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Strategic changes in the business environment occur for many reasons. There are many reasons why an organization chooses to change its business strategy. It may be due to the need to maximize profit and retain stability in the business, as a result of internal pressures. The other cause may be due to economic pressure that frequently happens due to global economic changes. Changes in the corporate strategy are usually done by the use of the strategic planning process, and it starts with the creation of a mission statement that holds the leader's dream of where they want to see their company in the years to come. The sample highlights the complete process by taking the example of strategic change at Nokia.
Introduction to Strategic Change at Nokia
Strategic change in any of the business occurs when the organization moves from one state to another and there are numerous reasons for its happenings. Strategic change has variety of options from incremental to radical, although it is mainly implemented due to changes in the corporate strategy. There are several reasons due to which a firm might take a decision to transform its business strategy, it may be the outcome of internal pressures for instance the need to maximize profit and maintain stability in the business. The other reason could be of external pressure that extensively occurs due t changes in the global economy. So, the need for changes arise both from internal and external factors and these are often required to sustain a continuous competitive advantage (Caluwé and Vermaak, 2003).
Changes in the business strategy are generally attained through the utilization of strategic planning process and it begins with the development of a mission statement that freezes the vision of leader where do they want to see their organization in the future years. Organizational leaders will set precise and attainable goals that must be assembled to further move in appropriate direction in the business. Finally the organizational leaders will develop the business strategies intended to align the day-to-day working activities of the firm and meet the organizational goals. Strategic changes are devised mainly because of the intrinsic fluctuations in the environment of business currently; firms require themselves facing the requirement to change their method of operation (Harrison and Pratt, 1992).
Understand the background to organizational strategic change
Organizations can opt for strategic change either due to internal factors that includes circumstances where the firm is growing beyond its leaps and needs to alter the ineffective structure or perhaps due to deprived overall performance. Other environmental factors includes the demography of the changing workplace and modifications in the available technologies of business. Strategic changes means changing the vision, mission, aims and objectives of the adopted strategy to achieve desired objectives. According to (Hofer and Schendel 1978): It is defined as changes in the content of a organizations strategy as explained by its scope, resource deployments, synergy and competitive advantages.
Models of Strategic Change
There are various models for strategic change that Nokia could adopt to implement an appropriate process for change in the business. Nokia is multinational corporations of Finland, the main principle elements of Nokia are mobile phones and other portable IT equipments. Nokia is one of the biggest corporations in the world of portable phones and also offers other services like internet services, games, application, mass and media and navigation services to its customers. This organization possess around 1, 25,000 employees across 120 different countries, and sells its products in more than 150 nations and attains an annual revenue of nearly $38 billion. In the year 2012 Nokia became the world’s second biggest mobile phone manufacturer with a global market share of 22% in the initial first quarter. Managing such a big organization is not an easy task and diverse concepts of strategic changes are being implemented in order to attain the organizational objectives and satisfy its work force (Types of Organizational Change, n.d).
Strategic changes is an ongoing process in any of the organization and in this context various models of changes have been developed that could help management to achieve its organizational objectives. The model for strategic change is;
It is one of the most widely spread and designed after models for change management, it is a simple but extremely powerful model to help in maintain a successful change in a management. ADKAR model is an individual change management model that outlines the five areas of building blocks of successful change it consists of A- Awareness for the need of change, D- Desire to contribute and sustain the change, K- Knowledge on how to implement change, A- Ability to enforce essential skills and behavior and R- Reinforcement to maintain the change (Warrilows, 2013).
J P Kotter model for change
This model depicts the 8 step change model with the help of which companies can avoid failure and become adaptable in the changing environment. Firms can enhance and raise the chances of success for its present and future in the ever changing world. The eight steps are divided as follows;
- Step 1 – Establishing a sense of urgency and aid others to view the changes to be convinced for significance of acting immediately.
- Step 2 – Building the guiding coalition and organize a group with sufficient amount of power and motivate the group to work jointly as a team (Nauheimer, 2012).
- Step 3 – Development of change vision to help in to direct other with change effort and design strategies to attain the same.
- Step 4 – Communication of vision and ensure that maximum of group could be understood about the vision and strategy.
- Step 5 – Empowerment of broad based action and removes the barriers in change system to undertake risk.
- Step 6 – Generate short term win and plan for attainment that can conveniently be made visible and recognize the involved employees in it.
- Step 7 – It focuses on never letting up and utilizes increased credibility to manage the changed system and reinvent the process with new projects and changing agents.
- Step 8 – Include changes into culture and combine the connections between new behavior and organizational success (Nauheimer, 2012).
From the analysis of both the above models it could be concluded that Nokia can implement ADKAR change model in its strategy as it will provide long term benefit for the firm. The model is clearly focused towards major areas that will help in Nokia to achieve its organizational goals.
Relevance of the models in Nokia
The ADKAR strategic management models reflects the movement of strategic management decisions made by the organization, ADKAR model mainly gives attention on setting up of aims and objectives and find out the various steps that are required to achieve those aims and objectives. In this case study the issue being here highlighted defines underwent changes in the organizational structure of Nokia over the period of time and modifications made by the company with respect of its people. In the year 2004, Nokia went with a massive change in its structure by changing its nine business units into four, in order to focus more deliberately on the aspirations of its customers (Cowan, n.d).
By enforcing ADKAR change model In Nokia management structure it can attain several benefits like it moves ahead beyond the state of change and as a context of present and future transition it will provide more of suitable information about the manner that one move from change process individually. In order to move out of the present condition an individual requires to awareness about the need for change and desire to take part and support the change in organization. Nokia adopted the changes in people strategic change model for building a stronger team, people change model aims towards implementing for a long term or small scale; in context of long term changes the management of this organization decided to implement a changes in the structure as nine diverse units were merged into four and in order to ensure speed and innovation in the firm all the customer based operations and market operations, product developments units and logistic support activities were reorganized into three distinct unit (Partington, 1996).
Benefits of Strategic Change Model in Nokia
Proper planning and implementation of strategic changes is very much important in any of the organization, Strategic changes basically focuses on managing the strategically changes; it is a long term plan to attain the precise goals and objectives of the company. Strategies are generally aimed towards the future and bring in about sustained changes in the organization that requires detailed planning and assessment of the prevailing strategies (Paton and McCalman, 2008).
By enforcing the ADKAR change management model in Nokia, it can attain several benefits in it like, as the model directs change activities and focuses on results and not on tasks. In present situation Nokia needs to achieve appropriate results in its current condition. Other than this model can help in communication of strategies that can be focused and would also into measure the changing progress down to the individual level in management of firm. Through this Nokia can also provide its managers a proper tool to resist in the change that generally occurs due to behavior issues or skills (Griffin, 2007).
Many of the other advantages could also be practiced by the organization; the innovation in the organizational structure of Nokia will help in it to encourage co-creation in the workforce it means that the firm promoted cooperation among each of the staff members that will direct to an augmented wealth of wisdom, creativity and experience among the employees. All these will direct towards an increased revenue and positive word of mouth for the organization.
Issues Related to Strategic Change in an organization
In order to be affluent in the market place the firm need to be able to react and adapt with the changing global market. An organization should implement strategic changes in order to survive and it can be at times difficult because at some point of time it requires major transformation in the organizational structure and process.
Need for Strategic Change in Nokia
Due to occurrence of recession Nokia has faced a decrease in its demand level and the product of the firm was facing a tough challenge in the entire global market. In this condition the management of Nokia needed to bring in a strategic change in its structure so that it can manage the competition. Many kinds of modifications were required in product as well as the organizational structure of the firm, as its other competitors were focusing towards innovative product development and implement strategic change in its management (Wiersema and Bantel, 1992).
The organization underwent with a major change in the year 2008, when it launched the Booster program. Changes were required in the strategic planning process of Nokia because of massive changes in the external environment that the firm needed to cope with the challenges, other than this modifications were also required because the organization was facing severe challenge at the time of communicating with its staff members, Nokia needed a much advanced and suitable strategic process to converse easily with the employees and meet the global challenges. In this context enforcement of new model for change will help in to enhance the productivity level of Nokia.
Factors driving the need for strategic change in Nokia
Strategic changes require proper planning and implementation in the management structure of an organization. There must be a climate in which changes could be made a new strategies can be enforced in the organization. Nokia was in a situation where it needed severe changes in the organization; in this context several factors were determined that determined the need for strategic changes in the corporation. One of the reasons was massive amount of changes in the economical structure of the nation; changes in the economy affected the business at large as ultimately firm has to make trading in the prevailing economy (Gioia and Chittipeddi, 2006).
Various other factors were also derived the need for strategic change in Nokia, in this respect one of the prominent reason was the increased level of competition in the global world. The market condition was frequently changing and many new technological gadgets were introduced in the market by other firms that decreased the level of market share for Nokia. The rise in the level of competition especially from its numerous competitors encouraged Nokia to bring in major changes in the management of Nokia (Leger and Oxner, n.d). The other challenging situation for the company was introduction of novel innovative products in the market by its competitors.
Resource Implications of Nokia not responding to Strategic Change
Nokia is one of the leading Information and Technology Corporation all around the world; it is a massive organization in terms of manufacturing, producing and generating revenues in the global market place. Nokia was at a critical juncture where strategic changes were required in order to retain the brand identity (Todnem, 2005).
The resource implications factor that will make the management to face in the challenging situations were firstly the cost of training involved in imparting new skills to employees. When change will occurs in organization the cost included in giving new skills will increase the firm’s cost. The other implications that the management will face is the cost of redundancy included in the management, by enforcing new change model the organization will require to manage the changed behavior of employees and retain them in the firm.
Stakeholders in Developing a Strategy for Change
In the management concept shareholders are regarded as the owner of the business, they are the regarded as one of the key drivers of the business. They play a crucial role in financing, governance, operations and in controlling various aspects of business.
System Involving stakeholders in the Planning of Change at Nokia
Shareholders have a crucial role in the planning process of strategic change in any if the organization; in Nokia Corporation the stakeholders were also involved largely in the strategic change process. The system that involved stakeholders was mainly in the area of financing; it includes major investment decisions that were required in Nokia in order to implement strategic changes in company. Other than this stakeholder were involved in the operations of business, as by establishing changes in the organizational communication process and hierarchy of the company the shareholders will also get influenced and they need to be informed about the various changes that the organization is planning to enforce (Barker and Duhaime, 1998).
The case study here in depicts that Nokia is a state where it requires strategic change in its management, in this condition the firm included several shareholders in different strategic decisions and they were involved in both direct and indirect role in the operations of firm. In this situation the management of Nokia needs to focus to major areas in decisions making and acquire the benefits by globalizing its process in the entire world.
Change management of Nokia with Stakeholders
Change management is an approach to transform from the desired state to the expected for an individual, group or organization. It is a corporate process that helps stakeholders to accept and embrace the changes that are required in the business environment. Nokia implemented several strategies that also included its stakeholders in the major decision making process, as the organization was facing tough global challenges the company needed to transform the basic operations and enforce new operations in the business (Leger and Oxner, n.d).
Nokia firstly implemented the transformational change in its management with the help of it submerged several different units by enforcing stakeholders in and novel method of communication and technology were introduced in the management. The other change management model enforced by Nokia was incremental change in its management through this the firm changed many of its systems in its operational departments and these ultimately provided an increased benefit to firm like enhance cooperation and co-creation activity in the management and employees (Wiersema and Bantel, 1992).
System Used by Nokia to involve Stakeholders in the Planning of Change
Nokia used various strategies to plan and implement changes in the organization, firstly it removed the traditional method of top-down changes in the organization and in the newer method it tried to make all the employees a part of the solution. This led to an increased satisfaction level of employees with the organization and started finding an ultimate place to work with, in the planning of change Nokia with the help of its stakeholders helped it enforce other strategic changes as well (Stakeholder Involvement in Cha