learning should be encouraged in order to build the potential that are required for existence in the era of constant change. Organizational learning can be considered as the sole competitive advantage for organizations in its future days (Adrian 2000). A model of three-stage was developed by popular social psychologist named Kurt Lewin. This model gave a complete understanding of initiating, handling and also stabilizing the entire method of change. The three phases involved in the procedure are ‘unfreezing’, ‘changing’ and ‘refreezing’ (Adrian 2000, 73). The unfreezing phase focuses on constructing motivation which would initiate change. Here people are influenced to substitute previous behaviours and approaches with the ones wished by management. It is very important in this stage for employees to become discontent with their previous methods of carrying out things. Managers are responsible for initiating the change by displaying data in relation to the intensity of effectiveness, customer satisfaction or competence. Another process called benchmarking can also be applied in order to ‘unfreeze’ any organization. Benchmarking is the method that involves assessing the performance of a particular organization in contrast to the other organizations and gains an understanding of the ways of good performing organizations in attaining results. In this stage it is also necessary to develop ways that would lessen the obstacles towards change (Adrian 2000, 73). Organizational change is carried out in order to enhance few process, product, procedure, service or result of attention to the management. As it is known that change engages learning and carrying out things in a different way so, this phase of ‘changing’ involves providing fresh information to the employees, fresh models of behavior, fresh processes, fresh equipment, fresh technology or ways of performing the job. Organizational change is practiced for the purpose of enhancement or development or it might even be aimed at providing solutions to problem like inferior service to the customers or poor productivity. Change even can be aimed at various levels in the organization. However, it should always be remembered that change should be practiced for attaining an end-result that is wished by the organization (Adrian 2000, 73). In the ‘refreezing’ phase change is made steady by assisting employees in incorporating the altered behavior into their usual manner of carrying out things. This becomes the change that flows all over in an organization. For instance, bringing in changes in a structure of reward to strengthen the team performance in comparison to individual performance is probable to affect the organizational culture. Organizational change does have a higher likelihood of success when the effect of change is practically considered on the employees by the managers (Adrian 2000, 73). After the application of this three-stage process, the organization will have a desired outcome. It should be noted in this regard that the outcome is required to be constant with the strategic plan of the organization (Kinicki 2008). The culture-excellence approach and organizational learning can help Nokia to regain its market position by initiating change in the organization by providing training to the employees about the new technologies which would be further shared by the trained employees among all the other employees in the organization. This would facilitate innovation which is very much essential for Nokia. Managers should be provided training in leadership programs which would help in enhancing the job satisfaction for individuals’ and even the productivity. Nokia should also introduce fresh information technology as this might be the change that is necessary for increasing group productivity and the overall profits. Nokia can also introduce the above mentioned three-stage model in order to introduce change in an effective way. Nokia can also introduce the structure of reward where the employees will be rewarded according to their performance, skills and competence. Both individual as well as group rewards should be introduced in order to boost productivity and competence in the organization. Nokia should also conduct programs where a survey should be conducted on the employees so as to ascertain their degree of satisfaction in the organization and should take necessary actions according to the outcome of the survey. If the employees are satisfied with their work then it would surely enhance their individual as well as overall performance and efficiency and this would help Nokia to some extent in regaining its position (Adrian 2000). Furthermore, Nokia should conduct an analysis occasionally regarding the competence of the employees which would help the organization to ascertain the knowledge and capabilities that would be required in order to carry out the business operations of the organization based on the short as well as the continuing strategic purposes. Based on this survey the organization can make a decision on the kind of training or orientation programs that needs to be given to the specific employees in order to increase their competence (Nokia 2011). Nokia should also encourage employees to change their way of working or carrying out their tasks according to the new technologies or the new way of working in order to keep up the change culture. Nokia should also ensure flexibility of the employees in order to adapt to the changes in the organization. These are the ways by which alterations can be commenced in the organization and help the organization to regain its lost position (Adrian 2000). 3.0. Potential Sources of Resistance In the initial stages when the culture of change is introduced there would be chances that the employees would show resistance in adapting to the culture. The employees at Nokia have been used to their own system of working in the organization and a sudden interference might trigger some apprehensions in their behavior. Nokia should be quite careful in introducing the culture of change in a designed process. The employees might not agree to the alterations and modifications that would be introduced in their way of working and might persist to work in their previous ways. The employees might also not agree to attend the training programs as they might not feel the requirement. And even if they attend the training, they might not feel the need to implement the things that they have learned in their day-to-day working processes. Although the main reason of Nokia’s downfall is its inability to adapt to the new technologies that are being used in the new Smartphones but employees as well have a vital role to play in it. Nokia’s plans to adapt new technologies in their phones would also involve the employees as they are the ones who would be assisting the organization to implement this change (Dinham 2011). Therefore, it is essential for Nokia to communicate with the employees regarding the downfall that the organization is experiencing and the need to adapt the new technologies in order to survive in the industry. This would help the employees to appreciate and recognize the need which would make them flexible and responsive enough to adapt to the change without much of a resistance. The reward system should be introduced in order to encourage and motivate the employees in implementing and following the change in the organization. The organization also plans to shed off jobs in order to save 1 billion (euro) by 2013. This step would not be viewed with appreciation by the employees but Nokia should communicate the reason properly to the employees and explain the crisis through which the organization is going through currently. The new CEO Mr. Elop identified the need that Nokia requires to be less inward-looking or rather narrow-minded in order to endure in this business environment. This clearly means that the organization is preparing to introduce change in its system (Dinham 2011). Introducing change would benefit the organization as well as the employees equally and this should be properly communicated across the organization. The organization should conduct frequent training programs for the employees so that the employees get accustomed to the new ways of technology. Nokia should also plan training programs for the managers who would help in leading and guiding the employees through this process of change. The management of the organization who would be mainly responsible for introducing this change should be co-operative with the employees in case of any kind of queries. Apart from these the employees should also be provided with certain compensation and benefits like overnight allowance for those who would work for the entire night, should be paid over time charges and even incentives. These benefits would encourage and provide motivation to the employees to work more efficiently and dedicatedly individually as well as a group in order to work in agreement in relation to the objectives of the organization so as to attain them (Dinham 2011). References Anderson, J. L. and M. E. Jonsson. 2005. The Mobile Handset Industry in Transition. Jamie Anderson Online. Adrian, T. 2000. Managing Change. India: Pearson Education. Andriopoulos, C. and P. Dawson. 2009. Managing Change, Creativity and Innovation. California: SAGE Publications Ltd. Antoine, P. 2003. Understanding the Mobile Phone Market Drivers. Alcatel 1-6. Burnes, B. 2000. Managing Change. Harlow: FT/Pearson educational. Collins, D. 1998. Organizational Change. London: Routledge. Dinham, P. 2011. Nokia fades in booming smartphone market. http://www.itwire.com/it-industry-news/market/48815-nokia-fades-in-booming-smartphone-market (accessed September 15, 2011). Gallos, J.V. 2006. Organization Development: A Jossey-Bass Reader. Manhattan: John Wiley and Sons. Gupta, A. 2008. Pursuit of the Perfect Order: Telecommunications Industry Perspectives. Business Process Trends 1-14. Hatch, M. J. 1997. Organization Theory: Modern, Symbolic and Postmodern Perspectives. Oxford: Oxford University Press. ICFAI Business School. 2010. Competition and Strategy/competitive Strategies, Core Competency and Competitive Advantage, Corporate Strategy. Case Studies on Strategy 1-71. International Business Times. 2011. Apple vs. Samsung: Nokia Slumps to 3rd, Samsung ‘Underwhelming’. http://au.ibtimes.com/articles/191242/20110803/apple-samsung-nokia-iphone-galaxy.htm (accessed September 14, 2011). Kinicki. 2008. Organizational Behavior. New York: Tata McGraw-Hill Education. Nokia. 2011. People-It’s a Human Culture. http://www.nokia.co.in/careers/nokia-as-an-employer/people (accessed September 15, 2011). Peters, T. and Waterman, R. H. 1982. In Search of Excellence: Lessons from America’s Best-run Companies. London: Harper and Row. Watson, T. J. 1997. In Search of Management. London: Thompson International. Wilson, D. C. 1992. A Strategy of Change. London: Routledge. Bibliography Cameron, E and M. Green, 2009. Making Sense of Change Management: A Complete Guide to the Models, Tools and Techniques of Organizational Change. London: Kogan Page Publishers. Carnall, C.A. 2007. Managing Change in Organizations. New Jersey: Financial Times Prentice Hall. Pugh, L. 2007. Change Management in Information Services. UK: Ashgate Publishing. Thomas, S. J. 2001. Successfully Managing Change in Organizations: A User’s Guide. New York: Industrial Press Inc. Read More