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Resistance to Change (Nokia Case Study)


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What organisations have to face when they bring an organisational change.
Nokia is used as an example

Published in: Business
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Resistance to Change (Nokia Case Study)

  1. 1. Presented by - Yashaswini Agarwal 2016
  2. 2. Outline 1. Why organisations need change? 2. Effects and outcomes 3. Resistance 4. Company introduction 5. Specific questions addressed
  3. 3. Why change ? CustomerNeeds As timepasses by theneeds of the consumers change. This could be due to increased awareness, new lifestyles, new trends or technological advancements.If the customerneeds are not taken into consideration, the firmshall fail in themarket. New technology New methodsof production, packing, delivery, disposal etc should be adopted. Usually thenew technologyleads to increase in productivity level, reduction in manual labour work and cost saving. Also customersatisfaction is enhanced. Adapting new technologyalso shows thatcompany is welcoming change and improves theimage of the firmin themarket. Meet competition Companies performanceand products need to be competitivein the current market.If the companydoes not provide products/servicesthatare up to the marketexpectations, otherfirms will gradually takeoverits position.
  4. 4. Change in management structure Changes in the marketwill ultimately forcethe company to bring about a change in its structute.This mayinvolve job descriptions to be reviwed, positions to be cut down, creation of new posts etc. In extremelycomplex structure,power is transferredand also reporting authorities changed. This all is done to increase performanceand efficiency. Performance goal gap Targets are set each yearand performance of thefirmis measured against those benchmarks.If theperformanceresults are not as expected, the managementwill need to introduce changes in theconcerned function to meet thegoals set. Mergers and acquisitions When companies merger/ or are acquired, the managementneed to come up with new guidelines and corporate cultutre.It may not be entirely new, but it is their responsibility to bring in therequired change so thattheemployees know thenew work culture and performeas expected. In large organisation, such mergershavea great impact on the organisational structureand reporting authorities; management should make sure thereis no ambiguity, as this can makeemployees redundant and encourage absentism .
  5. 5. Positive Outcomes  Utilizing available resources effectively  Addressing employees concerns  Reducing risk and inefficiency  Better prepared for challenges
  6. 6. Negative Outcomes  Work pressure – mental stress, physical tiredness, negative effecton employee performanceleasing to absenteeism.  Unhappy stakeholders (shareholders, employees, customers etc)  Lack of skill – inadequate training for the changed/modified job, current skills don’t match the requirement ‘A 60-70%failureratefororganizationalchangeprojects — a statistic that has stayed constant from the 1970’s to the present.’
  7. 7.  Unhappy customers may lead to shrinking of current market share – Customers may be extremely well adjusted to the previous product/service. A change may not be well accepted(could be for multiple reasons – extremely advanced technology, cultural clash etc).  Resistance from employees - Vast scale change without prior employee opinion/consent will lead to resistance.
  8. 8. Resistance  Disruption of routines  Unknown and threat  Vested interests  Extra workload
  9. 9. Nokia 1865 - Co founded 1982 - First car phone 1987 - First hand held phone 1998- World’s largest phone manufacturer 2007- Market receives Apples phone 2008 - Google launches android 2010 – Project MeeGo announced (Nokia and Intel ) 2010 – Stepehn Elop appointed CEO
  10. 10. Identify and describe key aspects of resistance to change at Nokia.
  11. 11.  Cultural Effect Nokia was a Finnish company. Finnish culture does not promote uncertainity. With the change in the company, no clear communication and no certainity of job security, many employees felt at a risk and took to protest. The employees were not comfortable with the appointment of a non- finnish CEO. This had happened first time in the history of the company. Cultural difference made it difficult for everyone to adjust. Before 2011, Nokia paired with Intel’s Linux based platform Memo and Moblin to develop MeeGo. With the new CEO joining, this project was earlier on hold and later shelved. Employees had been working on this project and had invested time and effort. The sudden change was not welcomed by the employees.  Giving up old projects fully
  12. 12. The speed of changes was also a problem. Appointing a new non-finnish CEO and projects changing, collaborating companies chaning. In all this, employees opinion and concerns were over shadowed. Statements from employees say that MeeGo was a very feasible project, however, it was cancelled.  New strategy developed without employees concerns  Waste of existing knowledge Employees were working on MeeGo and had the needed expertise. With change in projects, there was a waste of the knowledge that the programmers already had. Also new projects and work required the company to invest in training for new skill.
  13. 13.  Effect on job contract Nokia had outsourced Symbian to Accenture. Job termination or transfers.  Resource allocation Earlier there was heavy resource usage by Symbian as that was the focus of the company. Focus then shifted on Microsoft’s Windows platform.
  14. 14.  Holding employees responsible for failure The CEO’s letter was not supporting nor calming for the employees who were in this turmoil of changes. Elop’s letter indicated that employees were themselves the reason for the downturn of the company.
  15. 15. Describe the process incorporated to overcome resistance to change at Nokia, and how it addressed key aspects of resistance to change.
  16. 16.  Freedom to develop something ground breaking  Flexible deal with partner company  Facts about layoffs  Encouraged employee interaction
  17. 17. THE END
  18. 18. References 1. e5640aba3fc1%40sessionmgr114&vid=1&hid=101 2. change-and-what-they-can-change/ 3. 4. 5. 6. 7. 8. 9. 10.