(Organization culture change) Bishwjit n Swati
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Transcript of (Organization culture change) Bishwjit n Swati
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In order to survive,
organizations and their
cultures must continuously evolve
and change.
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Changing Organizational
Culture
Presented By:Swati Kinger , Bishwjit GhoshalDeptt of Pharmaceutical Mgmt.NIPER, Mohali
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FLOW OF PRESENTATION
Organizational Culture
Conditions prompting change
Managing Organizational Change
Organizational Culture Issues
Targets for change
Organizational Change: An empirical study on Nokia
Organizational Change at Unilever
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Organization Culture A system of shared values,
assumptions, beliefs, and norms that unite the members of an organization.
Reflects employees’ views about “the way things are done around here.”
The culture specific to each firm affects how employees feel and act and the type of employee hired and retained by the company.
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Conditions prompting change
Economic crisis
Changes in laws or regulations
Social developments
Global competition
Demographic trends
Explosive technological changes
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Managing Organizational Change
Organization culture can facilitate or inhibit change in an organization.
A firm attempts to change organizational culture because the current culture hinders the attainment of corporate goals.
Environmental and internal forces can stimulate the need for organization change.
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Environmental Forces Put pressure on how a firm conducts its business and
its relationships with customers, suppliers, and
employees.
Environmental forces include:
Technology
Market forces
Political and regulatory forces
Social trends
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Internal Forces
Come from decisions made within the company.
May originate with top executives and managers and travel in a top-down direction.
May originate with front-line employees or labor unions and travel in a bottom-up direction.
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Organization Culture Issues
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Three important issues in an Organization’s Culture
Ethics
Diversity of employees
Leadership behavior
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Targets for Change
Individuals
Groups
The Organization
The Environment
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Individual Targets
Changes in this area are triggered by new
staffing strategies or by an effort to enhance
workforce diversity.
The number and skills of the human resource
component.
Improving levels of employee motivation and
performance.
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Group Targets
Involves changes in the nature of the relationship between managers and subordinates or the
relationships within work groups.
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Organizational Targets Changes in any of the following areas:
Basic goals and strategies of the organization
Products, quality, or services offered
Organizational structure
The composition of work units
Organizational processes such as reward, communication, or information processing system
The culture
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Environmental Targets
Involves changing sectors of an organization’s
environment.
For example, changes in products or services
offered may require new technology or a new
distribution system.
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ORGANIZATIONAL CHANGE:
AN EMPIRICAL STUDY ON NOKIA
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WHY NOKIA’S ORGANIZATIONAL CHANGES ARE NECESSARY ?
Source: Gartner (2014)
23.9
18.7
3.2
2219.1
8.3
24.6
13.9
7.5
SAMSUNG NOKIA APPLE
Q3 2011 Market Share 2012 Market Share 2013 Market Share
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Mapping Capabilities
2006
Joined Microsoft
2011
MAJOR ORGANIZATIONAL CHANGES IN NOKIA
Moved to Microsoft
2013
Joint Venture
2007
Core Strategy
1990
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Key change triggersg change
•Rise of Touch Based SmartphonesNokia failed to respond to growing touch based smartphones
while HTC, iPhone took the full advantage
•MonopolyThe Finnish phone maker launched phones with innovative
features and different form factors to quickly respond to the market’s needs, which led it to become the largest handset manufacturer in the world
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In January 2007, Apple launched the iPonary smartphone that packs with a large capacitive touch screen that supports multi-touch gestures.
•Bureaucracy
An ex-manager in Nokia estimated that Nokia used to have over 300 Vice Presidents and Senior Vice Presidents around the globe.
•Market disruption brought by the Apple iPhone
CONTD.
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Sources of Resistance to Change
Resistance to
Change
Inside the
organization:
Employees’ resistance
Outside the
organization :
Markets’ resistance
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Employee’s Resistance
• Losing job
• Changes in job roleFear of employee
• Holding their excellence as the cause of failure
• Getting into the partnership with Microsoft
Disagreement with management
• Key personnel
• Skilled employees
• Lay-off by Microsoft
Wave of resignation
• Uncertainty avoidance
• Masculine vs. FeminineCultural difference
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Market’s Resistance
• Alliance of Nokia and Microsoft
• Embracing Windows as operating platform
Customer’s resistance
• Fear of losing business of international calling
• Choosing MS as strategic partner
Network operator and Intel’s resistance
• Principles of open source vs. proprietary platform
• Decrease in the value of market share
Software developer’s and shareholder’s
resistance
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Organization Change at Unilever
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Decentralized Structure of Unilever before 1990’s
Unilever was organized on a decentralized basis
In Europe the company had 17 subsidiaries in the early 1990s, each
focused on a different national market
Subsidiary companies in each major national market were responsible
for the production, marketing, sales and distribution of products in that
market
Each was a profit center and each was held accountable for its own
performance
The structure allowed local managers to match product offerings
Marketing strategy to local tastes and preferences
To alter sales and distribution strategies to fit the prevailing retail
systems
To drive to localization, Unilever recruited local managers to run local
organization
To build a common organizational culture among its managers
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Problems at Unilever
Unilever’s Market Capitalization of about £ 82 Billion in June
1999 Shrank to £ 20 billion by January 2000 (Stock Prices
Plunged)
Company’s existing brand structure had lost its focus
Unilever was criticized for spending large amounts of funds
due to frequent restructuring over the year
Unilever market share was taking a big time hit
There was no fit between the company’s organizational
structure and its strategies.
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Reason for, the need or frequent restructuring at
Unilever???
• Early 1990s the competitive environment was changing.
• Creation of a single market in 1992 in European Union.
• This made it possible to manufacture certain items such as detergents
and margarine at favorable central
•Unilever introduced a new organizational architecture based on regional
business groups, each of which contained product division
•Unfortunately for Unilever, some of its global competitors moved more
rapidly to exploit this changes in the competitive environment
•To reestablish a fit between competitive environment, Unilever had to
embrace the difficult process of strategic & Organizational Change
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Current Structure The Day to day operation are supervised by the National Management
comprising the Vice Chairman, Managing Director (HPC), Managing
Director (Foods) and the Finance Director
Each division is self-sufficient with dedicated resources and assets in sales,
marketing, commercial, and manufacturing
In Marketing each category has a Marketing Manager who heads a team
of Brand Managers dedicated to each or a group of brands
Unilever grouped its worldwide operations into 2 global division. Foods
and Home and Personal Care. It uses the worldwide geographic area
structure
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“Cultures change when an organization discovers,
invents or develops solutions to problems it
faces.”
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