Maxis are Malaysias leading telecommunications company and market leader with a total mobile phone subscriber base of more than seven million, as at 31 December 2005. Maxis continue to enhance how people communicate and live with an impressive array of innovative products and services. Maxis were the first to launch 3G Connect Card, PC Webmail, Video Mail and 3G prepaid. They are having significantly increased the 3G service coverage since its launch in July 2005, catering to more than 740 sites across Malaysia.
The case study of Maxis was about the company taking a generation shifts at the top management (management team) to meet the challenges of the competitors and the unpredictable demands of the global competitors in a rapid changing and hostile environment.
The study aims to analyze the implementation of change in Maxis and making a shift to update telecommunication technology from 2G to 3G. This was initiative taken by Maxis’ implementation of a generational shift in order to be competitive in global market is still questionable as the highly competitive market is indeed a tough to overcome. This study discussed:
(a) The importance of change and the demand to be competitive.
(b) The success of implementing the change process in Maxis (adopting and adapting the new technology)
(c) Importance of organizational change in Maxis
The Wireless Industry felt that inventing 3G network was critical in order to offer high-bandwidth services to their customers, or risk losing out to their competitors. Third generation mobile phones (3G) are at the introduction stage and a lucrative trend. Maxis were able to achieve market leadership because its constant efforts towards developing a corporate culture which fostered innovation. It wasn’t easy for Maxis to maintain market leadership in the ever-changing telecommunications industry.
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The vision and dedication of its’ key personnel allowed Maxis to have a clear advantage over it’s competitors. Success and winning only comes naturally when the right people initiate and lead the charge to victory. The vision and mission of Maxis played a very important role in fostering innovation for a company that aspires to be the best based on a set of values that serves as a guiding principle in all its’ relationships, internally and externally, unifies and motivates its staff, provides clarity in its’ decision making, defines the way it conduct business to the community (Maxis website, 2004).
2.0 Change Management as a competitive advantage in Maxis
To excel in today’s business climate, organizations must continually deliver a varied range of products and services that provide high business value. Even the most successful enterprises can experience failure because they unsuccessfully manage change in software development. With more demand than ever for IT (Information Technology) to quickly and accurately achieve and support corporate objectives, IT organizations must cope with a continuous barrage of changes-changes in product requirements, technology, development processes, and deployment environments.
As a result, telecommunication companies can only successfully deliver newer technology assets and applications to their current customers and attract new customer base through proactive management of change. The single, most constant factor in telecommunication companies is change (Becher, 1989). Telecommunication providing organizations and project teams must deal with rapidly changing business and product requirements, development methodologies, delivery technologies, and application architectures.
For Maxis, there are compelling reasons to believe that 3G network will work around the skepticisms surrounding the technology and succeed. The 3-G network is broadband and 6 times faster than GPRS and three times faster than EDGE (Maxis Website). With its’ abilities to deliver video-based services, it opens the door to a brand new communications medium whereby the mobile experience is made more diverse, more interactive and more enjoyable than its’ technological predecessors.
With launch of 3G in maxis, the telecom users will be able to talk to each other as well as to see each other face-to-face and share special moments as they happen. We get access to content; especially live TV and video streaming that is more diverse, richer and a lot more engaging and also very enhancing for the users.
Adopting 3G, user can easy access to broadband connectivity on your mobile device and your laptop, anytime, anywhere – and you don’t have to look for Internet cables or phone lines ever again. The great advantage of 3G at this point is due to the low broadband service penetration currently. Above all, for mobile operators, 3G provides growth as the market for voice telephony matures. Data is set to rule the communications industry of the future and thus, 3G network would be a service to look forward to by customer in future.
The major benefits that Maxis will be reaping by the proposed change management would be:
2.1 The need to reinvent the business as the business environment changes
As the competitive pressures increase, the company needs to rethink its’ business strategy and position in the value chain by contributing both to differentiation and cost leader strategies – is to simplify the value chain and move closer to customers through mobile services.
2.2 The need to be able to focus on the most differentiating activities
Most operators still want to differentiate with new mobile services, content and portals. Extensive efforts are required to develop, launch and market with increasing time-to-market pressures and by being able to focus on these most differentiating activities is a significant benefit – in view of a more complex technological environment in the future.
2.3 The need to improve operational efficiency
After usual process optimization and competence development, the main source for cost efficiency is economies of scale. There is a need to increase the cost efficiency of basic technical operations irrespective of the operators’ competitive strategy. For very large operators and international operator groups, it is possible to gain significant economies of scale in-house. Small and medium sized operators should consider a managed service provider that could deliver benefits for their business by creating higher economies of scale on their behalf.
2.4 The need to improve quality of services and operations
If Maxis manages the operations and network well with necessary capacity increases and modernization, the quality of service will be meeting the customer’s expectations. However, the quality is unlikely to be a differentiating factor as all the operators can deliver the same product. The new mobile services and applications provide excellent possibilities for quality differentiation and grabbing market share – in a certain time window. The operators should make the most out of this with the chosen help of the experienced managed service provider.
2.5 The need to manage technology and operational challenges
In traditional operator-vendor relationships, the operator has responsibility for deploying mobile services – network technologies, billing and customer care readiness. This integration responsibility involved risk and managed services contract can be set up in a way to reduce this technology and operational risk by linking service provider’s incentives to operator’s business objectives. These drivers differ from one operator to another and each of these drivers needs to be considered carefully. Since outsourcing of technical operations is such a major change, it should be based on the correct and well considered reasons.
3.0 Fostering successful change management in Maxis
Successful management improvement efforts require the active involvement of managers and staff throughout the organization to provide ideas for improvements and supply the energy and expertise needed to implement changes. Employees at all levels of high-performing organizations participate in and have a stake in improving operational and program performance to achieve results. High-performing organizations use a number of strategies and techniques to effectively involve employees, ie
(1) Fostering a performance oriented culture,
(2) Working to develop a consensus with unions on goals and strategies,
(3) Providing the training that staff need to work effectively, and
(4) Devolving authority while focusing accountability on results.
Employees in high-performing organizations understand the importance of and the connection between their performance and the organization’s success. The failure to constructively involve staff in an organization’s improvement efforts means running the risk that the changes will be more difficult and protracted than necessary (Becher, 1989). The various steps for a successful organizational change in Maxis were:
3.1 Form the coalition.
Once we create the commitment of what we want to our vision to be, the second step is to form a coalition of all stakeholders as well as both internal and external members of the organization. It’s not only the senior management, but it is everyone that is involved with the company as well.
3.2 Envision the future (Implementation of 3G Pilot Launch)
Envisioning the future is about painting a picture of what the firm is going to look like when this journey and transformation are complete. Many individuals who are part of the team will have difficulty understanding what the changes that are attempted to incorporate into the business really mean. They are going to ask how the change is going to affect the company and, more importantly, each individual within the company.
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This explained the pilot launch in Klang valley during the 3rd quarter of 2004. (The Star-In Tech, 22 June 2004). According to the news, Maxis Communications Bhd will initially roll out its 3G (third generation) mobile services in populated areas of the Klang Valley in the first 18 months to two years following its commercial launch by the end of 2004.
Maxis revealed how, by offering these services, they would be able to grow significantly faster while providing the clients with a much higher value service, and this would create more opportunities for each of the stakeholders. At the same time, if they didn’t change, they were going to fall behind in the industry, leaving fewer opportunities for employees, becoming a less important partner in the financial advisors’ growth, and not doing all that they could in assisting the investors to achieve their financial goals. It was not a very tough decision for the stakeholders once they had the information and time to confirm the vision.
3.3 Begin the transformation.
Successful change is a real challenge because no one reacts well to change except the person that is driving it. When change comes, we all tend to immediately put our hands up and try to figure out how to avoid it. Behaviorists tell us that 80 percent of us are reactive thinkers who will do anything to avoid change. Twenty percent of us are creative thinkers, meaning we initially try to avoid the change, but then examine and judge whether it’s a good change or a bad change. If we think it is a good change we will incorporate it into our lives. If creative thinkers believe it is a change for the worse, they will just figure out ways to go around it.
The only way to ensure that change occurs smoothly is to have a road map that outlines the process that will be incorporate into your firm to make it work for mutual benefit.
3.4 Embed it in the culture.
Everything that was doing should be consistent with the commitment. For example, Maxis was constantly promoting 3G network advantage to their valuable customer over the country during the initial launch. This creates a sense of commitment for all the employees that they are undergoing change and it is therefore real and it creates a new culture.
3.5 Accelerate the pace.
Maxis helped everyone see the increased competition and the need to differentiate it from all the other firms. Maxis understand the likely outcome if you don’t make the changes. They know that it will be fine to be uncomfortable with change but that the winner in business will always be the one who most effectively adapts to the new environment.
3.6 Collaboration with other organizations
According to Mobilecomms-technology.com, Maxis realized that the success of any 3G network relies on the availability of 3G handsets in the marketplace. A joint venture between Sony and Ericsson has been contracted by Maxis to provide 300,000 3G enabled handsets in a contract worth RM20 million for the period 2004-05. Maxis also intend to continue its close relationship with both Motorola and Siemens, and 3G handsets from these companies will also be available.
Maxis also collaborated with Astro, especially in streaming live telecasts. Taken from the same article; Maxis mobile subscribers are also set to get video streaming services before the 3G network goes live, as Astro are to provide program clips, running at 64kbps and 24 frames per second, to the existing Maxis 2G GPRS Network. In addition, Motorola is installing its new push-to-talk over cellular service on the Maxis 2G network that will allow a single subscriber to connect with one or many users at one time via the single push of a button on their handset (this should see most use in the corporate market place for the easy arrangement of conference calls).
3.7 Continuously reinvent yourself
High-performing organizations seek to involve and engage employees by devolving authority to lower levels of the organization. Employees are more likely to support changes when they have the necessary amount of authority and flexibility–along with commensurate accountability and incentives–to advance the agency’s goals and improve performance. Allowing employees to bring their expertise and judgment to bear in meeting their responsibilities can help agencies capitalize on their employees’ talents, leading to more effective and efficient operations and improved customer service.
To continue usage of video streaming and video calls, Maxis has lowered the cost of 3G network charge toward their customer to increase the usage of it. The excerpt blow was taken from the article ‘Maxis lowers cost of 3G adoption’ published on August 7, 2006.
“We are seeing a healthy uptake on 3G services with people coming on board at an incremental increase of 30% every month. We believe free video calling will further accelerate 3G adoption in Malaysia,” said Maxis Head of Products and New Businesses, Dr. Nikolai Dobberstein.
At the of end July, Maxis has 256,000 customers with 3G mobile phones in its base, of which 150,000 are active 3G users. “By removing the cost barrier, Maxis hopes to drive up usage among 3G handset owners in its base and counter the prevalent notion of 3G being expensive. With Maxis’ continual low pricing strategy, we are turning that around and proving that Maxis 3G is as affordable as 2G,” said Dobberstein.
4.0 Comments and Suggestions
The success of the change implementation was due to the fact that it was an initiative from top management and it was clearly seen that the shift is urgent with the competitors in the market coming up with new invention. (It is an internal change and the change agent is the top management). This was congruent with one of the Organanizational Development principle, which stated that the Change Management should start from the top. According to Rothwell et al (2010), Organizational Development works best when it is supported by top managers. This is because top managers are traditionally the chief power brokers and change agents in the organization; they often control an organization’s resources and reward system.
The expertise of the staff was recognized and their ideas were discussed during meetings therefore capitalizing on their talents will enhance the operations and allow a smooth revolution of change.
The staffs were committed to change and they were aware that there is pressure from the environment and Maxis have to differentiate from other firms and the change was necessary and the change is directed to positive results so there was no resistance to change. There is a need for change that was understood by employees. The management also has created the awareness of change. Change is inevitable, and this message was disseminated throughout the organization. This ensure low level of resistance to change.
The collaboration with Sony, Ericson, Motorola and Astro has strengthen the change as companies supporting each other in terms of sharing of network, video streaming has led to a win -win situation in the corporate market.
However, the change process in Maxis was a success but the future has yet to be seen in this era of companies coming up with new intervention and innovation to have the competitive advantage but the war is not over yet for Maxis as further strategies to combat the competitions need to be planned ahead of time so as to meet the demands of the future market in the era of globalization.
The group view that other strategies such as new design and more practical models may be able to penetrate the market apart from technology which is the main area of competitiveness as customers of today do not only value the update of technology but the design has cosmetic value and it influence the user in the trendy world of today.
The telecommunication industry felt it was not practical and risky to launch 3G network in the market because it final result is quite unpredictable. It could be said that the industry as well as stakeholders still felt sceptical even though the pilot plant was considered a success. However after the implementation, Maxis has proved that it had been successful in term of change management.
This was proved by statistics from The Mobile World that noted Maxis ended Q1 ’06 with some 8.2 million customers – giving them a market share of 42.5%. The country has a population penetration rate of 80%.” Even though this could be directly linked to 3G, but it is not to be denied that 3G contributed a major part in the increase of market share.
This notion was strengthen by the fact that Maxis has the most extensive integrated 3G network coverage in all major cities in the country. The Klang Valley, Penang, Johor Bahru, Kuantan, Alor Setar, Kota Kinabalu, Kuching and other cities are now with 3G connectivity.
Today, Maxis have over 300 buildings with Maxis 3G/2G transmitters, and also over 350 Maxis Utopia and Airzëd WLAN hotspots.
After the tremendous success in Malaysia, Maxis planned to penetrate 3G in Indonesia (end of year 2006) using the same change management plan. Thus, the well planned change can bring the expected result in the end. The change plan is very important to make a company to be market leader or sustain in the market.
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