In order to survive,

organizations and their

cultures must continuously evolve

and change.

Changing Organizational

Culture

Presented By:Swati Kinger , Bishwjit GhoshalDeptt of Pharmaceutical Mgmt.NIPER, Mohali

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

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.

Conditions prompting change

Economic crisis

Changes in laws or regulations

Social developments

Global competition

Demographic trends

Explosive technological changes

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.

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

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.

Organization Culture Issues

Three important issues in an Organization’s Culture

Ethics

Diversity of employees

Leadership behavior

Targets for Change

Individuals

Groups

The Organization

The Environment

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.

Group Targets

Involves changes in the nature of the relationship between managers and subordinates or the

relationships within work groups.

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

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.

ORGANIZATIONAL CHANGE:

AN EMPIRICAL STUDY ON NOKIA

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

Mapping Capabilities

2006

Joined Microsoft

2011

MAJOR ORGANIZATIONAL CHANGES IN NOKIA

Moved to Microsoft

2013

Joint Venture

2007

Core Strategy

1990

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

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.

Sources of Resistance to Change

Resistance to

Change

Inside the

organization:

Employees’ resistance

Outside the

organization :

Markets’ resistance

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

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

Organization Change at Unilever

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

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.

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

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

“Cultures change when an organization discovers,

invents or develops solutions to problems it

faces.”