"Change is the law of life and those who look only to the past or present are certain to miss the future", (John, F Kennedy).
Organizational change is crucial for an organization to achieve success. Twenty years back reflects mainly organizational change that mostly failed. This is because changes normally take longer to be implemented than planned, they may have quality problems or they may cost more than the actual budget.
Based on this, change management is not an easy task and involves risk. To be able to manage change efficiently one should understand change, strategy, theories of change and how to implement change. Managers also have to be the leaders and show good motivation, coordination and control in order to solve change resistance.
In a following section, an organizational analysis of O2 has been provided. Different triggers for change have also been discussed and this provided an insight on the change approach adopted by O2. Then, PEST and SWOT analysis tools were used to gather information on O2.
There are four types of organisational change:
- Tuning: proactive incremental change for efficiency increase
- Adaptation: reactive incremental change to respond to actions of organisation's competitors
- Re-orientation: proactive strategic change used to bring major change within the organisation
- Recreation: strategic change requiring change to the ways organisation operates.
An organisation change model may help in understanding the organisation, what to change and how to bring about the change. When change is not continuous change targets should be: mission, goals, strategy, and culture. However, when change is continuous targets should be processes, technology, and management practices.
Customers from different locations in London gave their responses to the questionnaire survey. In total, 21 employed and student customers responded. Among the respondents there were female and male with an average age between 20s and over 40s. The number of customers less than a quarter during the past few months have being increasing slightly; this is due to the new I-Phone device, only available with O2. The average of those who were using O2 services between six to nine months fell in less than 0.1 of the respondents. About a quarter of customers are delighted to be an O2 customer for more than a year.
Customers were aware of changing aspects in O2. A majority numbering over two thirds of the respondents were unsure and did not know anything about the environmental factors affecting O2. 21 respondents, given ratios of 5:21 were very comfortable to state that O2 has improved its alliances externally. According to one respondent O2 market price is more competitive and online service is much easier, another one stated the introduction of international calls. And a small minority of the respondents thought O2 was forced to modify its business within, but no comments were left.
Customers found that O2 has got advantage over its competitors, because of its performance and flexibility to provide highly designed products and services. A quarter of respondents related to O2's innovative methods to attract new insights, and cause impression for those who are already using their services. O2's accessibility got the attention of only 2 out of 21 customers.
But in last but not atleast customers were really satisfied with O2 and happy to continue to be with O2. Few customers are in doubt whether they would switch phone provider and less than a decimal definitely will cancel their agreement with O2.
Organizations are forced to change due to internal and external factors. A company's vision or strategy, the performance or new opportunities in a company may indicate the need to change. At O2 UK, the main triggers for change have been illustrated below:
- To innovate new products at O2 is essential to sustain competition in the telecommunication market. In 2007, O2 had the biggest range of exclusive devices - 44 post-pay and 24 pre-pay handsets (O2 Website).
- There are also changes in the customers' requirements and tastes. In order to keep up O2 has continued to invest in its range of 3G mobile data services.
- The changing domestic and global economic crisis have forced O2's competitor, Vodafone and itself to formally announce combining together network sites to cut future costs regarding infrastructure (The Independent News: 24/03/09).
- O2 also found new ideas about how to deliver services to its customers and thus, gives its customers control. The Bill Manager and Bill Analyzer is an example.
O2 also organizes events and exhibitions and uses sponsorship as a marketing strategy to create more emotional connections with its customers by giving away priority tickets, fast tract entry, advance notice and blue room access to its customers.
Gathering information and being informed is important to make right decisions.
For this PEST & SWOT analysis has been used.
Political: The policies being adopted by each country have an impact on size and probability of markets. Competition can be unfair in this. During the current global financial crisis, government may impose trade protection, which will restrict entry in telecommunication market. O2 market strategy and price may be affected.
Economic: Production costs and cost of capital affect the economic environment of an organization. The global economic crisis has had a huge impact on the world economy. Like other businesses, telecommunication market has declined, but some mobile companies are still sustaining the crisis, for example O2 and Vodafone.
Social: Organizations need to consider the values, attitudes and beliefs, demographic trends, lifestyle preferences and skills availability of people (Kelly 2009, p.81-83). Culture can be a problem but O2 is managing this well growing across Europe but more focus is being put on behavior and practice to beat the crisis. Since young people use mobile phone, it has promoted the network technology changes. Thus, internet has become and irreversible trend. SMS is a popular symbol particularly amongst youth. MMS (multimedia messaging service) is increasingly popular with the lower price as consumers struggle to pay monthly tariffs in a recession. Pay-as-you-go market has been growing faster than contract network.
Technological: Technological change causes people to find new ways to behave at home and work. Mobile technology industry is the forefront of scientific and technological revolution; Innovation is necessary to be successful otherwise competitors may use better technology.
SWOT analysis is undertaken by businesses at the start of planning. The purpose is to identify organizational strengths, weaknesses, opportunities and threats.
O2 is a leading provider of mobile and broadband services to consumers and businesses in the UK. The company is the leader in non-voice services, including text, media messaging, games, music and video, as well as data connections via GPRS, HSDPA, 3G and WLAN (O2 press release).
However, O2 needs to be more flexible to gain new contracts. All decisions are made at O2's head office, which may be impractical in the future. Shops need to have some independence in making trivial decisions.
- New technologies development.
- The increasing demand for 3G and broadband service.
- Mobile advertisement service as a huge potential market to make profit.
- International competitors in the telecommunications industry will bring more intense competition.
- Economic crisis has made the European market become very unstable.
- Health issue has always been inevitable and may hinder the development of the industry.
- The use of different Information Systems within a Company, all developed by different software companies at different times could pose a risk for the compatibility of the whole system.
In the telecommunication industry, O2 ranks first among its competitors. It is now part of Telefónica Group and both are working together to offer high quality affordable products to its customers in the Uk and across Europe. Only in the UK, O2 has about 18.4 million customers. In year 2008, it was ranked 6th best place to work and it is the only one to have achieved a three-star accreditation. O2 has definitely a very clear objective of Innovation to be competitive, which is reflected by their action points.
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