Ericsson: Organizational Restructuring, Change, and Employee Impact

This report provides a comprehensive analysis of Ericsson's organizational restructuring, focusing on the changes implemented in the company's Middle East and Africa market, specifically in Oman. The report examines the external environment, company profile, financial performance, and strategic considerations. It delves into the organizational structure and culture, and their impact on employee behavior, including power, role, task, and person cultures. The study explores leadership styles, motivation, and risk management within the context of organizational change. Furthermore, it analyzes change management models, such as Kotter's model, and their practical implementation. The report addresses the impact of change on staff, including resistance, barriers, and conflict management. It concludes with academic reflections and recommendations for employee training and participation, offering insights into managing organizational transitions effectively within a multinational telecommunications company.

Running head: ORGANISATIONAL RESTRUCTURING
Organisational Restructuring
Name of the Student:
Name of the University:
Author Note:

1ORGANISATIONAL RESTRUCTURING
Table of Contents
Part 1................................................................................................................................................3
Introduction:....................................................................................................................................3
Critical analysis of the external environment in which in the company operates:..........................5
Company introduction:................................................................................................................5
Company profile:.........................................................................................................................5
Market, Location and leadership:............................................................................................5
Financial performance:............................................................................................................8
Industrial profile:.......................................................................................................................10
Strategic:....................................................................................................................................11
Part 2..............................................................................................................................................12
Organizational structure and culture and their impacts upon the behaviour of different levels
within the company:......................................................................................................................12
Power culture:............................................................................................................................12
Role culture:...............................................................................................................................13
Task culture:..............................................................................................................................13
Person culture:...........................................................................................................................13
Leadership:................................................................................................................................14
Motivation:................................................................................................................................15
Risk assessment and management:............................................................................................16

2ORGANISATIONAL RESTRUCTURING
Part 2a.. Models of change management and their practical implementation in the workplace:. .20
Implementation of Kotter’s Change management model:.............................................................22
Part 3..............................................................................................................................................24
The impact of change upon staff at different levels within the organisation – including resistance
to change, barriers to change, managing conflict and managing self:...........................................24
Leadership style and engagement of employees:......................................................................24
Change in operational methods and appraisal systems:............................................................25
Resistance to changes:...............................................................................................................25
Barriers to change:.....................................................................................................................26
Management of conflicts:..........................................................................................................26
Part 4. Academic reflections and recommendations:....................................................................27
Training of employees:..............................................................................................................27
Gaining participation of employees:..........................................................................................28
References:....................................................................................................................................29

3ORGANISATIONAL RESTRUCTURING
Part 1.
Introduction:
The employees working in organisations come under influences of several factors which
are capable of impacting the operations of the organisations concerned. The business
organisations today are subject to the dynamic macroeconomic factors which includes political
factors, economic factors, legal factors, social factors, technological factors and environmental
factors. These factors are capable of attracting one another and require the organisations to
undergo changes in order to adapt to them. The changes which business organisations either seek
to embrace or embrace under the influence of the environmental factors have direct impacts on
their employees. The employees are the internal stakeholders who are capable of having direct
impact on the operations of the company since they are the ones who actually implement the
strategies made by the apex management. One such change which business organisational are
embracing in order to align their operations to the external environment is to restructure their
management pattern right at the top level to make decision making more dynamic. Restructuring
of the organisations at the apex management level have deep impacts on the operations of the
organisations concerned. The organisational restructuring calls for reshuffling of job
responsibilities and reallocations among the middle and top level managers. Thus, the impacts of
organisational restructuring trickles down from the management level to the bottom level
employees. The aim of the paper would be reviewing the changes which took place in an
organisation post organisational change. The fact holds true to a greater extent for the
multinational companies which have presence in several nations. These organisations have
regional management bodies and operational frameworks set up catering to the needs of the
different host markets. Thus, organisational changes have direct impact on the operations of

4ORGANISATIONAL RESTRUCTURING
these operational units and consequently the entire global operational structure. The company
which would provide support to the research would be Ericsson, the multinational networking
and telecommunication based on Stockholm, Sweden. The reason behind choosing Ericsson
Oman lies in the fact that the global management of the company has announced a significant
restructure in the Oman administration. The global management of the company housed in
Stockholm in a press release dated March 12, 2019 announced that it is implementing
organisational restructuring in the management board dedicated to the Middle and African
market which includes Oman. The organisational restructuring involved Rafiah Ibrahim, the
present senior vice president and head of market area, Middle East and Africa assuming office as
an advisor to the CEO. The organisational restructuring would be effective from August 31,
2019. The press release also mentions that the company will recruit an eligible candidate who
would function as the senior vice president and head of market area, Middle East and Africa. The
assignment would delve into the impact of the restructuring on the organisation and its
employees employed in the production department in Oman (Ericsson.com). It can be pointed
out that appointment of the new personnel at the regional level management would have serious
impact on the employees of crucial departments like the project departments. For example, the
newly appointed senior VP and market head and the project department employees would be
required to establish strategic fit among themselves. There may be conflicts of interests and/or
opinion between the two parties during the course of adapting to this significant change. The
assignment would delve into the change management and the conflict management issues the
project department in Omani arm of Ericsson would encounter as the outcome of the
restructuring.

5ORGANISATIONAL RESTRUCTURING
Critical analysis of the external environment in which in the company operates:
Company introduction:
Ericsson is a listed company operating in the information and communication technology
sector with its headquarters in Stockholm, Sweden. The company operates in more than ten
countries in the world. The vision of the company in the opinion of Borje Ekholm, President and
CEO, the purpose of Ericsson is to empower and connect the different parts of the world, in other
words, its markets. The vision of the company clearly mentions that it aims to make
technologically advanced tools to every industry in order to drive positive changes in them. The
company declares itself as a socially responsible citizen. An analysis of the company clearly
brings into light that the company recognises its role in building technological infrastructure for
other industries as well. Moreover, the company speaks about its continuous moto in carrying
continuous research and development to make more advanced ICT tools to its customers.
Finally, the vision clearly mentions that the company seeks to contribute towards social
development and environmental sustainability which indicates the strong corporate governance
of the company.
Company profile:
The following sections would delve into the profile of Ericsson, Oman:
Market, Location and leadership:
Ericsson is a multinational ICT company based in Stockholm, Sweden. The company
operates in the information and communication technology market. It provides products like
cloud infrastructure which are goods and 5G which are services. Thus company provides
supports to the other industries manufacturing. As Omani office of Ericsson is located in Muscat,
the capital of the country.

6ORGANISATIONAL RESTRUCTURING
Figure 1. Map showing the global locations of Ericsson
(Source: Ericsson.com)
The company along with its global subsidiaries operate under the leadership of a strong
executive team. Borje Ekholm, President and CEO, sits at the top of the organisational hierarchy.
Fredrik Jejdling, executive vice president and head of the business area networks (since 2017)
and head of the segment network. He is a Swedish by origin. MajBritt Arfert holds the position
of Senior Vice President, Chief People Officer and Head of Group Function People. She is a
Swedish citizen. Arun Bansal functions in the capacity Senior Vice President and Head of
Market Area Europe & Latin America and is an Indian citizen. Xavier Dedullen, a citizen of
Belgium holds the position of the
Senior Vice President, Chief Legal Officer, Head of Group Function Legal Affairs &

7ORGANISATIONAL RESTRUCTURING
Compliance and secretary of the Board of Directors of Telefonaktiebolaget LM Ericsson. Erik
Ekudden, a citizen of Sweden holds the position of Senior Vice President, Chief
Technology Officer (since April 1, 2018) and Head of Group Function Technology. Niklas
Heuveldop, Senior Vice President and Head of Market Area North America is a citizen of
Sweden. Chris Houghton who functions in the capacity of Senior Vice President and Head of
Market Area North East Asia is a British by origin. Rafiah Ibrahim
Senior Vice President and Head of Market Area Middle East & Africa is of Malaysian origin.
She would be assuming the position of an advisor to the CEO from August 31, 2019. The
company would be appointing an eligible personnel in the senior VP and market head. Jan
Karlsson holds the position of Senior Vice President, Head of Business Area Digital Services
(since August 1, 2018) and Head of Segment Digital Services. Peter Laurin
is the Senior Vice President and Head of Business Area Managed Services (since 2017) and
Head of Segment Managed Services. Carl Mellander, of Swedish origin holds the position of
Senior Vice President, Chief Financial Officer and Head of Group Function Finance and
Common Functions. Stella Medlicott, once again a British holds the position of
Senior Vice President, Chief Marketing and Communications Officer and Head of Group
Function Marketing and Corporate Relations. Nunzio Mirtillo
leads Ericsson executive team in the position of Senior Vice President and Head of Market Area
South East Asia, Oceania and India. Åsa Tamsons
holds the chair of the Senior Vice President and Head of Business Area Technologies & New
Businesses (since October 1, 2018) and Head of Segment Emerging Business and Other and is of
Swedish origin.

8ORGANISATIONAL RESTRUCTURING
Financial performance:
The consolidated income statement of Ericsson shown below company suffered a loss of
SEK million 6276 in 2018 which was less than SEK million 32433. The net sales of the company
in 2018 was SEK 210,838 million which was higher compared to 2017. However, the rising
expenses like R&D expenses eroded the gross revenue which ultimately led to a negative net
profit in 2018.
Figure 2. Consolidated income statement of Ericsson for the years 2018, 2017 and 2016
(Source: Ericsson.Com)

9ORGANISATIONAL RESTRUCTURING
Figure 3. Graph showing net sales of Ericsson
(Source: Ericsson.Com)
The historical stock chart of Ericsson for 5 years show that company has managed to
recovered from a massive fall in its share prices towards 2017. The share indices of the company
remains very volatile which a more downward trend. Thus, one can from the performance of the
company both in the product market and share market that its financial performance was not
strong in 2018.

10ORGANISATIONAL RESTRUCTURING
Figure 4. Historcial stock index graph of Ericsson NASDAQ
(Source: Nasdaq.Com)
Industrial profile:
Ericsson operates in the information and communication industry which supports the
development and growth of all the other industries. The graph below shows that the revenue
generation of the global ICT industry has reached EUR bn 4460. This growth in the ICT industry
global is driven by huge expansion in the ICT markets of the emerging nations like India whose
ICT market is expected to reach $ 225 bn by 2020 (Business-Standard.Com). The development
in the information and communication technology market is driven by several factors like the
necessity among other industries like construction industry to embrace higher levels of
technological advancements.

11ORGANISATIONAL RESTRUCTURING
Figure 5. Graph showing global ICT revenue 2005-2019(EURbns)
(Source: Statista.Com)
Strategic:
The leadership team of Ericsson forms strong strategies which drives the operations of
the company. The strategies which the management of the company takes into account both the
host market situations as well as the home country environment situations. Porter and
Heppelmann mention that business organisations should form strategies to make their decision
making mechanism more dynamic. The management of Ericsson embraced the strategies of
organisational restructuring in order to make the decision making system of the company more
dynamic (Ericsson.com).
SWOT of Ericcson
Strengths: Weakness: