The document discusses changing organizational culture. It provides information on: 1) Organizational culture refers to shared values, assumptions, beliefs and norms that unite employees. Culture affects how employees act and the type hired. 2) Organizations must change culture to adapt to new conditions like economic crises, laws, competition and technology. 3) Managing change involves understanding environmental and internal forces prompting it. Targets for change include individuals, groups, the organization and its environment. Successful changes require addressing employee and market resistance.

1. In order to survive,
organizations and their
cultures must
continuously evolve
and change.

2. Changing Organizational
Culture
Presented By:
Swati Kinger , Bishwjit Ghoshal
Deptt of Pharmaceutical Mgmt.
NIPER, Mohali

3. 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

4. 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.

5. Conditions prompting change
 Economic crisis
 Changes in laws or regulations
 Social developments
 Global competition
 Demographic trends
 Explosive technological changes

6. 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.

7. 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

8. InternalForces
 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.

9. Organization Culture
Issues

10. Three important issues in an
Organization’s Culture
Ethics
Diversity of employees
Leadership behavior

11. Targets for Change
 Individuals
 Groups
 The Organization
 The Environment

12. 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.

13. Group Targets
Involves changes in the nature of the relationship
between managers and subordinates or the
relationships within work groups.

14. 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

15. 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.

16. ORGANIZATIONAL CHANGE:
AN EMPIRICAL STUDY ON NOKIA

17. WHY NOKIA’S ORGANIZATIONAL CHANGES ARE
NECESSARY ?
Source: Gartner (2014)
23.9
18.7
3.2
22
19.1
8.3
24.6
13.9
7.5
SAMSUNG NOKIA APPLE
Q3 2011 Market Share 2012 Market Share 2013 Market Share

18. Mapping Capabilities
2006
Joined Microsoft
2011
MAJOR ORGANIZATIONAL CHANGES IN NOKIA
Moved to Microsoft
2013
Joint Venture
2007
Core Strategy
1990

19. Key change triggers
g change
•Rise of Touch Based Smartphones
Nokia failed to respond to growing touch based smartphones
while HTC, iPhone took the full advantage
•Monopoly
The 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

20. 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.

21. Sources of Resistance to Change
Resistance to
Change
Inside the
organization:
Employees’ resistance
Outside the
organization :
Markets’ resistance

22. 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

23. 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

24. Organization Change at Unilever

25. 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

26. 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.

27. 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

28. 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

29. “Cultures change when an
organization discovers,
invents or develops
solutions to problems it
faces.”