The foundation of organizations primarily resides on the ability for organizational change when adapting into a globalized fashion. Moran (2014) argues different types of change organizations embark on to maintain a successful organization in the business climate of globalization. For instance, reactive change prohibits the need for crisis change in order to prevent a negative outcome of the experiences of an international corporation such as their supplies used in the marketplace. The international corporation of Ericsson has implemented a series of changes for a competitive advantage in the globalized marketplace since the early 1990’s. Although organizations must enter the international business climate, organizations need to be able to enforce change to maintain success as evidenced by corporations such as Ericsson. Thus, globalization is forcing organizations to take a step back and initiate change within their corporation to give a competitive advantage with their products in the marketplace.
Ericsson is a prime example of using Moran’s (2014) theory of reactionary change to initiate success in the global marketplace. Usually at this time in a corporation, warning signs such as numbers within the company are beginning to head downhill with the success of products and sales with neighboring competitors. Moran (2014) highlights the need for this type of change when he states “sales and profits are off former highs and managers begin to realize that the company is on a downslope and the readiness for change begins to develop” (p. 108). Ericsson experienced this downhill spiral in the 1990’s with an IT product beginning to fail in the global marketplace. Upon almost entering a crisis, managers began to work hard to help their employees work toward reactionary change within the organization. However, they chose to begin at the local level before moving towards a globalized level.
The idea of beginning at a local level is a theory of internationalization (as cited by Moran, 2014). Moran argues how companies will begin to change at a localized level before expanding into the globalized world. For instance, Moran (2014) highlights this tactic of corporations adapting to new technology at the local level when he states “the danger for the MNE is that the local partner will learn its advanced technology before the MNE learns the local market” (p. 111). Ericsson was well aware of this idea of competing at a local level, and began to train employees on the IT product within the locality of the market. Scholar Iveroth who worked closely with Ericson during this time studied their methodology and reported “the change agents were characterized by their long experience of working at both the local and global level in the F and A department within Ericsson” (p. 139). Thus, Ericsson was working towards achieving a global competitive advantage by first working with their local partners. Evidently, the changes implemented by this company allowed Ericcson to head towards a competitive advantage with their IT product in the marketplace.
In conclusion, the changes initiated by an international firm such as Ericsson manifested the need for corporations to be reactionary when their products are headed in a downward spin. Upon using at IT product at Ericsson, Ericcson enacted changes at a local level competing in the local marketplace after this product became more knowledgeable to employees. Even though organizations must enter the international business climate, organizations need to be able to enforce change to maintain success as evidenced by corporations such as Ericsson. The ability to begin to compete at local level will lead to a global scale, which gives companies a competitive advantage. Thus, the foundation of an international firm such as Ericsson is to assess how they must change to head towards a more promising future in the globalized marketplace.
References
Iveroth, Einar. (2010). Inside Ericsson: A Framework for the Practice of Leading Global It-Enabled
Change. California Management Review. 53(1). 136-151.
Moran, Robert. & Abramson Neil & Moran, Sarah V. (2014). Managing Cultural Differences. Oxford:
Routledge.
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