Exploration of a Change Initiative – Final Paper Instructions
We have determined that change is inevitable and subject to a number of variables attributing to the success or failure of the change process. The Final Paper is an exploration of a change initiative that you have personally experienced or researched. The paper should demonstrate your knowledge of the change process through a comprehensive analysis and discussion of the following aspects of organizational change. Your paper must include:
- An identification and description of a professional change initiative personally experienced or researched.
- A discussion of the change initiative as seen through the eyes of the leader and the follower.
- A discussion of the successes and failures experienced during the change event.
- An analysis of the concepts and theories used to facilitate the change process.
- An evaluation of the impact of the change upon the organization.
- A discussion on the sustainability of the change effort.
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Acquisition of Part of Nokia by Microsoft Company – Exploration of a Change Initiative Personally Researched
Change has turned out to be a part of every corporate existence and personal life. Most organizations are faced by change urgency due to changing internal and external business factors. According to Jalagat (2016), change is inevitable when it happens, hence it is irresistible. The inevitable nature of change has made various organizations to consider and adopt it as part of the existence of the company. Change is defined as any modification in processes, structure, employees, and management among other related activities. Subsequently, organizational change is defined as the practical observation in an organizational variations entity in the state, quality or shape over time. Any change efforts and initiatives according to Jalagat (2016) need to align with the corporate objectives and goals to guarantee organizational success. This implies that change management plays an essential role in responding to and handling change efficiently and in countering the change resistance notion. Change can bring negative and positive effects on organizational results. In this regard change management has turned to be an urgent concern. This paper focuses on exploring a change initiative that I have researched. The paper describes the change initiative, how it was perceived by participants and leaders and its success and failures. The paper also explores various change models and theories engaged in this change initiative.
Identification and Description of a Professional Change Initiative
The change initiative that will be regarded in this case is the Nokia change initiative that involves the acquisition of part of Nokia by Microsoft Company. Nokia Company felt the urge for change after experiencing a decade of struggle with its sale. Earlier the company was recorded as the leading mobile phone company in the world. However, the company was static to change toward the modern phone technology that resulted in the development of the smartphone. This together with the emergency of new, more innovative competitors made it hard for the company to keep up with the changing market competition. In this regard, the company experienced a grave decline in its sales revenue and profit. The company tried several changes including job cuts to reduce the cost of operation, with the hope of increasing its profitability. When this failed to attain the intended purpose the company management considered strategic partnership as a way of enhancing its competitiveness in the market. The strategic partnership between Nokia and Microsoft was meant to improve Nokia’s phone technology to developing smartphones.
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Unlike other Nokia competitors who used android and Apple OS to create their phones, Nokia hoped to use Microsoft windows software to develop its smartphones. The company’s aim for change was to be able to integrate its hardware technology with Microsoft software technology to come up with a more unique smartphone that would be able to compete with the giant phone companies such as Samsung and iPhones in the market. The strategic partnership between Nokia and Microsoft revived the company’s survival in the market. However, this did not happen with other major structural and employee changes in the market. The change resulted in the loss of jobs for some employees in Nokia Company, the need for workers to fit in Microsoft culture or to work together with Microsoft workers who had a completely different organizational culture. There was also a change of command about phone development and integration in software. The sections below review how the strategic partnership between Nokia and Microsoft created change in the Nokia Company (Sign, 2014).
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Change Initiative as Seen through the Eyes of the Leader and the Follower
The change initiative in Nokia was initiated by Nokia and Microsoft management. This was a planned change that involved several meetings and extensive discussion before the final decision was made. In the eyes of the Nokia leaders, this was an opportunity for the company to reclaim its market share and to avoid further losses. The acquisition offer also allowed the company to obtain money to invest in hardware development using modern technology, which has been the company’s main strength since its development. The Nokia leader focused on the financial advantage of the change. The company had been trying to manage its cost for a long time, after its sales were affected by obsolete technology, making it hard to compete with modern phone companies that were operating in a changing technology environment. Nokia needed to catch-up with the modern technology. To do this, the company needed to invest in research and development. The company also lacked software expertise and required the aid of another software specialized company to fulfill its dream of reclaiming phone market share in the world. This means the main focus of Nokia leaders to this change was to save the company from collapsing, to reclaim its market share by defeating other leading competitors in the market, and to invest more in research and development to be able to integrate modern phone technology in its hardware department. To the leaders, the change initiative was a great breakthrough to the Nokia Company (Khan, Raza & George, 2017).
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On the contrary, Nokia followers did not perceive the initiative positively. The company had already experienced serious job cuts as a way of managing cost an addressing a decline in their product demand in the market. Thus, to the followers, this was another threat to their jobs. The job insecurity surrounded most of them, especially those who were not working in the technology department. There was serious job insecurity in the company, with the majority expecting to lose their job as others feared losing their position of hierarchy as the two companies merge. Followers also expected other undesirable changes to come along with the new acquisition process. These included the need to work with another group of employees from a different organizational culture. There was a fear of harassment. Nokia employees feared that Microsoft workers would act superior to them as their company was the superior party in the strategic partnership. They also feared that they will be forced to change their work procedures and practices to fit in Microsoft culture. Nokia had Finnish culture and workers feared to work with a CEO in non-Finnish culture. Other fears included change in employees’ job roles, working under new management and supervision, loss of their organization culture, and the fear of their general ability to cope in a new work environment (Sharma, 2014).
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The acquisition was also negatively viewed by trusted Nokia customers and most of the investors. Microsoft’s phone operating system (OS) had not been used before. This was a new venture and Nokia decided to take a gamble with it. Customers did not trust Windows viability as a phone OS especially because the OS had experienced several security challenges as a computer operating system. Besides, android had already dominated the market and attracted a huge audience. In this regard, Nokia partners feared that the use of Windows may not be able to attract a huge number of audiences in the market. They thus distrusted the use of this acquisition to improve sales and feared for the company’s future direction if the acquisition failed to give the anticipated results (Khan, Raza & George, 2017).
Analysis of the Concepts and Theories Used to Facilitate the Change Process
The Nokia change theory was based on the Lewins three steps change model (Khan & Hashim, 2014). This involved unfreezing the company from its culture, structure, work practice, and production business. The company was moving out of its status quo, especially in terms of manufacturing technology, to adopt new technology that involved the creation of smartphones integrated with Microsoft’s phone Windows OS. The company also had to change its culture to a new organizational culture. It had to integrate its operation procedure with that of Microsoft to create a new product. The company thus needed to unfreeze from its normal organizational structure and operational status quo to prepare for new organizational structure, culture and operation procedure. The acquisition process can be termed as the movement stage. Nokia used acquisition to move from its past state into a new state. In this state, Nokia was integrated into Microsoft organization and a new operational procedure was defined. Nokia employees were integrated into a new cultural environment, by learning new rules and regulations, being assigned to new operating positions and new job roles, or being introduced to change of the team members among other things. Once the change process was effectively integrated into the change leaders’ satisfaction, the refreezing process took place. This resulted in the creation of a new permanent state in which the organization needed to adapt to and to maintain to ensure change sustainability (Khan & Hashim, 2014).
Nokia also employed Kotter’s eight stages of change (Teczke, Bespayeva & Bugubayeva, 2017). The first stage involved creating urgency for change. Nokia’s urgency for change was created by declining sales, sales revenue, and company profitability. The company was experiencing a decline in its market share, as its competitors with more modern phone designs took over. The iOS and Android had taken over Nokia Market shares, creating need for change to reclaim the lost glory. To manage this, Nokia needed to partner with Microsoft Company to create a new and unique product to compete with iOS and Android. The second steps involve forming a powerful guild coalition to lead in the change. Nokia managed this by integrating its employees, customers and the community in the change process. The next stage involved creating a vision for change. The company main vision was reclaiming its market share in the cellphone market by changing from its normal simple cellphone to develop a smartphone. The next step involved communicating the change vision to the company’s stakeholders. The company managers communicated the change vision to its employees’ verbally in physical meetings and through departmental memos. The managers also focused on developing workers’ skills to assist the company to attain its full potential and to meet its business objectives (Teczke, Bespayeva & Bugubayeva, 2017).
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The fifth step involved eliminating change obstacles that included change resistance among other things. Effective communication with workers and customers played a great role in reducing change resistance. Another major obstacle was the lack of finances, an issue that was addressed by forming a partnership with Microsoft, which would assist in funding the change initiative. The partnership eliminated the software development and maintenance cost, by ensuring that that is Microsoft’s cost in the deal. The sixth step involved creating short-term wins. The managers managed this by actively picking talented and skilled workers and projects that seemed to be more probable to work extremely well and with a high level of success earlier in the process of change. This created hope for a successful change in the long run. It also built guild coalition confidence in the leaders of change, by showing that their initiative works, and hence likely to be successful. Short-term wins also motivated the guild coalition to employ more effort for the long-term win and reduce change resistance among those who were still doubtful of change success. Kotter’s 7th step involved building on the change. In this stage, the two companies’ collaboration achieved at this stage accelerated the change via a new path, focused on reinforcing the platform of mobile devices, reclaiming the smartphone leadership, and realizing future investments. The last step involved integrating the changes in the new Microsoft-Nokia agreed culture. The change was inevitable for Nokia. Nokia had to abandon its old development model to depend on Microsoft’s Windows mobile phone platform. This involved adopting the change to be part of the Microsoft organizational culture. Nokia was absorbed by Microsoft. The company had to adapt and practice the new agreed operational culture, follow the new form of management guidance and practice new product development practice. This stage focused on making the new practices a habit and ensuring that it is effectively followed by both Nokia and Microsoft part working with Nokia to build a new culture (Teczke, Bespayeva & Bugubayeva, 2017).
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Nokia also used communication as a way of facilitating change and fighting change resistance. Nokia was used to Finnish culture for 145 years it had been in operation. This is a culture that does not embrace uncertainty. The company only worked in the environment it was sure of. The introduction changes exposed the company into a new non-Finnish culture that the company had never experienced. The introduction of change brought about job insecurity issues and unclear communication on the future operations of the company. This resulted in an eruption of workers’ demonstration and protest as the majority of them felt at risk. The change also rejected MeeGo and Symbian platform in favor of a foreign Microsoft platform a move that angered the company employees and Nokia partners. The new changes resulted in the termination of some development projects that were underway, a move that sparked more resistance (Khan, Raza & George, 2017). To address the resistance, the company employed effective communication. This ensured that the employees were well informed of the company’s current financial situation and the need for change. Communication played a great role in making it clear on how the change will impact most of them. Although most workers were not comfortable with the change, effective communication ensured that workers understand the company’s position and intention for change. The company also tried to support workers to be able to cope with change by developing their skills to fit in the new organizational model. Employment of two way communication assisted the change leaders to understand workers fears and to develop measures to address them. This ensured that the majority were comfortable with the change in the long-run (Malek & Yazdanifard, 2012). Other measures to address change resistance included offering fair compensation and the establishment of a good workers management system to receive complaints and to offer feedback.
Evaluation of the Impact of the Change upon the Organization
The Nokia change initiative resulted in the development of the first Nokia smartphone with windows as its operating system, Window Phone 7. The phone registered high sales than experienced before in the company. However, it did not manage to beat its competitors in the market. The new products managed to offer Xbox music, skype, SkyDrive, OneNote and Outlook.com among other features. There was a great improvement in the new phone technology, though the product still appeared to be inferior to that of its competitors in the market. The change also resulted in a massive loss of jobs in the company. About 18000 individuals working in Nokia devices and service division lost their jobs as a result of introduction to new technology. Other changes that were noted to occur following the change include a decline in Microsoft share value and an increase in Nokia share value. Nokia was also able to address its financing issues
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The Sustainability of the Change Effort
The strategic partnership between Nokia and Microsoft resulted in the development of Smartphones bearing Nokia hardware and Microsoft software. This change played a great role in reviving the financial position of Nokia and reclaiming part of its market share. Although the change was characterized by a high level of resistance, the two companies have managed to maintain the change since it happened in 2013. The two companies adopted the new practices of developing Nokia smartphones and embraced it into a company habit or norms, making it a culture. The change has since been operation, with Nokia phone being known today in the market as a unique smartphone with Microsoft operating system. Since the acquisition, the company has managed to develop several Nokia Smartphone series that are sold across the globe. The company has also managed to reclaim about 13% popularity in the smartphone market, performing better than iOS though highly below android. The change can thus be regarded to be sustainable and may eventually attain the change vision or reclaiming its leading position in the market, though not without other major changes in the future
Change is a continuous process that happens in the life of every human being and also in business organizations. Business organizations are faced with different external and internal factors that push them to change. Although change is inevitable, change is known to bring both positive and negative effects. The paper discusses change initiative that took place in Nokia in 2013. Nokia considered having a strategic partnership with Microsoft after experiencing a hard financial situation for almost a decade following past poor decision making on embracing technology change in their mobile phone design. The company needed to change its mobile phone to a smartphone, a move that could only be effectively facilitated by Microsoft. Although the change process was not easy, the company managed to merge the two companies to create what is known today as a Nokia smartphone. The change has resulted in positive achievement in terms of market share and sales revenue but also resulted in the loss of jobs and customers’ trust in the market. Despite the positive achievement Nokia overall vision of reclaiming its leading position in the smartphone market is yet to be achieved.