Consider how you could use multiple-cause diagrams to ‘picture’ the multiple and interacting causes that bring pressure for change where you work, or in an organization that you know well.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
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Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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2 Consider how you could use multiple-cause diagrams to ‘picture’ the multiple and interacting causes that bring pressure for change where you work, or in an organization that you know well.

Lack of
recognition of
challenges to
market share
Decline in native
Finland market
share (from 93%
to 80%)
US market
share down
Decline in European
market share
US retailers favour
Motorola and LG of
South Korea
Finnish retailers favour
competitors Samsung
and Sony Ericsson
Possible decline in Finland's
status as a technological leader
(tremor felt throughout Finland)
Launch of 'look
and feel over
handset makers
Low desire for co-branding
le.g. Vodafone and T-mobile)
seen as 'the future
Stuck' as an
exclusive
supplier
Dated 10 years ago)
look of Nokia
Negative effects on the
Finnish national economy
Competitors'
phones have
higher quality
and technical
specifications
Loss of
jobs in
Finland
Situations of change such as that outlined at Nokia, above, draw attention to
the complexity of the change environment. However, we can do more than simply
identify the various triggers for change. Analyzing the relationships between them
- their systemic nature - is even more important. The multiple-cause diagram in
the case example is an attempt to do this.
Multiple-cause diagrams have the power to capture the complex dynamics of
change situations. They help bring about a deeper understanding of how changes
in one variable can have far-reaching effects in other parts of the situation. They
act, therefore, not only as a descriptive model, but also as an analytical tool for
understanding and managing change.
Transcribed Image Text:Lack of recognition of challenges to market share Decline in native Finland market share (from 93% to 80%) US market share down Decline in European market share US retailers favour Motorola and LG of South Korea Finnish retailers favour competitors Samsung and Sony Ericsson Possible decline in Finland's status as a technological leader (tremor felt throughout Finland) Launch of 'look and feel over handset makers Low desire for co-branding le.g. Vodafone and T-mobile) seen as 'the future Stuck' as an exclusive supplier Dated 10 years ago) look of Nokia Negative effects on the Finnish national economy Competitors' phones have higher quality and technical specifications Loss of jobs in Finland Situations of change such as that outlined at Nokia, above, draw attention to the complexity of the change environment. However, we can do more than simply identify the various triggers for change. Analyzing the relationships between them - their systemic nature - is even more important. The multiple-cause diagram in the case example is an attempt to do this. Multiple-cause diagrams have the power to capture the complex dynamics of change situations. They help bring about a deeper understanding of how changes in one variable can have far-reaching effects in other parts of the situation. They act, therefore, not only as a descriptive model, but also as an analytical tool for understanding and managing change.
Case Study: Strategic Change at Nokia
Based in Finland, Nokia transformed from being a diverse conglomerate into
a world-leading mobile phone producer in the 1990s. Since then, the company has
experienced very tough operating conditions in the face of competition from
Samsung and products like the Apple iPhone. Substantial layoffs and plant closures
took place across the world as Nokia missed out on consumers who were turning
to smartphones. By concentrating on mobile phones, Nokia also faced intense
competition from large volume producers in China with lower cost structures.
A new CEO was appointed from Microsoft in 2010 and he quickly sent a
memo to all employees. The memo, rich in metaphor, became known as the
'burning platform' memo and basically said that Nokia had missed out on some big
consumer trends and was now years behind the market and, while that was
happening, top managers in Nokia thought they were doing the right thing and
making good decisions.
The new CEO accused Nokia of lacking accountability and leadership, of not
collaborating enough internally and not innovating fast enough. He likened the
situation that the company faced with being on a burning oil platform, the
implication being that Nokia could stay where it is and perish in the flames, or jump
into icy waters and have a chance of survival. Despite the new CEO's 'call to arms',
market share, revenues, profits and share price continued to fall. In 2013, Microsoft
purchased Nokia's mobile phone business and the CEO moved to Microsoft as part
of the deal. If Nokia continues to lose share in the market then the Finnish economy
will suffer further. The company had helped put Finland on the map as a
technological leader and employer of a lot of people.
Transcribed Image Text:Case Study: Strategic Change at Nokia Based in Finland, Nokia transformed from being a diverse conglomerate into a world-leading mobile phone producer in the 1990s. Since then, the company has experienced very tough operating conditions in the face of competition from Samsung and products like the Apple iPhone. Substantial layoffs and plant closures took place across the world as Nokia missed out on consumers who were turning to smartphones. By concentrating on mobile phones, Nokia also faced intense competition from large volume producers in China with lower cost structures. A new CEO was appointed from Microsoft in 2010 and he quickly sent a memo to all employees. The memo, rich in metaphor, became known as the 'burning platform' memo and basically said that Nokia had missed out on some big consumer trends and was now years behind the market and, while that was happening, top managers in Nokia thought they were doing the right thing and making good decisions. The new CEO accused Nokia of lacking accountability and leadership, of not collaborating enough internally and not innovating fast enough. He likened the situation that the company faced with being on a burning oil platform, the implication being that Nokia could stay where it is and perish in the flames, or jump into icy waters and have a chance of survival. Despite the new CEO's 'call to arms', market share, revenues, profits and share price continued to fall. In 2013, Microsoft purchased Nokia's mobile phone business and the CEO moved to Microsoft as part of the deal. If Nokia continues to lose share in the market then the Finnish economy will suffer further. The company had helped put Finland on the map as a technological leader and employer of a lot of people.
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