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MANAGEMENT POLICY DR. BENJAMIN GUEVARRA Professor Reported by ANGELITO L. ESTRADA

Transforming organization

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MANAGEMENT POLICY

DR. BENJAMIN GUEVARRA

Professor

Reported by

ANGELITO L. ESTRADA

Presented by

Angelito Estrada

Why transformation is necessary in an organization?

External forces contributed to organizational transformation

1. The sharpening of global competition among countries

and companies including the rapid industrialization of

many developing nations

2. The development of technologies that make existing

strategies obsolete and even change industry structures

3. The development of progressively higher standard of

winning and keeping customers

4. The impact of larger and more fluid financial markets

that facilitated major transfers – voluntary and otherwise

of corporate control

5. The growing utilization of different organizational forms,

including strategic alliances

IN ADDITION TO THESE EXTERNAL DYNAMICS THAT CAN MAKE COMPETITIVE STRATEGIES AND CORE CAPABILITIES OBSOLETE AND DRAMATICALLY RAISE PERFORMANCE STANDARDS, INTERNAL DEVELOPMENTS CAN CAUSE DETERIORATION IN A COMPANY’S ORGANIZATIONAL CAPABILITY

WHAT ARE

INGREDIENTS OF

SUCCESSFUL

PLANNED CHANGE?

EACH INGREDIENT IS ESSENTIAL – THE ABSENCE OR THE WEAKNESS OF ANY ONE OF THE THREE CAN DOOM A PLANNED

CHANGE.

Without a significant level of motivation to depart

from the status quo, a vision of the future remains a

dream, and transition steps will be implemented

pro forma, if at all.

1. Motivation to change

Without a vision or model of the future to guide

change initiatives, high motivation to change and

effective transition processes will produce random

change initiatives potentially inconsistent in their

direction.

2. Visions of the future

Without competent and effective management of

transition processes, a strong motivation of change

and a clear sense of direction for the change will

produce nothing but frustration.

3. Transition Processes

INGREDIENTS OF SUCCESSFUL PLANNED CHANGE

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Building Motivation What motivates

you to pursue

your MBA?

Leaders can generate and sharpen

two types of motivation for change –

dissatisfaction with the status quo and

positive interest in an alternative

future. Dissatisfaction can push an

organization toward change, and

interest in an attractive alternative

future can pull it.

Building Motivation

FORMULATING

VISION

However you label it – vision, model, desired

for future state, goals, and so on – some

preference about the future must provide a

foundation for planned change in strategy

and organization. Even though the picture

evolves in direction and concreteness, and

coherent transformation is impossible

without some target.

FORMULATING VISION

e.g. dart (game)

Figure A

The bull’s-eye vision called for a type of attention to the customer

to the customer’s needs that required internal changes in

virtually every department. Identifying the three means made

clear that profound changes were required in the

management of employees, the engineering of businesses, the administrative and operating

processes, and the entire organization’s mindset toward the

customer.

Champion change process

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MANAGING THE PROCESS OF CHANGE

MANAGING THE PROCESS OF CHANGE

The process of changing goals and redesigning the

organization as well as developing the broad outlines of an

implementation plan is always the early and central concern

of the company’s leadership.

Depending on the approached taken relatively few may be

involved or a large segment of the organization may be

engaged.

That choice is fundamental for the leaders.

The general manager must make a judgment as to how

important it is to involve members and layers of the

organization in order to enlist greater cooperation and

commitment.

CONTINUAL RENEWAL

CONTINUAL RENEWAL

The situation in a company that brings a general

manager to plan the kind of fundamental change that we

have called transformation is not inevitable – although

the long list of great companies that fell from the heavens

in the 1980s and 1990s is a caution.

This situation can be avoided if managers regularly track

the changing environment, frequently test the premises

and logic of their business strategies, and continually

review the liveliness of their organization.

The notion of learning becomes a part of the social

contract between the organization and its members.

Established 1860 as rubber company 1960’s engage in mobile phone 1987 Introduced the first Global System For Mobile (GSM) 1993 market share is constantly increasing

2000-2011 Dominate the market using OS called Symbian System until 2011 On 8 February 2012, Nokia Corp. announced 4,000 layoffs at smartphone manufacturing plants in Europe by the end of 2012 to move assembly closer to component suppliers in Asia. On 14 June 2012, Nokia announced 10,000 layoffs globally by the end of 2013 and shut production and research sites in Finland, Germany and Canada in line with continuing losses and the stock price falling to its lowest point since 1996.

In total, Nokia laid off 24,500 employees by the end of 2013. On 18 June 2012, Moody's downgraded Nokia's bond rating to junk. Nokia CEO admitted that the company's inability to foresee rapid changes in the mobile phone industry was one of the major reasons for the problems. 2013: New products, recovering market share, lack of profit In January 2013, Nokia reported 6.6 million smartphone sales for Q4 2012 consisting of 2.2 million Symbian and 4.4 million sales of Lumia devices (Windows Phone 7 and 8).In North America, only 700,000 mobile phones have been sold including smartphones. In May 2013 Nokia released the Asha platform for its low-end borderline smartphone devices. The Verge commented that this may be a recognition on the part of Nokia that they are unable to move Windows Phone into the bottom end of smartphone

devices fast enough and may be "hedging their commitment" to the Windows Phone platform. In the same month, Nokia announced its partnership with the world's largest cellular operator China Mobile to offer Nokia's new Windows-based phone, the Lumia 920, as Lumia 920T, an exclusive Chinese variant. The partnership was a bid by Nokia to connect with China Mobile's 700 million-person customer base. Following the second quarter of 2013, Nokia made an operating loss of €115m (£98.8m), with revenues falling 24% to €5.7bn, despite sales figures for the Lumia exceeding those of BlackBerry's handsets during the same period. Over the nine-quarters prior to the second quarter of 2013, Nokia sustained €4.1 billion worth of operating losses. The company experienced particular problems in both China and the U.S.; in the former, Nokia's handset revenues are the lowest since 2002, while in the U.S., Francisco

Jeronimo, analyst for research company IDC, stated: "Nokia continues to show no signs of recovery in the US market. High investments, high expectations, low results." In July 2013, Nokia announced that Lumia sales were 7.4 million for the second quarter of the year – a record high.

Phase 1 Phase 2 Phase 3 Phase 4

Motivation – Dissatisfaction of the

status quo and positive interest in an future

alternative

Vision – Transformation is

impossible without some target

Process – Changing goals and

redesigning the organization and

implementation plan

Continual Renewal- In a fast changing world and era of globalization, updates

is necessary in every organization

SUMMARY

The first three phase are the key ingredients of a successful planned change, while continual renewal is mandatory in able for the company or organization to survive.

ANY QUESTIONS?