Strategic Change in an Organization

Introduction:

Change management is the process, tools and techniques to manage the people-side of business change to achieve the required business outcome and to realize that business change effectively within the social infrastructure of the workplace.

Change Management Learning Center

Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc., to achieve organizational goals.

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Task 1

2.1 Examination the need for strategic change in an organization:

2.1.1 Theory:

The complexity of political, regulatory, and technological changes confronting most organizations has made radical organizational change and adaptation a central research issue. This article sets out a framework for understanding organizational changes from the perspective of neo-institutional theory. The principal theoretical issue addressed in the article is the interaction of organizational context and organizational action. The article examines the processes by which individual organizations retain, adopt, and discard templates for organizing, given the institutionalized nature of organizational fields.

2.1.2 Application:

There are two possible organizational change models that the Nokia used in establishing their efforts that falls under the Strategic Planning model. There is various kind of approach and two are picked-up for careful examination. The two models are Alignment Model and Scenario Planning Model:

2.1.2.1 Alignment Model:

This kind of model ensures the strong alignment among the organization’s mission and its resources to effectively operate the organization. This model is useful for organizations that need to fine-tune strategies or find out why they are not working. Nokia might also choose this model if it is experiencing a large number of issues around internal efficiencies. Overall steps include:

The planning group outlines the organization’s mission, programs, resources, and needed support.

Identify what’s working well and what needs adjustment.

Identify how these adjustments should be made.

2.1.2.2 Scenario Planning:

This approach might be used in conjunction with other models to ensure planners truly undertake strategic thinking. The model may be useful, particularly in identifying strategic issues and goals.

1. Comes with the selection of several external forces and imagining the related changes which might influence the organization.

2. For each change in a force, discuss three different future organizational scenarios which might arise with the organization as a result of each change. Reviewing the worst-case scenario often provokes strong motivation to change the organization.

2.1.3 Comment: Nokia examined that; they need to strategic change for their organization because of the organization’s mission, programs, resources, and needed support and several external forces and imagining the related changes which might influence the organization.

2.2 Assess the factors that are driving the need for strategic change:

2.2.1 Theory:

2.2.1.1 Political-Legal factors:

Political and legal systems vary between countries and often have a direct impact on organizations by placing boundaries on what they can and cannot do. Governments tend to regulate industries such as power supply; telecommunications, postal services and transport – and these regulations differ between countries. Merger activity is increasingly subject to the approval of competition authorities by political and legal factors.

2.2.1.2 Economic Factors:

Economic factors such as wage levels, inflation and interest rates are critical in driving an organization’s cost base. Electronics companies have switched many production facilities to low wage economies in Asia to cut costs. The business cycle or general state of the economy is also a major influence on organizational well-being and changes in one of the major economies have far-reaching effects.

2.2.1.3 Socio-cultural factors:

Nokia have managed to be quite environmentally friendly and have not done anything that the consuming public have taken huge offence to, they have been very careful about this and this is one of the reasons they are such a popular brand of mobile phones. A key force for most organizations is demographic change, since changes in the number and age of the population will directly affect the demand for particular products and services.

2.2.1.4 Technological factors:

Technology is an important environmental influence and is leading much management to reconsider fundamentally the way they operate. Advances in information technology in particular can affect all aspects of a business, from its overall strategic position through to how it manages marketing, design, production and distribution.

2.2.2 Application:

PEST Analysis is done to understand the macro-economic factors that might affect Nokia.

2.2.2.1 Political:

Nokia has shifted its manufacturing units to India. Nokia has to be wary of the labor laws and its political implications. For instance, the factory was shut for 2 weeks because of employee strike. In few of the countries, mobile market is still highly regulated and government intervention does take place.

2.2.2.2 Economical:

Economy plays a key role in profitability of the smart phone industry. The demand for smart phone is elastic and hence any economic downturn might hamper the sales of the smart phones.

2.2.2.3 Societal:

We do not perceive much of societal impacts to Smartphone industry as society are quite receptive to advance technology. Moreover the rise of the so-called information society has made telecommunications increasingly more important to customer, both in terms of work and leisure.

2.2.2.4 Technological:

Smartphone industry is marked by drastic technological changes. Innovation and new product launches at faster rate are key attributes for success in this industry.

2.2.3 Comments: Nokia Assess the factors that are driving the need for strategic change by PEST analysis because of PEST Analysis is a useful tool for understanding the strategic change of the environment in which Nokia are operating, and the opportunities and threats that lie within it. By understanding Organizational environment, Nokia can take advantage of the opportunities and minimize the threats.

2.3 Assess the resource implications of the organisation not responding to strategic change:

2.3.1 Theory:

Resource implications: There are severe resource implications to an organisation for not responding to strategic change. The respond should be implemented at the right time.

Human resources

Physical resources

Financial resources

If the organisation does not respond to changes, this will affect its entire resources adversely

Human resources

To maintain a healthy, successful and efficient environment Nokia collaborates with its employees under the main goal to create an environment for all its employees where they can fulfill their potential. Motivation, encouragement and maintaining employee’s satisfaction and well-being at work are vital for Nokia to perform at its best. As a goods manufacturer Nokia collaborates with its employees within formal and informal networks to allow ideas to be exchanged easily.

2.3.2 Application:

Nokia count of all the skilled or unskilled staff for the organization hires to work for them. Nokia do hire highly skilled staff due to its nature of technology work and provide them with training to keep them update and create opportunities for program developers who can work from home to compete in a competition to win prices and even offer them jobs. In this time of recession and economy down turn every Nokia is looking to cut cost by making their surplus staff redundant.

2.3.3 Comments: Nokia assess the human resource implications to their organisation for not responding to strategic change because of the Nokia has highly skilled staff due to their nature of technological work and provide them efficient training program. So Nokia no need to assess the resource implication for their strategic change.

3.1 Develop systems to involve stakeholders in the planning of change:

3.1.1 Theory:

Stakeholder analysis is the process of identifying the individuals or groups that are likely to affect or be affected by a proposed action, and sorting them according to their impact on the action and the impact the action will have on them. Stakeholder analysis is a key part of stakeholder management. There are:

3.1.1.1 Identifying Stakeholders

When Stakeholders identified as people or organizations that are concerned about, affected by, have a vested interest in, or are involved in some way with the issue at hand. Intermediary community groups, identified during the capacity-building segment, can help identify a broad pool of stakeholders. Though, it is important to discover the informal stakeholder groups and assess their importance.

3.1.1.2 Stakeholder Mapping

Mapping stakeholders is a strategic business tool which identifies and assesses the effect of a different individual or group of stakeholders on a company. It examines the power stakeholders can exert, the relative likelihood of them using that power, and their level of interest regarding the company’s activities.

The stakeholders in this way are broadly divided into four groups;

Low interest/low power

high interest/low power

low interest/high power

and high interest/high power

3.1.2 Application:

Nokia develop stakeholders planning to change by using two methods identify and mapping stakeholders. With stakeholder mapping, when Nokia used in combination with the political mapping methodology, they don’t have to be as accurate in determining the levels of interest and power in the first analysis. With stakeholder mapping, Nokia can identify people who don’t have much interest in, or power over, their issues and can thus be ignored from further analysis.

3.1.3 Comment: Nokia should use the mapping stakeholder’s method for developing their stakeholders planning to change because of Nokia can identify people, who don’t have much interest in, or power over, their issues and can thus be ignored from further analysis of stakeholder’s change planning.

3.2 Develop a change management strategy with stakeholders:

3.2.1 Theory:

Stakeholder Management is an important discipline that successful people use to win support from others. It helps them ensure that their projects succeed where others fail.

Stakeholder Analysis is the technique used to identify the key people who have to be won over.

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Identify stakeholders: The success of the project depends upon the satisfaction of the stakeholders. Therefore, it is necessary to identify the stakeholders before you develop the product. Identifying stakeholders enables a software team to make better decisions and implementation phases of the development process.

Document needs: Publish the completed, prioritized Stakeholder Needs Documents to each stakeholder. Include a copy of the original stakeholder meeting document. Ask for any corrections or changes to their needs within one week.

Analysis stakeholder’s interest: Shareholders and employees have a common interest in the success of the organization. High profits which not only lead to high dividends but also job security. Suppliers have an interest in the growth and prosperity of the firm.

Manage stakeholder’s expectation: Three Managing Stakeholder’s expectations that are given below:

Know your stakeholders

Know what you are suppose to deliver from the prospective of the stakeholders

Hold your stakeholders accountable to the realities of the projects.

Take action: A Stakeholder should take this action in stakeholder’s management analysis, which is given below:

Communicating with stakeholders and keeping them informed of matters that are likely to be of interest to them;

Obtaining information from stakeholders that will be relevant to the project;

Managing the expectations of stakeholders;

Involving stakeholders in all key decisions about the project;

3.2.2 Application:

Nokia applied develop change management strategy by stakeholder’s management process. As we discussed on above stakeholders management model, which is helps Nokia to ensure that their change management strategy projects will be succeed.

3.2.3 Comments: Nokia can use the stakeholder’s management Model for their develop strategy change management because of this is the technique used to identify the key people who have to be won over. Moreover, by using this model Nokia can identify customer’s needs and expectation and take action in future for their change management.

3.3 Evaluate the systems used to involve stakeholders in the planning of change:

3.3.1 Theory:

Resistance to change: Resistances to Change can occur at the organizational level, group level, or individual level.

3.3.1.1 Organizational-Level:

Power and conflict: If change benefits one function at the expense of another, conflict Impedes the change process. Powerful divisions, such as IBM’s mainframe division, can disrupt change.

If sales fall, R&D wants funding for product development while sales wants to hire more people. Subunit orientations cause coordination problems and slow decision-making. A high level of task interdependence makes change difficult. It is more complicated at top levels by affecting the entire organization.

3.3.1.2 Group-level resistances to change:

Group norms: When change results in different task and role relationships, informal

norms may become invalid, making a new set of norms necessary. People may resist

this.

Group cohesiveness, attraction to the group, is helpful, but if it is too high, the group may resist change. The group may work to maintain its position even at the expense of other groups.

3.3.1.3 Individual-level resistances to change:

Uncertainty and insecurity: Resistance to the uncertainty and insecurity of change results in inertia. Selective perception and retention suggests that people perceive information consistent with their views. If change doesn’t benefit them, they do not endorse it.

Habit: People prefer familiar tasks and tend to return to original behaviors, making change.

3.3.2 Application:

Nokia evaluated stakeholder’s planning to change management by using resistances to change model, which is occurring at the organizational level, group level, or individual level for resistances change. Moreover Nokia’s stakeholder’s Group resistance occurs when members ignore negative information to achieve harmony.

3.3.3 Comment: Nokia does not have any organizational resistances to change for their stakeholder’s change management.

3.4 Create a strategy for managing resistance to change:

3.4.1 Theory:

Strategies for managing resistance to change:

Identify all parties that have a stake in the outcome? Include a way to get all stakeholders involved in the planning and implementation.

Goal in the forefront no matter how maintains Your Focus. Keep the long-term whelmed by the resistance tempting it is to get over.

Use opposition as opportunities to invite really think about the proposed beneath the surface and hear what people changes.

Respect your stakeholders

Value input

Validate concerns

That resistance will go away. Include ways to keep Do not ignore, avoid, or hope the planning and implementation the doors of communication open throughout of the change.

3.4.2 Application: Stakeholders are applied these responsibilities for managing resistance to change of Nokia, which is given below:

Identify the stakeholders whose commitment is required.

For each type of stakeholder, describe the needed change, perceived benefits and expected resistance.

Develop action plans including ones for the stakeholder groups that are not sufficiently committed.

One critical group often ignored is higher-level administration; they must be included one of the key groups.

3.4.3 Comment: Nokia can managing resistance to change by using stakeholder’s strategy for example, stakeholders describe their needs for change, perceived benefits and expected resistances.

Task 2

1.1Discuss models of strategic change:

1.1.1 Theory:

Strategic change is defined as “changes in the content of a firm’s strategy as defined by its scope, resource deployments, competitive advantages, and synergy”.

Hofer and Schendel 1978

Strategic change as a subject has for long become a question of importance, within the strategic management field. The reason to why strategic change is important is “because it represents the means through which an organization maintains co alignment with shifting competitive, technological and social environments”. Strategic change can though damage existing resources and performance especially among organizations highly dependent on human resources; these organizational resources decrease the propensity to adapt strategic change, because of new roles, tasks and circumstances.

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Kraatz & Zajac, 2001

1.1.2 Application:

Nokia developed their organizational strategic change by using a number of mergers and acquisitions (M&As) of other firms with more or less related but different business activities. M&A as well as strategic alliances are a means to obtain the necessary capabilities and are meant to improve the overall performance of the firm. Nokia is now gradually shifting from M&A to alliances in order to strengthen their core capabilities, and divesting and refocusing its business activities instead of diversifying business activities.

1.1.3 Comments: Nokia can develop their organizational strategic change by using a number of mergers and acquisitions (M&A) process because of M&A to obtain the necessary capabilities and to improve the overall performance of the organization.

1.2 Evaluate the relevance of models of strategic change to organisations in the current economy:

1.2.1 Theory:

Supply chain management Model:

Supply chain is operating as efficient as possible and generating the highest level of customer satisfaction at the lowest cost, companies have adopted Supply Chain Management processes and associated technology.

Nokia is in a highly competitive market that is very margin/cost sensitive and equipment companies are less and less able to make enough profit on just the sale of boxes alone. The strategy it has adopted is to move to a service and solutions-orientated model, facilitated by the digitalization of the whole telecoms business. Nokia’s aim has been to create revenue streams from operating the product for the customer or by providing service contracts.

1.2.2 Application:

Nokia Networks has done a great job by using all the best practice approaches to supply chain management model and has applied them to a new area of the supply chain – an area which is much more important in the current market economy.

Nokia using their supply chain to create differentiation in the market place. With this model they are going to be a leader in the transformation of the industry – this company has taken a giant step forward. Nokia Networks operates in a highly competitive global market place where low-cost manufacturers and getting more profit.

1.2.3 Comment: Nokia can evaluate the strategic change for their organisations in the current economy by the application of supply chain management model because of Nokia supply chain management to create differentiation in the market place, which highly operates the competitive global market place. As which Nokia able to earn more profit.

1.3 Assess the value of using strategic intervention techniques in organisations:

1.3.1 Theory:

“Strategic Intervention is a method for assisting people to find empowering meanings for their life circumstances, discover why they do what they do and how they meet their needs in positive and negative ways, the understanding of which helps to promote sustainable change”.

Tony Robbins

Organization Development Interventions:

OD interventions are plans or programs comprised of specific activities designed to effect change in some facet of an organization. In general, organizations that wish to achieve a high degree of organizational change will employ a full range of interventions, including those designed to transform individual and group behavior and attitudes.

1.3.1.1 Individual OD Interventions:

Role negotiation

Management training

Job redesign

Career planning

1.3.1.2 Team OD Interventions:

Team building

Process consultation

Inter-group team building

1.3.1.3 Organizational-wide OD Interventions:

Survey feedback

Confrontation meeting

Structural redesign

Management by objectives (MBO)

1.3.2 Application:

Nokia used organizational development strategic intervention techniques in their organisations. As we discuss on above individual OD of Nokia implies several things like management training, job design. Moreover team OD implies team building and process consultation. This is the strategic intervention of Nokia Ltd.

1.3.3 Comment: Nokia should apply individual organizational development strategic intervention techniques in their organisations because of Individual level strategic intervention gives more advantages for the organization. Nokia redesign job and provide management training methods by applying this intervention technique. That’s why this is important for Nokia.

4.1 Develop appropriate models for change:

4.1.1 Theory:

Organizational change is the movement of an organization from one situation of dealings to another. Organizational change can take many forms. It may involve a change in a company’s structure, strategy, policies, procedures, technology, or culture. The change may be planned years in advance or may be forced upon an organization because of a shift in the environment. Organizational change can be radical and alter the way an organization operates, or it may be incremental and slowly change the way things are done. Nokia applied 5’p model for develop their organizational change.

4.1.2 Application: The 5 P’s Model of Nokia

Principal and Process

People

Performance

Purpose

4.1.2.1 Purpose: This includes the organization’s mission, vision, goals, and objectives, as well as strategies for achieving the vision and mission. Leaders must establish the strategic direction and goals of their organizations as well as the strategies and tactics for achieving them.

4.1.2.2 Principles: Nokia is the honesty base, ethics, and core values to which employees are expected to make a commitment when they are hired. Leaders of Nokia understand the principles upon which their organizations were founded and upon which they currently operate.

4.1.2.3 Processes: Processes are the organizational structures, systems, and procedures that are used to make the products or perform the services that the Nokia provides, as well as the infrastructure and rules that support these systems and procedures. Therefore, Nokia Processes that are well documented and Principles that are well communicated can drive behavior that is necessary to achieve Performance excellence.

4.1.2.4 People: People are the employees who perform work that is consistent with the Principles and Processes of Nokia to achieve its Purpose. Nokia business leaders understand and can align Purpose, Principles, Processes, and People, they are more likely to achieve Performance excellence.

4.1.2.5 Performance: Performance encompasses all the metrics, measurements, and expected results that indicate the status of Nokia and are used as criteria for decision making. It is essential that business leaders understand and establish measurement and feedback systems for their organizations long-term survive and profitability.

4.1.3 Comment: Nokia can develop their organizational change model by using 5’ps model because of 5’ps model implies the organization’s purpose, principal, process, people and performance by which Nokia can achieve their goals and develop organization’s structure, producers and performance measurement for strategic decision making. So 5’p model is very important for develop organizational change.

4.2 Plan to implement a model for change:

4.2.1 Theory:

Implementation of 5’p model:

Implementation is the realization of an application, or execution of a plan, idea, model, design, specification, standard, algorithm, or policy.

The model that we used in our change management is similar to the 5-P Model implemented in this article, These are:

Purpose

Principles

Process

People

Performance

This model may be appropriate based on the nature of the change, the culture of the organization, and the personalities and style of the change leaders. The important thing is to use a model that serves as an anchor to the day-to-day vagaries of change. Whether we’re using the 5-P Model, or any number of other change management models, we can be successful.

4.2.2 Application:

Implementation of 5’p Model of Nokia:

The main purpose of Nokia is that, to achieve organizational mission, vision and goals by providing their principal like, good customer service, qualities of product supply, cost reduction and profit maximization. Moreover, Nokia’s Processes are the developing organizational structures, systems, and procedures that are used to make the qualities of products or perform the best services by providing their expert technologies, Employees and market leaders. Performance is essential because the market leaders of Nokia understand and establish measurement and feedback systems for their organizations long-term survive and profitability.

4.2.3 Comment: The implementation of 5’p model of Nokia should apply in the organization because it will show the overview of organization’s current objectives, structure and technologies by which company can take further step of change model.

4.3 Develop appropriate measures to monitor progress:

4.3.1 Theory:

Developing Monitoring progress is about keeping track of how the work with others is going, making sure you are ‘on task’ and ‘on time’. Monitoring progress in working with others involves you considering your progress in:

managing a group activity to enable the group to achieve its goals effectively and efficiently;

establishing and maintaining co-operative working relationships, exchanging feedback and agreeing ways to solve difficulties; and

Monitoring and critically reflecting on your use of skills in working with others, and adapting your strategy as necessary.

4.3.2 Application:

Nokia develop in their organization’s monitoring progress by using appropriate measuring tools, which is given below:

Identify Problems – Surveys are can be very effective in identify problems areas before they become serious, especially those that are hidden from senior management.

Training – Lack of proper training is a common cause of dissatisfaction among employees and can lead to more serious problems such as stress.

Communication – For Nokia to run efficiently good internal and external communications are essential, surveys can provide a method to help organizations to monitor and measure how well an organization communicates.

Goals and Objectives – Nokia can measure and monitor the extent that the personnel are aligned with the senior management’s business goals and objectives.

4.3.3 Comment: Nokia can develop organization’s monitor progress by measuring tools which is discussed on above. Nokia measures organization’s current monitor progress by Identify problems, benchmark, training and goals and objective and can take decision for develop planning to monitor progress.