The Chief Executive of Samsung Electronics recently told its employees that, “We must begin anew. Most of Samsung’s flagship businesses and products will become obsolete within ten years.” This corporate strategy of reinvention would inevitably involve significant change for employees. Do you think that resistance from employees is likely to be the biggest problem for a business that wants to reinvent itself? Justify your answer with reference to Samsung Electronics and or/other organisations that you know.
A corporate strategy is a plan based on the corporate aims and objectives which defines the overall scope and direction of the business by identifying its choice of business, markets and activities. For an organisation facing such problems where reinvention may have to occur, deep consideration would have to be taken into account factoring in all the issues that cause resistance to change; the causes of change; the effect change will have on employees and ways to manage change.
The Finnish company Nokia is a prime example of company having to take on a new corporate strategy in order to compete with competitors that have over taken them in the market. Nokia had to replace its chief executive Olli-Pekka Kallasvuo, who had spent over half his life at the mobile phone maker. The reason for this change is because Nokia where struggling to compete with the smartphone market and were very slow to innovate. Nokia’s share price was falling, whilst Apple, a competitor with a smart phone on the market, saw a rise in their net profit by 78%. There are various reasons why external causes of change have taken place, including technological advances and competitors actions that have left Nokia behind.
When making corporate changes on a company, issues such as resistance from employees is likely to be a problem. This is because of factors such a fear of the unknown, fear of failure, lack of trust and losing something of value. For Nokia, a new chief executive,...
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