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Organizations Change

Organizational change is the movement of an organization from one state of affairs to another. A change in the environment often requires change within the organization operating within that environment. Change in almost any aspect of a companys operation can be met with resi stance, and different cultures can have different reactions to both the change and the means to promote the change. To better facilitate necessary changes, several steps can be taken that have been proved to lower the anxiety of employees and ease the transformation process. Often, the simple act of including employees in the change process can drastically reduce opposition to new methods. In some organizations, this level of inclusion is not possible, and instead organizations can recruit a small number of opinion leaders to promote the benefits of coming changes. Organizational change can take many forms. It may involve a change in a companys structure, strategy, policies, procedures, technology, or culture. The change may be planned years in advance or may be forced on an organization because of a shift in the environment. Organizational change can be radical and swiftly alter the way an organization operates, or it may be incremental and slow. In any case, regardless of the type, change involves letting go of the old ways in which work is done and adjusting to new ways. Therefore, fundamentally, it is a process that involves effective people management.

Key features of the recent Nokia story:


Finnish conglomerate turned itself into the worlds leading mobile phone company in the 1990s. So Nokia has already been through one (successful) change programme, turning itself from an unfocused conglomerate into a focused mobile phone producer. Can it change again? Global market leader in mobile phones but not smart phones Still profitable, but revenues under pressure September 2010: Appointed new CEO - Stephen Elop - to drive strategic change February 2011 - Elop issued the famous burning platform memo bluntly explaining the serious strategic challenges facing Nokia

Elop outlined results of his strategic review on Feb 11 2011 - making it clear that Nokia had to undergo a substantial programme of change. Elop announced a strategic partnership with Microsoft in March 2011 to jointly develop smartphones using the Windows mobile platform - ditching Nokias previous investment in its homegrown Symbian platform.

Elop has swept away many elements of Nokias previous organizational structure - a significant process of delayering Elop has refocused the business on leadership (managers taking decisions and responsibility) and markets (innovation driven by people competing in key mobile phone segments)

Decision-making has been delegated to local/national teams rather than relying on decisions by an overly-centralized senior management team Goals and incentives for the senior leadership team are now more transparent The new strategy brings clarity and a sense of direction to Nokia - but will it be enough to achieve a successful turnaround? During 2012, Nokia has continued to pursue a retrenchment strategy in the face of rapid declines in sales February 2012, Nokia announced it was laying off 4000 employees to move manufacturing from Europe and Mexico to Asia March 2012, Nokia announced it was laying off 1000 employees from its Salo, Finland factory to focus on software June 2012: 10,000 further job losses announced and the closure of facilities in Finland, Germany and Canada. Job cuts amount to a fifth of the total employees remaining at Nokia

By June 2012, Nokia had lost more than $88bn in market value since Apple introduced the iPhone in 2007

Why did Nokia need to change?


Almost everyone who understands the challenges facing Nokia agrees that change is unavoidable

Nokia had missed the major change in its market - the smartphone revolution Nokia had continued to focus on mobile phone devices (hardware) rather than mobile phone applications (software) The product life cycle of Nokias products had shortened dramatically as others (Apple, Google Android) developed smartphone platforms and an associated ecosystem of apps. The consumer transition from traditional mobile phones to smartphones has been dramatic, and caught Nokia off-guard

Nokia has faced intense competition from mobile phone producers in emerging markets who can make fast, cheap handsets at the lower end of the mobile phone market Many in Nokia regret that the business had become too product-led rather than customerled; a missed opportunity Poor leadership and complacency (bred from success in non-smart-phones) The wrong culture - over-consensual; lacking innovation and entrepreneurial spirit Complex, overly-bureaucratic organizational structure with poor accountability Nokia had become clogged with bureaucracy Decisions being made within the firm were often cancelling each other out! A series of committees, boards and cross-functional meetings held-up decisions