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Enviromental Factors Affecting Nortel Networks

Extracts from this document...

Introduction

Enviromental Factors Affecting Nortel Networks Executive Summary This report will examine some of the main environmental factors affecting Nortel Networks and outline how management has taken these factors and influences in its corporate operations and decisions. The areas that will be discussed include the different types of environment, stakeholders and the effect environment has on strategic change. It will also look at a number of theories in these areas and prove them with Nortel Networks environment. The report will also relate each area in terms of the others and how they are interconnected. Contents Introduction ................................................................................................ 4 Analysis ..................................................................................................... 5 Conclusions ................................................................................... 18 Recommendations .................................................................................... 20 Appendices ................................................................................................ 21 Bibliography ............................................................................................. 30 Introduction Using definitions from Baron, Bartol and Bennett, the analysis will show how environmental factors are the fundamentals behind strategic change. The analysis will show the effect of stakeholders at Nortel Networks and the influences they have had over decisions using models from Freeman, Borgattis, Keuing and Mintzberg. The report will also recognise the impact of strategic change on culture using strategy from Parnell, Lester and Menefee. It will also outline the effect of change adaptability on the managerial task by showing characteristics depicted by Porter and Carnall. Analysis Definitions According to Baron (1996), the role of management is to define market and non-market strategies. It's clear that these two are related and can be seen at Nortel Networks. The corporation's activities in its market environment have in the past generated nonmarket issues and have stimulated action that has reshaped the nonmarket environment. For example, Nortel's concentrated R & D efforts in the sixties led to the discovery of fibre optics as a means of high-speed communications. This in turn has led the nonmarket environment moving from traditional voice technology of copper to optical fibre as a quicker, cheaper and more reliable way of transporting information. Nonmarket issues can also shape the market environment. ...read more.

Middle

on coping with personal life change. Even when leaders understand the foundation of resistance and try to reduce that resistance, they can be lulled into a false sense of security by the emotional cycle of change (Kelly & Connor, 1979). Conclusion The significant question facing management today is not how to prevent change - that would be self-destructive and may be impossible - but how to understand change, and how to bring constructive influence to bear on the process of change. This involves closely looking at the environment. The environmental changes at Nortel have seen the corporation go through Pedler, Burgoyne and Boydell's (cited in Blair, 1995) life stages of a company. It has been through the wilderness, where they were too introverted, losing touch and losing it's way. It has survived stage six, the dying company, where the organisation was failing or in some opinions had completed its purpose. It is currently in the transforming stage, where it is looking for a new purpose, identity and life. Another theory, which can be applied, but wasn't written with this area in mind, is organizational socialization. Huczynski (1999) quotes a number of writers including Pascale, van Maanen and Schein use this concept for individuals and groups, but it can be applied in organisational change too. Nortel Networks has been through the first three levels as discussed in this report, Pre-arrival, Encounter and Metamorphosis. Success will be measured by whether the realignments have a positive effect on productivity, commitment, and turnover. Nortel have taken the correct action in their current environment, according to Hitt, Ireland and Hoskisson (2000), who indicate downscoping leads to more positive outcomes in the short term and the long term. Although there has been a level of downsizing, it has been a result of downscoping, concentrating on core competencies. Recommendations The new vision isn't that much different to the past. The legacy is an entrenched culture of change, speed and innovation. ...read more.

Conclusion

As they have the option to buy at $20. A level of uncertainty with customers, so we engage IBM with all customers, practically handing them out sales funnel. Decision to use IBM as a channel and letting them lead in bids and bring Nortel in where they see fit. The writing is on the wall August 2001 Strategy review, the team decides that when rather than if there is another cut, out line of business would be closed down. Analysts confused by Nortel's products sets and why they are entering such a diverse set of markets in a time of flux. Operation Self-Preservation comes into force as leaders in team make sure they can find a suitable role if they are on an 'at-risk' list, within or external to Nortel Networks. Team closes another deal in the midst of looking for alternative jobs. End of the month the team (160 people) receive their at risk letters informing them that in six weeks they may have to be made redundant. September 2001 Letters are sent out as expected. The month is spent writing letter of recommendation and networking internally and externally looking for jobs for the team. Personally receive three job offers internally, one to run IBM alliance, one to run channel organisation and one role as a director in wireless... I decline and take my redundancy. Externally IBM come in and offers me several roles understanding my value to them in terms of customers... October 2001 Swisscom deal is won and handed over to IBM to drive. October 26th Team are officially redundant. Packages are excellent in terms of compensation. Most of team take 6 months tax-free salary. November 2001 Take account of people from organisation 50% take internal transfers and stay at Nortel - no redundancy 20% take roles with customers (average increase in salary 10%) 15% take roles in IT, an industry, which has been as hard, hit as Telecoms 5% take roles with competitors and... the rest are taking some time off to catch a breath or in starting in Australia and back packing around the world. ...read more.

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