BUSINESS INFORMATION SYSTEMS (PART 1)

(BISI), Assignment (1)

January 2009 Assignment Reference Prepared by: University ID: 1. Introduction The objectives of this document are to describe a recent structural change within Motorola and develop a critical appraisal of the contribution of the management of the change process to organizational improvement. Motorola portfolio of products and services includes communications infrastructure, enterprise mobility solutions, digital set-tops, cable modems, mobile devices and handsets. Motorola develop communications solutions and services to people (consumers), businesses (wireless Telecom. operators and governments. Given Motorolas turbulent and uncertain organisational and environmental conditions, The Kurt Lewins (1951)1 model is becoming less appropriate as organisations, such as Motorola, increasingly recognise change as a continuous process. It is no longer appropriate to consider organisational change as a project or event, with a clearly defined beginning or end. I will utilize the more sophisticated models in describing the change and assessing the change management process. 2. Description and Analysis of The Motorola Model of change On June 17, 2007 Motorola said it has separated its enterprise business, which serves corporate, and government customers, from it Networks business and made it a separate division2. Motorola also combined its television set-top box business with its network equipment business into a division that sells to service providers. The mobile devices unit, Motorola's biggest business, remains largely unchanged, though the mobile applications business has been moved to the enterprise unit. Based on the two attributes of scale of change and leadership style of Dexter Dunphy and Doug Stace (2001) model, we identify that in implementing change, Motorola adopted a Dictatorial transformation model: 1. The change involves restructuring of divisions: so it should be classified under modular transformations, we cannot also ignore the fact that the change might also contain some elements of incremental adjustment as it is not radical enough to be described as strategic. 2. Coercive, on the face of it. However we cannot also deny that there might be in the background, are some elements of consultative leadership style. It is considered necessary to better understand the cultural influences on Motorola in an Anglo-American context based on Hosftede and Bond(1998) conceptual framework based on the five dimensions of. Power distance, Uncertainty avoidance, Individualism-Collectiveness, Masculinity and femininity, and long term short term orientation. Same characteristics will also be observed from the model extension and enhancement found in the GLOBE framework as we go deeper into the subject or this report. BISI/Jan2009/1 Waleed Sami 7312180

1 2

Kurt Lewin and the Planned Approach to Change: A Reappraisal. Journal of Management Studies, Oxford, Vol. 41, Issue 6 Motorola Merges Cable, Wireless Network Units article By Todd Spangler -- Multichannel News, 7/18/2007

a) Scale of Change: To be able to define the level and effect of change, lets look at its impact from two areas Revenue distribution and Employees affected. Before Change After Change Revenue contribution Revenue contribution N&E (Network and Enterprise): 39% Networks & Connected Homes: 24% at at 19.2B 12.2B Connected Homes: 6%, at 3.3 billion Enterprise & Public Safety: 21%, at Mobiles Devices: 55% at 28 billion. 10.3B Mobiles Devices: 55% at 28B Resources affected: Resources affected: Networks & Connected Homes(19,000): N&E (32,000): Enterprise & Public Safety: (19,000) Connected Homes: (7,000) Mobiles Devices: (27,000), Mobiles Devices: (30,000) We can see that the penetration of the change will be medium within the organization as it mainly built around restructure of divisions by reallocating resources and moving the shared revenue from one business to the other. It is hard to classify the change as strategic as it scores low in the areas of: Degree of Resistance, target Population, and The implementation Time Frame. Its is a plain structural Change.

b) The Motorola Way of implementing the Change Charles Darwin once quoted its not the strongest species that survive, not the most intelligent, but most responsive to change. Organizations such as Motorola, GE and HP have demonstrated the ability to effectively adapt to change and have been quite successful, Over the decades, Motorola's steady evolution has allowed it to meet the challenges of revolutionary changes in business. Change has become part of Motorola's legacy. Founder, 3 Paul Galvin, believed that in order to survive, the company had to renew itself continually . Motorola has chosen to view "change" as active and deliberate, rather than passive and random. Six elements of Motorola's cultural style were identified and were consciously considered as change is managed. The primary cultural elements--and their implications--were found to be: Being Visionary; Open and Direct Communication; Learning; Engineering; Empowerment; and Continuous Improvement. By developing and following initiatives such as "Reducing Total Cycle Time," and "Achieving Total Customer Satisfaction., Digital Six Sigma, Customer satisfaction indices quantify the company's performance in service. Quality System Review (QSR) indexes "quality" in everything we do. Motorola has continuously managed to achieve operational innovations as advocated by Michael Hammer (2004), In April 1979 at an officers meeting, Bob Galvin said, "We will be renewing and refining our priceless heritage. We will determine the timely and effective application of new and better actions as we grow and prosper." 4 In 1980, Motorola University started is our primary resource for learning how to do things better and continuously improve existing products and processes. The university is a vehicle to enable Motorola to achieve Sustaining innovations. In 1984, Motorola created "The Organizational Effectiveness Process" (OEP), The OEP encourages the creation and continuation of many complex, simultaneous change processes throughout Motorola. It encompasses efforts in training and quality, strategy and execution,
3 An evolutionary approach to revolutionary change., article by Miraglia, Joseph F. in http://www.allbusiness.com/management/change-management/479477-1.html 4 An evolutionary approach to revolutionary change., article by Miraglia, Joseph F. in http://www.allbusiness.com/management/change-management/479477-1.html

management structure and processes. Human Resources have had commitment from and access to the CEO, as well as employee involvement at virtually every level. OEP was about managing change before thousands of changing variables managed the company. Motorolans soon understood that "change" was not the goal, because change--whether in management, technology, manufacturing, or world markets--was unavoidable. In 1992 Motorola achieved Six Sigma in everything it does and planned to achieve 10 times improvement every two years.5 Using Goran Ekvalls (1996, 1998) creative organization climate to map Motorolas culture, using a scale of 0 to 100% with steps at 25% for low 50% for average, and 75% for high will result in: Evaluation Challenge Freedom Idea Support Trust and openness Dynamism and liveliness Playfulness and Humor Debates Conflicts Risk Taking Idea Time Yes No Yes Yes Yes Yes Yes Yes No Yes Value 75% 25% 75% 100% 50% 50% 100% 100% 25% 75% 75% Weighted average 75 0 75 100 50 50 100 100 0 75 62,5 %

Based on the above results, we will acknowledge Motorola as being an enterprise with a climate that inhibits innovation. During the last decade, we have learned to use the distinctive characteristics of Motorola's corporate culture to power our change processes

5 An evolutionary approach to revolutionary change., article by Miraglia, Joseph F. in http://www.allbusiness.com/management/change-management/479477-1.html

3. Critical Appraisal of the contribution of the management of change to the Organization Improvement If there's one constant in today's world, it is change. An organizations ability to continually renew itself often determines its ultimate success or failure, and this pursuit has become a discipline all its own. Some call it "continuous improvement," others label it "change management," but the underlying idea is the same: Find opportunities to improve the organizations processes as a way to improve overall business performance In an individualistic, impersonal organization, the company response to the uncertainties in the market place was as dramatic as to look at changing cost structure first while failing to articulate the focus and persistence required in addressing volatile and highly diversified target markets. In Motorola, being the product of a lower power distance society, management by objectives, Formalization are in place as a strong foundation to diffuse change. In A Typical analytical Anglo method, Motorola followed best practice methodology in adopting John Kotter (1998)6 who has developed a parallel eight-stage change management process Kotter emphasises the eight steps without effective leadership and a comprehensive understanding of how people experience the impact of change cannot be effective. The Motorola version of Kotter model with the difference that it has been tailored to allow decision-making in the respective business units in the organisation are listed below: 1. Develop a vision with input through the involvement of representatives from different levels and constituencies. 2. Debate the vision at various levels in the organisation and respond to the inputs from these levels. 3. Agree on measurement indices and reach-out goals at corporate level, and monitor progress. 4. Enable each business unit to set its own minimum requirements and drive change according to particular customer needs of each business unit. 5. Develop and share a common change language or vocabulary so that communication between business units has a common change language. 6. Develop tools to support continuous training and development. 7. Set up networks to facilitate effective knowledge management. 8. Allow for the fact that each business unit will develop at its own speed. To understand Motorola Cultural Perspective based on Joanne Martin contrasting views, we can easily identify Motorola as being an Integration culture, with a topology that is closers to Harrison (1972), Handy (1978).This corporate culture neutralizes resistance at managing change at the individual, team and intergroup level. If we map the nature of the change to Pugh Organizational Development Matrix7 to understand the type of choice for OD intervention while focusing on the organizational level, for deciding which OD intervention to choose and more importantly whether its needed or not: Behaviour Poor morale Structure Context Inappropriate and Geography, product poorly defined goals, market, technology strategy unclear, inappropriate structure

Organizational Level

If we dive one step deeper and use Andrew Pittigrew (1973, 1985,1987a, 1987b) and Patrick Dawson (1994, 1996, 2003a) view to consider the past, present and future context in which

Kotter, J. P. (1999, Nov 2). Framwork: Overcoming Resistance to Change. Business World Source: Pugh, D. S. (1986)The Pugh Organizational Development matrix in planning and managing change (p 769), Block 4, Open University Business School, Page 6.1
7

the organization functions, including external and internal factors, we can identify the following factors (triggers): 1. Time Factor. The change under study move mark the second big restructuring for Motorola in two years: In March 2006, the company created the Networks and Enterprise unit by merging its wireless-service-provider and two-way-radio businesses8. After 15 months Motorola has largely returned back into its original model separating between business based on customer type and sales models. 2. External Factors, As a whole, Motorola has been suffering in recent quarters due to weakness in the mobile-handset business, the largest of its three groups. 3. Internal Factors. Greg Brown was promoted to president and COO overlooking all three businesses. Several factors have contributed to the need to change. If we characterize both changes by their types as: Change made in 2007 No Change made in 2006 Yes, a new direction influenced by CEO leadership style and desire to follow what he called seamless mobility as a future vision No Yes, As it has changed the organization overall sales strategy. Its a major change and required time to reach institutionalization

Planned

Incremental Radical

No No

Applying Don Warrick (1984) positive results from OD intervention we discover: July 2007 Change Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes March 2006 Change No No Yes No No No Yes Yes No Yes

Improved Organizational effectiveness, including better productivity and more Better management throughout the organization Commitment and involvement in making the organization successful improved teamwork Better understanding of organizational strengths and weaknesses Improved communications Creativity, opportunities for personal development Decrease in dysfunctional behaviour Increased ability to adapt Increased ability to attract and retain quality people

The change made in 2007 failed to have clear characteristics while fits perfectly well the when provide evidence of the usefulness of the OD application. The changes made in 2006 where affected by the integrative culture of Motorola as described by Rosabeth Moss Kanter (1983, 1989). The company failed to reap the expected benefit if their decision made in 2007 was taken 14 months earlier. The two factors: Leadership style (represented in CEO Ed Zander) and clarity of goal (looking at improving cost in areas when the real pain is coming from the mobile devices business).

Motorola combining networks, government units, Reuters news, Fri Mar 3, 2006

Motorola would have proactively identified the need for change if it managed to understand the continuity aspect of the change since during the 2006 change process; a lot was not changing below the surface of the Networks and Enterprise Integration. This failure of integration of Networks with Enterprise facilitated the implementation of the 2007 change as it seemed as going back to status Quo. Since Motorola, similarly to all Anglo-American culture, is inclined to measure financial performance when accessing achievements, the stock market is a fair indicator of the success of the change under study. The Motorola share priced has dropped from $22 to $17, a 23% drop, before the stock continue its way to the current $10-$12 mark, a 45% drop from its value of $22, before the change of 2006.9 Motorola with the cowboy hat on, announced a number of new, exciting ventures, all of which will help us provide customers with even more innovative solutions as stated by Greg Brown, President of Networks & Enterprise after the consolidation of 2006. Under an Asian Culture, where the uncertainty avoidance is non existing, management wouldnt have run after new ventures and drastic changes, They would have looked more carefully at the root cause of the problem; mobile devices and focused all efforts to fix it. Sometimes the typical Anglo characteristics prevail in enterprise perform change for the sake of change it's a strategy to accomplish value to stakeholders. According to (Collins, 2001) change is usually provoked by a major outside driving force. This outside force which made competition take number 2 position away from Motorola in the handsets business, its mainly due to lack of product portfolio, what Motorola needed is disruptive innovations and not only rely on the traditional analytical method of operational and sustain innovation, disruptive innovations create environment and a competitive edge for extraordinary growth, typical as understood by the Americans but they failed to implement it at the right time. It is also worth mentioning that 3 years in the life span of a great company as Motorola, is too little to be used in fully understanding the process over a longer period of time. The role of Change agent that was given to Greg when he became the president of the combined entity in 2006 was undermined by the lack of goal clarity and inability to innovate beyond operational and sustainable types. When he becomes CEO later in 2007, he immediately announced his decision to split Motorola into two independent companies by spinning off the mobile devices business.

From Yahoo Finance at fiannce.yahoo.com