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:

12ORGANISATIONAL RESTRUCTURING
1. Global presence in more than a hundred
nations.
2. Listed and hence can raise capital from the
stock market.
3. Diversity management and employee
strength
1. Weakening revenue generation shown.
2. Weakening share capital position as shown.
Opportunities:
1. Introduction of new products.
2. Collaboration with companies
3. Entering new markets
Threats:
1. Changing laws
2. Environmental sustainability pressure
Part 2.
Organizational structure and culture and their impacts upon the behaviour of different
levels within the company:
Organisational structure is one of the main internal environmental factors which impact
the business operations of the companies including Ericsson. Organisational structure is
defined as un-written codes of conduct and influencing factors prevailing within an
organisation. As far as is Ericsson is concerned, it can be pointed out that the organisational
structure of the company comprises of the policies and beliefs laid by the apex management
based in Sweden. (Bromley and John). The term organisational structure can also be studied
through control systems and power structures. Organisational structure has great impact on the
operations of employees, the behaviour and the organisation concerned as a whole. For example,
a multidivisional organisational structure enables employees across different work division

13ORGANISATIONAL RESTRUCTURING
collaborate while working on projects. Multidivisional organisational structure promotes
innovations and proactive participation of employees. As, far as Ericsson Oman is corned, the
leadership of the company enables employees of different divisions collaborate in dealing with
projects which motivates employees. The company as a result in able to take up and execute
large scale projects with great efficiency. Thus, it is clear from the discussion that multidivisional
organisational culture has strong positive influences on the behaviour of employees.
Organisational culture refers to the values, experiences, philosophies and
perceptions which employees of an organisation uphold and express during their work. The
control systems of an organisation consists of the methods which are adopted in order
ensure superior operations like quality control, cost control and financial control (Albers,
Wohlgezogen, and Zajac). The power structure of an organisation consists of the main
executives who are empowered to take decision (Maduenyi et al). As far as the company is
concerned, one can infer out that it has an organisational culture which evident from the
leadership body of the company.
Organisational culture of business organisations can be divided into four categories as per
Handy Model of Organisational culture. The following are main organisational cultures:
Power culture:
The first power culture which would be considered is power culture. The main attribute
of power culture is that the top management exercises strict control over the decision making
activities under this culture. The decision making mechanism of power culture is highly
stratified. The executives having access to the maximum amount of resources like financial
resources or human resources usually reserve the decision making power. The leaders following
this type of organisational cultures usually follow authoritative leadership style.

14ORGANISATIONAL RESTRUCTURING
Role culture:
The role culture is bureaucratic by nature and is dominated by position of executives
within the organisation concerned. Employees having more expertise and knowledge usually
have high positions in the team compared to other employees. The decision making process
prevailing in such teams is extremely slow and dependent on bureaucracy.
Task culture:
The organisational cultures of companies following task culture put more emphasis on
the completion of the job or achievement of the target. The teams following task culture value
the contribution of individual employee. However, employees holding higher positions have
more say on the matter.
Person culture:
The person cultures are usually loose groups formed by professionals which enable them
to share certain advantages. The members working person persue their own goals. The members
enjoy similar rights and culture plays a very important aspect in serving the members.
Aspects of organizational culture
Artefacts- symbolizes organizational culture
in the work environment
Visible but cannot be
comprehended
Values-Things which members of
organizations value and consider important Great height of knowledge
Assumptions-Perceptions which employees
hold regarding certain aspects Invisible
The following are the impacts of organisational structure and culture on the behaviour of
people at different levels in the project departments of Ericsson Oman:

15ORGANISATIONAL RESTRUCTURING
Leadership:
The organisational structure plays a very important role in leadership. The leaders lead
their subordinates to achieve the business goals. They organisational structure prevailing in
particular organisations has immense impact on the leadership style. For example, organisations
holding role culture organisational culture follow bureaucratic style of decision making. This
type of organisational culture is more aligned to the authoritative style of leadership. The
organisations on the other hand following role culture would follow a dynamic decision making
process. The preferred style of leadership in organisations following task culture would be
participative. Hence, it is organisational culture and structure have deep impact on the behaviour
of people. As far as Ericsson Oman is concerned, it can be pointed out that the Omani ICT is
growing at a very fast rate. The ICT market of the country has achieved new boost owing to
innovations and inventions like 5G and cloud services (Islam). The graph below shows that the
GDP of Oman was US$ bn 79.29 compared to US$ bn 70.78 in 2017 and US$ bn 65.94 in 2016.
This means that the country is experiencing increase in productivity which means that the
industries in the country are also experiencing growth. This means that they are requiring more
advancements in ICT which means that project teams in Ericsson Oman are handling more
projects simultaneously. The necessity to manage several projects efficiently at the same time
even if they in different locations is putting immense stress on the project team of the company
(Binder). Thus, it is clear that the management of Ericsson Oman would be required to establish
the role culture organisational culture which would encourage employees to participate in the
management of the projects, thus making them feel belongingness to the company. This
application of participative leadership would motivate them to participate the strategy making
process.

16ORGANISATIONAL RESTRUCTURING
Figure 6. Graph showing GDP of Oman
("Tradingeconomics.Com)
Motivation:
Organisational culture would have direct impact on the motivation of employees.
Business organisations operate in a dynamic business environment which require them to
embrace changes. The management of the companies in order to embrace the changes from
strategies which may put pressure on the employees. For example, the management may assign
higher targets to employees. This means that the employees have to achieve them. This
requirement to achieve higher targets put stress on employees. The management of the business
organisation should motivate the employees to achieve higher targets. It can be pointed out that
in business organisation holding role culture, the management does not motivate the employees.
Again, in organisations following task culture, the decision making process in more dynamic. As
far as Ericsson Oman is concerned, the company should allocate positions to appropriate people
across different cultures. The table below highlights the cultural differences between Sweden, the

17ORGANISATIONAL RESTRUCTURING
domicile country of Ericsson and Saudi Arabia (culturally identical to Oman). The comparison
shows that there exists immense cultural differences between the two markets namely, Sweden
and Oman. Thus, the managers should provide cultural training to the employees of Oman so
that they are able to collaborate with the employees of Sweden, the headquarters of Ericsson.
This would motivate them and boost their performances.
Figure 7. Hofstede's tool comparing between Sweden and Saudi Arabia
(Source: Hofstede-Insights.Com)
Note: Saudi Arabia has been taken since the Hofstede’s tool does not incorporate Oman
Risk assessment and management:
Multinational companies like Ericsson come under continuous threats or risks like
changes in laws. The management of the company here needs to take into account Deal and
Kennedy’s cultural model. The management should consider the four quadrants of the model
namely, work- hard play-hard, tough-guy macho culture, process and bet-the-company culture.

18ORGANISATIONAL RESTRUCTURING
Ericsson belongs to the first quadrant namely, work- hard play-hard. For example, the Ericsson
faces stiff competition in the market which would result in lowering the profitability of the
company. The company could face decrease in revenue generation due to increase in
competition. The same is evident from the consolidated statement below. The company incurred
net loss for consecutive years namely, 2017 and 2017. This means that the management of the
company should take action by involving the employees. However, as pointed out in case the
prevalent organisational is role culture, the management would not gain participation in the risk
management process. However, in case of task oriented culture, the management would gain
participation of the employees in the risk management strategy making and implementation.
Thus, it can be pointed out that the organisational culture has strong impact on risk management
activities of a firm.
Risks encouraging change management at Ericsson
Ris
k
no
Documen
t control
informati
on
Risk
identifie
r
Risk
Category
Risk
Descripti
on
Impact of
the risks
Risk
respons
e
categor
y
Owner
of risk
Precautiona
ry
recommenda
tions
Owner of
Risk
response
action
1 Profit and
Loss
statement,
balance
sheets of
Ericsson
Falling
profits in
spite of
strong
marketin
g
strategies
Market
risks
1. Market
risks can
originate
due to
introducti
on of
new
products
by
existing
competit
ors
and/or
entry of
new
firms
with
similar
products.
2. Loss
of
materials,
technolo
gical
resources
1. Fall in
revenue and
losing of
consumers.
(short term
impact)
2. Losing
investors,
and supply
chains due
to falling
capacity to
give
positive
ROI.
(medium
term)
3. Goodwill
risk and
losing of
global
market
position
(long term
loss)
Strategic
decision
s,
marketin
g
strategie
s
Finance
departme
nt,
Marketin
g
departme
nt, Risk
manager,
Engineer
1. Formation
of a strong
risk
management
strategy.
2.Use of
moern risk
management
systems
3.Strengtheni
ng marketing
of products,
introducing
new and
innovative
products with
less
competitors
Marketing
departme
nt

19ORGANISATIONAL RESTRUCTURING
and
manpowe
r due to
fire and
explosion
s
4. Reduced
productivity
due to
increasing
accidents
and loss of
resources
2 Risk
register
Employe
es,
customer
s or any
other
stakehold
er
Vary
WHS
risks to
employee
s due to
collision
with
objects
etc.
Employe
es
working
on
instllatio
ns may
get
injured
Loss of
productivity
, actions
from Safe
Work
High to
very
high
Manage
ment
Safety
training of
employees
Managem
ent and
the
concerned
departme
ntal heads
3 Unjustifie
d loss of
capital,
Unjsutifie
d loss of
data,
Unexplain
able alter
of
informatio
n
Employe
es,
customer
s or any
other
stakehold
er
Cyber
theft risks
1.Cyber
attack
would
cause
loss of
ICT data
and
designs
which
would
attract
huge
security
risks
towrads
the
company.
2. Cyber
attacks
lead to
loss of
customer
and
financial
data of
extreme
business
significa
nce. Loss
of
customer
data and
financial
resources
online
lead to
R1
1. Loss of
sensetive
business
data.
2. Loss of
financial
resources.
3.
Unauthorise
d access to
the
business
strategy
information
of the
company.
4. R1
High Apex
manage
ment and
all the
departme
ntal
heads
1. Tightening
of security.
2. Allocating
new email ids
and
passwords to
each
employees.
3. Mandating
subordinates
to obtain
approval of
superiors to
accede to
specific
information.
4. Making it
compulsory
for all
employees to
exchange
official
information
exclusively
on the
formally laid
path of
information
sharing.
5. Employees
holding
assistant
managers and
beyond
should lock
their systems
using a four
layer
password
Apex
managem
ent and all
the
departme
ntal heads

20ORGANISATIONAL RESTRUCTURING
security.
4
Cannot be
document
ed
Employe
es,
customer
s or any
other
stakehold
er
Natural
disasters
Natural
disasters
lead to
loss of
resources
,
inventory
and
assets
Depends on
the
seriousness
and
intensity of
the
calamities
Immedia
te
Governm
ent,
security
personne
l etc
Evacuation
Governm
ent,
security
personnel
etc
5
Governme
nt and
legal
websites
Apex
managem
ent
Change in
legislation
s
pertaining
to retail
sector
Change
in laws
require
companei
s to
comply
with the
new
laws.
1. Damage
to existing
housing
stock
2.
Unproducti
ve
maintenanc
e costs
3.Requires
W adapt the
relevant
areas of
operations
as per the
laws
Immedia
te
Apex
manage
ment and
all the
departme
ntal
heads
Compliance,
OHS
strategies
Governm
ents
6 Financial
statements
Apex
managem
ent,
finance
departme
nt, CFO
Economic
risks
1.
Increase
in cost of
materials,
cost of
labour
etc.
2.
Scarcity
of funds
due ti
withdraw
al of
financial
support
either by
governm
ent or
companie
s funding
the
project.
Requires
construction
to adapt the
relevant
areas of
operations
as per the
laws
Immedia
te or
within
the date
of
enforce
ment
specified
specified
Apex
manage
ment and
all the
departme
ntal
heads
Formation of
strategies
Apex
managem
ent and
finance
departme
nt
7 Risk
register
Apex
managem
ent,
security
officer
and any
other
employee
Fire,
exlosions
Loss of
materials,
loss of
equipme
nt, injury
of
employee
s, loss of
productiv
ity,
casualty
W oses
productivity
,
employees,
resources
Immedia
te or
within
the date
of
enforce
ment
specified
specified
Apex
manage
ment and
all the
departme
ntal
heads
Risk
management
strategies
Apex
managem
ent and
finance
departme
nt

21ORGANISATIONAL RESTRUCTURING
in case of
large
scale
explosion
s
8 Financial
statements
Apex
managem
ent and
top
managers
including
CFO
Goodwill
risks
The
company
may
loose
trust of
stakehold
ers
Ericsson
loses
productivity
,
employees,
suppliers,
patents and
assets
Immedia
te
Apex
manage
ment and
all the
departme
ntal
heads
Risk
management
strategies
Apex
managem
ent and
finance
departme
nt
9 Financial
statements
Apex
managem
ent and
top
managers
including
CFO
Capital
risks
Weakeni
ng of
capital
base due
to lower
generatio
n of
capital
Ericsson
loses
productivity
,s
employees,
suppliers,
patents and
assets
Immedia
te
Apex
manage
ment and
all the
departme
ntal
heads
Strengthenin
g marketing
of products,
introducing
new and
innovative
products with
less
competitors
to boost
revenue
generation
and
strengthen
goodwill
Apex
managem
ent and
finance
departme
nt
10 Financial
statements
Apex
managem
ent and
top
managers
including
CFO,
R&D
head
Technolo
gical risks
1.
Modern
technolo
gy leaves
perevious
technolo
gy
versions
redundan
t.
Requires
Ericsson to
carry on
continuous
research on
product
technology,
operation,
ecommerce
technology
etc
Immedia
te
Apex
manage
ment and
all the
departme
ntal
heads
Requires
Ericsson to
carry on
continuous
research on
product
technology,
operation,
ecommerce
technology
etc
Technolo
gcial
officer
Part 2a.. Models of change management and their practical implementation in the
workplace:
Multinational companies undergo changes to achieve several business goals many of
which are interrelated. Carayannis, Stavros and Christian point out right in the introductory
section of their article titled, ‘Business model innovation as lever of organizational
sustainability’ that business organisations are susceptible to changes in the market environment

22ORGANISATIONAL RESTRUCTURING
which in turn attract risks. Avgerou, Hayes, and Lebre La Rove point out that economic
development in different nations and associated industrial development have boosted ICT
industry. This is because the ICT industry actually boost the operations in other industries (Sun,
Ni and Rocky). However, the ICT industry all round the world is facing challenges due to the
need to cater to the dynamic needs of the industries like the need to provide them (other
industries) with highly advanced technological infrastructure to support their global business at
low costs. Kreiss and McGregor present a more serious fact-ICT companies also compete among
themselves to cater more satisfactorily to their respective key stakeholders namely, government
bodies and political parties. Thus, it transpires from the discussion that there exists fierce
competition among the ICT companies to retain their positions in the market (Rauter, Jonker, and
Baumgartner). These external pressures create business risks like revenue risks before the
leading ICT companies which necessitate them to embrace changes (Roome and Louche). The
restructuring which took place at Ericsson perfectly exemplifies the factors which leads business
organisations to embrace the changes.

23ORGANISATIONAL RESTRUCTURING
Net sales Gross income Net income (loss)
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
%increase
Figure 8. Graph comparing increase of net sales, gross income and net income of Ericsson 2017
and 2019
(Source: Ericsson.Com)
The graph shows that Ericsson in comparison to 2017 earned a 3 percent increase in net
sales and 42 percent increase in gross sales. However, the company earned a negative increase in
net income or net profit which in turn shows that incapability of the company to curtail its
indirect expenses. This inability to control expenses spite of earning high profits can be
attributed to the inefficient decision making system of the company. Thus, it is clear that
Ericsson would require to undergo organisational restructuring to the highly dynamic market
conditions. The company would have to deal with issues like declining sales or a very little
increase in sales (like 3% as shown) and falling net profit. The restructuring which Ericsson is
underwent in 2017 and would be undergoing in the future would require implementation of the
change management strategies using change management models (Navimipour and Zeynab). The
research would consider implementation of Kotter’s eight step change management model

24ORGANISATIONAL RESTRUCTURING
among the three models in consideration namely, Rasabeth Moss Kanter, Seven Stages of
Change by Elisabeth Kubler and Ross and the Eight step change management model by
Kotter.
Implementation of Kotter’s Change management model:
The change management model proposed by Kotter consist of eight steps. The first step
is creation of urgency followed by setting up of the changing management team which is the
second step. The third step is setting up of a vision which would drive the change which would
be followed by the fourth step of communicating the vision to the employees (Domingues et al).
The fifth step would be empowering the employees by training and mentoring. The sixth step
would be creating of short term goals which would be achieved in the initial phase. The seventh
step would be achieving continuous goals. The final step would be transforming the changed
norms into daily norms of the company. The implementation plan has shown as below:

25ORGANISATIONAL RESTRUCTURING
Change management plan
at Ericsson using Kotters's
change model and
implementation
Step 1
Apex managers of
Ericsson holds
meeting w ith middle
level managers on the
change to be
implemented
informing them about
the urgency to be
craeted among the
lower level employees
Finance department
places the budget for
approval of the apex
management to create
Apex management
approves change
management
implementation
budget
Step 2
Management sets up
change management
teams
Apex management
holds meeting w ith
the shareholders
Apex management
holds meeting w ith
bank officials to
apply for loan to
support
technological
advancements
Bank approves loan
amount
Step 3
Management of
Ericsson sets up
vision
Step 4
Departmental heads
hold meetings w ith
their individual
reporting employees
to communicate the
vision
Step 5
Training of managers,
assisstant managers
Training of
sub-ordinate
employees
Step 6
Creation of short
term goals
Step 7
Achieving
continuous goals
Step 8
Changed norms
become parts of
Ericsson's
operations
Monitoring of the
implementation
outcomes

26ORGANISATIONAL RESTRUCTURING
Part 3.
The impact of change upon staff at different levels within the organisation – including
resistance to change, barriers to change, managing conflict and managing self:
Changes have several impacts within the staff at levels or the organisations concerned.
Heckmann, Thomas and Michael opine that organisational changes have several impacts on the
staffs at different levels since they need to change their prevailing modes of operations. For
example, the organisation under consideration namely, Ericsson Oman is undergoing
administration restructuring with Rafiah Ibrahim, the present senior VP and market assuming the
position of the advisor to the CEO from August 31, 2019. The company would be appointing a
new senior level personnel in her place (Klettner, Thomas and Martijn). This change of position
holder would have the following impacts on the project department teams of Ericsson Oman:
Leadership style and engagement of employees:
Appointing of a new regional head results in change in leadership in an organisation
which require the employees adapt to the leadership style to the newly appointed leader(s). As
far as Ericsson Oman is concerned, it can be pointed out that the change of the personnel holding
the position of senior VP and market head would have strong impacts on the project
departmental employees. The new senior VP may have his own way of making decisions and
leading projects. The leader may follow participative leadership style and encourage the project
team employees to participate in the decision making. The new leader at Ericsson Oman may use
authoritative leadership style and only give orders without providing any guidance to the
employees (Saunders and Wuthnow). Thus, it can be pointed out in this respect that this change

27ORGANISATIONAL RESTRUCTURING
in leadership style would have great influence on how employees would perceive and conduct
project executions. This leadership change may create insecurity and fear in the minds of the
employees would in turn be source to conflicts between the new senior VP and employees of
projects team of Ericsson Oman.
Change in operational methods and appraisal systems:
Changes in leadership style would have strong influence on the operational methods and
appraisal systems. As far Ericsson is concerned, it can be reiterated over here that the project
teams of the company based in Oman are under extreme pressure to deliver efficiently to the
increasing number of projects. This pressure to cater to the increasing number of projects often
put stress on their physical and mental wellbeing which in turn impact their wellbeing. Thus, it
can be pointed out that these project department employees need to be motivated after the role
culture organisational culture which would encourage them to achieve higher productivity
(Mahjoub et al.). Thus, it is evident that organisational culture and structure have direct impacts
on the organisational behaviour. The new senior VP may direct the employees in a completely
new style which would require their operational methods completely. It can also be pointed out
that the new senior VP at Ericsson Oman would appraise the employees in ways. Thus, it can be
pointed out that organisational restructuring would have strong impact on the operations and
appraisal systems of project department employees at Ericsson which may give rise to conflicts
(Khan).
Resistance to changes:
There are several factors which are capable of giving rise to resistance among employees
in embracing the changes. The first factor which may give rise to resistance to the changes
among employees is differences in personnel opinion between the new manager(s) and the

28ORGANISATIONAL RESTRUCTURING
employees. For example, the newly appointed senior VP at Ericsson Oman may not understand
the organisational culture and sentiments of employees. This differences in thought processes
would cause the employees resist the decisions of the new regional head. The second factor
which may lead to conflict is lack of communication which may stem due to the first factor
namely, differences in opinions between the newly appointed regional head and the subordinate
employees (Liebel, Grischa, et al). The third factor which may lead to employees resisting
changes would be opposing goals. The territorial disputes would be the fourth factor which
would resist the changes. For example, the middle level managers at Ericsson Oman may
perceive certain decisions of the new regional head would intrude into their decision making
territories and as a result oppose changes (Deephouse et al.). The fifth factor which may give rise
to employees resisting changes would be irrational antagonism which certain employees might
harbour against managers.
Barriers to change:
Changes lead to insecurities among the employees which lead the employees create
barriers to resist the changes. The first factor which may lead to employee creating barriers to
changes is lack of trust in the senior management. The employees may also resits changes if they
perceive the change unnecessary or impossible. Unnecessary high costs of changes may also
inhibit organisations from embracing changes (Elliott, Naomi, et al).
Management of conflicts:
The business organisations facing different barriers to changes like technology, financial
resources and talents should take steps to manage them. The apex management should take steps
to control employee conflict at organisational levels and individual levels. The organisations like
Ericsson should empower employees by providing them with training to enable them to accept

29ORGANISATIONAL RESTRUCTURING
changes (Dartey-Baah). The management can also take steps at the individual levels by
delegating certain employees the responsibility of leading the changes. The strategies which the
management of the companies can take at the organisational level to minimise resistance to
changes consist of strategies like focussed change leadership and encouraging employees to
adapt to the changes early by incentivising change embracement (Haake, Oscar and Ola
Lindberg). The managers should manage themselves and abstain from engaging in conflicts to
the feasible extent.
Part 4. Academic reflections and recommendations:
I can reflect from my learning that the need to adapt to the dynamically changing market
condition have necessitated the business organisations to undergo organisational restructuring.
The company under study namely, Ericsson Oman is undergoing restructuring in order to adapt
to the business necessitaties. I can also point out upon reflection that business restructuring
benefits the organisations by aligning their operations with the market conditions and boost their
revenue generation. However, organisational restructuring and changes may create some issues
namely, conflicts owing to insecurity. As already pointed out above that the production
department employees of Ericsson Oman are bracing for a change in the management at regional
level. The present senior VP, Rafiah Ibrahim would be succeeded by a personnel who would be
appointed. The entire restructuring would come into force from August 31, 2019. There are
opportunities that employees, especially at the lower level may feel anxious while the middle
level employees may feel insecure about their positions at Ericsson Oman. Employees of both
the levels ultimately may resist the change. This demonstrates that the impact of change in the
organisational may differ among staff at different levels. The The following are the

30ORGANISATIONAL RESTRUCTURING
recommendations which can be placed before the management of Ericsson in order to manage
the change:
Training of employees:
I can recommend that the management of companies like Ericsson Oman should train
their employees. This would enable the latter participate more proactively in the change
management. The company should make the employees understand the necessity of embracing
the structural change in context instead of forcing them to accept the change. This approach to a
great extent would enable the global ICT company mininise change resistance among the
employees.
Gaining participation or engagement of employees:
I can recommend that the management should gain participation of the employees. This
would enable them to reduce conflict to a great extent. The new regional head should engage the
employees right after their assuming office. This would create positive perception among the
employees about the new regional head. They employees would feel important and support the
new manager in bringing about the changes in operations which the new manager may aim to
introduce. The employees on participating in the decision making process would have better
ideas about the strategies which would enable them to perform better. Thus, I can reflect from
my learning that gaining participation of the employees would enable the new manager to reduce
conflict to a great extent.

31ORGANISATIONAL RESTRUCTURING
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