1

Group Members:

Ajay Kumar 1411211

G Nitin 1411224

Krubakar M 1411237

Nikhil Kumar Choudhary 1411251

Shipra Agrawal 1411265

Anand Krishnan 1411278

The members of Group 1 take pleasure in submitting the report on Organizational facets of Ericsson.

We by the means of this study made an attempt to apply the theoretical concepts taught in the class

into the real world. Our reason of taking up Ericsson was its legacy. It is a 140 year old organization,

and over the course of over an century it has found out a structure that helps it best to cope up with its

environment. In the process of this study we would like to thank Ericsson for its support in terms of

organizational charts, the teacher of the subject at IIM Bangalore Mr. Sourav Mukherjee for whetting

our brains to explore further the dimensions of the subject, and the group members who stood thick

and thin throughout the term 1.

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TABLE OF CONTENTS

INTRODUCTION ................................................................................................................................................................ 3

Brief History ................................................................................................................................................. 3

Structural Dimensions of Ericsson....................................................................................................... 3

Contextual Dimension .............................................................................................................................. 4

IMPACTs OF ENVIRONMENT ...................................................................................................................................... 4

Major environmental factors ................................................................................................................. 4

GLOBAL ORGANIZATION DESIGN ............................................................................................................................. 6

Global Organization Structure............................................................................................................... 6

Ericsson Global Co-ordination Mechanisms ..................................................................................... 9

Complex-Dynamic Matrix ...................................................................................................................... 10

Natural System Design of Ericsson: ................................................................................................... 10

RELATIONSHIP WITH OTHER ORGANIZATIONS ............................................................................................ 11

Resource dependency............................................................................................................................. 11

Establishing relationships .................................................................................................................... 12

Influencing key sectors .......................................................................................................................... 12

Collaborative network ........................................................................................................................... 12

Institutional isomorphism .................................................................................................................... 12

Emergence of new companies to serve niche environments ................................................... 12

INFORMATION AND CONTROL PROCESSES ...................................................................................................... 13

Control levels ............................................................................................................................................. 13

Knowledge Management ....................................................................................................................... 13

Knowledge Sharing .................................................................................................................................. 14

External Coordination ............................................................................................................................ 14

Customer relationship system ............................................................................................................ 14

Overview of IT impact on the department ...................................................................................... 14

ORGANIZATIONAL CONFLICT & POWER EQUATIONS ................................................................................. 15

CORPORATE CULTURE AND VALUES ................................................................................................................... 16

COMPETITOR ANALYSIS & ERICSSON’S STRATEGY ...................................................................................... 17

Porter’s analysis of competitive forces ............................................................................................ 17

Miles and Snow’s Strategy Typology ................................................................................................. 18

Ericsson’s strategy ................................................................................................................................... 18

Long term strategy framework ........................................................................................................... 19

Goal Effectiveness .................................................................................................................................... 19

Observations and Conclusion: .................................................................................................................................. 20

REFERENCES ................................................................................................................................................................... 20

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INTRODUCTION

BRIEF HISTORY

Ericsson started in 1876, when Lars Magnus Ericsson opened telegraph repair shop. It started

with a group of three people Lars Magnus Ericsson himself, a 12- year old boy Gabriel

Bildsten who used to run errands, and Carl Johan Andersson, a colleague who soon became

Ericsson’s partner1. Today Ericsson employs more than 100,000 people and work with

customers in more than 180 countries,2, 3

Over a period of close to 138 years Ericsson has been able to:

Bring together the best knowledge and expertise to move closer to fulfilling its vision.

It has a presence in 180 countries and annually it does a business of $35 billion

annually.

It has a huge client list. Only in India the client list includes Bharti, Idea, Vodafone,

Aircel, Reliance and Uninor.4

It has not only been a facilitator of innovations, but also it is the organisation that

defines the way ahead for telecommunication. For eg, Bluetooth is an invention of

Ericsson5.

The burgeoning data usage in developed countries and huge population of developing

countries calls for modern manufacturing and usage of developed information

technologies. Presently Ericsson is aiming towards interconnecting humans with

devices, and taking the nodal points of communication to 50 billion6.

If you don’t change with changing times you are going to perish. Ericsson has a

strong Research and Development wing, and a very strong presence in nearly all

regions.

Airtel, Idea, Vodafone, Sprint, Etisalat are brands in itself. People have a sense of

reverence for these companies. Ericsson is the value creator for these companies.

When Ericsson tries to move ahead in technology it directly impacts 1/3rd

of the

telecom world . Its way of working impacts societies, motivation and definition of

ethics.

STRUCTURAL DIMENSIONS OF ERICSSON

Formalization: Ericsson is a process oriented company. There is comprehensive amount of

documentation available on employee scope, responsibility, Ethics, Installation/Upgrade

procedures etc. The technical aspect of Formalization is covered in a repository called

“ALEX”. It is a library of technical information of Ericsson’s portfolio. The scope of every

engineer is defined prior to assigning him to a project. During the case of emergency when

there are huge revenue losses there is a defined protocol to be followed.

Specialization: Ericsson has a vast and diverse portfolio. It has its presence starting from the

equipments on towers that receives the encoded signal from users over the air medium to the

database that maintains the records of the subscribers. The whole process has too many

intermediate products and every product is a technology in itself. The amount of

specialization is huge. It takes close to 18-24 months to develop mastery over one product.

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Hierarchy of authority: There exists a certain hierarchal order when seen from a CEO

perspective; however when it comes to a department the hierarchy is not tall. For instance in

Business Support System department, there is a Solution Integrator who reports to a manager

and the manager in turn reports to the director.

Centralization: In day to day working the organization is fairly de-centralized. The regional

units are de-centralized in their ways of working. Employees are empowered to take informed

decisions, and employees are generally advised by their managers to work as per the scope of

the project. The sales team of India is fairly de-centralized and has some degree of freedom

from the Swedish sales team.

Professionalism: Till a decade ago the amount of formalization used to be very low.

However, cost cutting measures led to low morale in employees and hence an increased

attrition rate. To overcome the leverage enjoyed by employees there has been a huge push for

codification of knowledge. This has led to saving of money in training purposes, as

codification is anyways cheaper than personalization. However Ericsson still focuses a lot on

development of its employees in terms of trainings and certifications.

CONTEXTUAL DIMENSION

Size: Ericsson has a huge employee base which presently hovers close to 100,000. Its

revenue is $35 billion.

Environment: Environment has a very strong influence on decisions in Ericsson.

Government, TRAI in India, UN on radiations, customers, trends in technology all play an

important role.

Culture: Ericsson as opposed to its biggest competitor Huwaei has a fairly liberal culture.

The adaptive culture manifests itself in training provided to employees; every manager

advises to take some time out of the daily schedule for self-development and enhancing your

own knowledge.

Technology: Mobile phones were unheard of until 1991, and today the amount of data

promised by 4G is 100 Mbps. The growth of networks is a logarithmic functions.

IMPACTS OF ENVIRONMENT

The structure of the organization is affected to a great extent by the kind of environment the

firms chooses to operate in.

MAJOR ENVIRONMENTAL FACTORS

Technology: So rapid has been the advancement of technology that starting from 1991-92

when mobile phones were introduced, that right now over 6.5 billion7 is the penetration of

mobile phones. The expectations of people have been rising to such an extent that basic

features such as calling and texting is taken for granted as features by any operator. The

world has moved with a lightening pace from 1G, or the analog system, to 4G and beyond.

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Emergence of China and

India: China is the world’s

largest exporter of raw material.

The availability of cheap labor

in India and China have made

these two countries as favorable

investment destinations for

manufacturing, for operations

when it comes to support.

Ericsson has developed four

pools of fungible resources in

four different countries. These

four pools serve the service

needs of all countries of the

world. One of the four pools is

in India.

Demand for specialized

resources: When functioning in

a technology intensive sector the

amount of specialization needs to be fairly large. The time-span available for training

resources on 4G services has been very less as compared to the time that was available for

implementation and training of resources for 3G.

Cash Crunch for Indian Operators: The Indian telecom companies are sitting on a pile of

huge debt. That makes improvement in terms of telecom infrastructure, improvements in

bandwidth, and other spending a touchy issue.7

Bharti alone sits on a debt pile of $10.4

billion.

Enhanced competition: Huwaei has been fiercely gaining market share. Till half a decade

ago Ericsson’s biggest competitor was NSN (Nokia-Siemens Networks), however the present

day Huwaei is like a fairy tale story. Even in areas such as Database management and CDR

processing companies like IBM, Wipro have been eating the revenue pie.

Government Policies: Cancelled telecom licenses, billion dollar tax case of Vodafone, sky

high charges of frequency blocks; you name it and you have it in India.

Difference in Economic Development: The ability of Ericsson to provide solutions also

depends on the economic development of nations. The ARPU generated in developed

countries is more than that of developing economies; and ARPU of Nigeria is entirely

different. The higher the ARPU of a nation, the greater the is the ability of an operator to

upgrade his network. On this account Vodafone UK is better placed in terms of cash

resources as compared to Idea Cellular Limited.

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GLOBAL ORGANIZATION DESIGN

In this section we will be talking about the evolution of Ericsson from a mechanical

engineering workshop launched by Lars Magnus Ericsson and Carl Johan Andersson in a

workshop in Stockholm to a global telecomm service provider with over 100,000 employees

with operations in over 180 countries.

The company started off as a mechanical engineering workshop and due to Mr. Ericsson

affiliation towards telephony systems, ended up in repair & servicing of telephone equipment,

but seeing an opportunity to expand he studied existing telephone and started manufacturing

and selling of his own equipment. Ericsson remained relevant in the market by constant

innovation and reached almost 25,000 sales by the mid of 1890s. With Swedish market

almost saturated, it was time to expand geographically hence began the International stage in

1890s.

Export to Britain and Russia were early markets for Ericsson and with a transformation to a

limited liability company in 1896, the expansion process was in full throttle. The company

also increased its exports to Australia and New Zealand till 1907.

The next step of multinational expansion started happening in 1907 with the plans to start

manufacturing plants in Buffalo, New York and in Mexico during the 1909. This continued

till 1945 when the company decided to go truly Global.

In response to multiple competitors and changing manufacturing laws in major markets like

Brazil, Mexico, Australia Ericsson started large-scale manufacturing plants overseas. Also

Landmark deals such as the AXE system deal with Saudi-Arabia to increase her telephony

services by 200%. An increase in interest from the U.S market in 1980s and the emergence of

the mobile telephony service in the 1990s has led the company to where they are today.

En-route all the above-mentioned organic expansion; Ericsson also expanded inorganically

via mergers and acquisition, which started as early as 1918 with Stockholms Almänna

Telefonaktiebolag (SAT) and then moved onto joint ventures with huge market players such

as Microsoft, Sony, HP etc

GLOBAL ORGANIZATION STRUCTURE

Ericsson global has now become a colossus of an organization and we have made an attempt

to understand the global structure and the level of interaction between the units in the

organizations. Ericsson provides telecom services in over 180 countries so they work in a

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highly complex & unstable environment so there will be a good amount of customizability in

the customer facing units of the organization.

The structure can be broken down into two different parts for the purpose of studying.

First is the geographic structure. Ericsson has regional offices in 10 geographies to cater to

the specific client requirements in countries in the respective regions. These are customer-

facing units and each region’s head reports directly to the CEO.

The second part of the organization is the global product structure. Ericsson has four major

product teams highlighted in green in the above picture. Each team is responsible for

developing new products and software in their respective product lines. For example BU

Multimedia is responsible for all media technologies; BU Global Services develops products

related to revenue management services. Business Unit Networks works in developing

technologies and products for the radio networks. It encompasses the equipments on towers,

the microwave equipments for transferring data from towers to the Base Station Controller,

electromagnetic to electric convertors from BSC to Master Switching Centers. Each of these

product unit’s head also directly report to the CEO of Ericsson.

The other common functionalities like HR, Legal Affairs, Branding etc. are kept as separate

functional teams globally.

Whenever a product team like for instance BU Global Services (BUGS) develops a new

product, it makes a detail document of instructions for its installation, configuration,

operation and maintenance. It trains a team from each of the regions on operations of the

product and the respective team takes care of implementation and maintenance in their

respective geographies. There are Line Managers in every regional geographic office to

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ensure that there is smooth transfer of information between the products team and their

respective region.

The hardware used to provide the network are either assembled in Sweden, or sourced from

China and are done in such a way that they can be utilized in any of the operating locations

with changes in software parameters. Hence when it comes to hardware Ericsson has a global

product strategy. Hardware technology like Databases, Servers, Charging Control Nodes etc

are sourced in such a way that they are available and can be utilized across different geo-

operations.

Taking the example of Etisalat, a Middle East company (Emirates Group) that announced its

interest in Operations in India and purchased products from Ericsson. Their infrastructure

was in place and ready to go live when a Supreme Court Ruling cancelled 12 telecom

licenses in the 2G spectrum scam that made them shut their shop in India. As a testament to

the standardization of Ericsson, the same equipment installed in India was dismantled and re-

installed in middle-east to continue their operations with little design changes.

The company has chosen this hybrid organizational structure due to the following

advantages.

ADVANTAGES

i) The presence of regional customer facing units, who implement the project and stay

in touch with customers make Ericsson, suited to better responsiveness to the

customer. For instance, in 2012, Idea was growing rapidly in the data segment. They

were using NSN charging system for deducting money from customers for data

usage. Ericsson regional unit RINA, realized the flank, and proposed real time

charging solution to Idea. It also made USSD (the charge deduction message at the

end of call) feasible which was not feasible in the NSN system.

ii) The advantage of having a regional unit at the customer site leads to customer

satisfaction, as she thinks that the people who can solve her problems are a stone’s

throw away distance. It also leads to communication clarity, as co-ordination and

contact points are clear. As an example, Ericsson has an office with 60 personnel in

Pune as Idea has their largest database server HUB in Pune.

iii) Business requirement in every country is very different from another. Hence having a

dedicated regional office is highly beneficial. Just to give an example Idea India

offers 1500+ tariff plans, each having distinct features and requirements. Plus

majority of the plans used in India are Prepaid whereas it is the opposite in the US.

Ericsson has to create provisions accordingly and this is the case for each of the 10

regions Ericsson is working in.

iv) Autonomy regarding how to run the project is de-centralized to the respective

geographic heads who decides the Project Manager and the Project Team. This avoids

a lot of piling up of decisions and the bureaucratic lethargy that comes along with

vertical hierarchy.

v) The common processes units such as BUGS, BUN provide economies of scale; R &

D, Product Development & Purchasing happens centrally through the use of IT tools.

This also helps in developing in-depth expertise within Ericsson.

vi) Since their products are more or less similar for every region, the organization

follows a global product strategy. Common Business Units across regions facilitates

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knowledge and experience sharing. The product that is being used in India is the same

that is being installed in North America. Use of IT tool further facilitates knowledge

sharing.

DISADVANTAGES

i) The co-ordination between product lines is poor. For instance the product team of

Charging has no Idea about the product division of Radio Access Networks.

ii) There is high attrition rate among the lower levels in the regional units of Ericsson.

This is mainly due to the monotonous nature of the job as they are given complete set

of instructions and procedures to be followed for each product.

iii) The problem of having a geographic division doesn’t give acknowledgeable access to

in-depth knowledge; such as R & D units having no knowledge sharing with the

project implementation team. To overcome this, the department Directors keep

knowledge sessions and training. People from various countries travel to Sweden on a

regular basis to get acquainted with new technologies and to have hands on

experience before snow-balling the knowledge to the regional units.

iv) This type of structure has high need for coordination and Integration and thus this

leads to higher cost of maintaining a fully qualified and PMP certified Project

Manager.

v) Mutual adjustments and collaboration is necessary to make the structure work, and

seeing this most of the Region Heads, and Heads of important money making units

are Swedish.

ERICSSON GLOBAL CO-ORDINATION MECHANISMS

The vastness of the organization offers major issues- the possibility of lack of communication

and co-ordination between global units. To prevent the “US Vs Them” feeling creeping into

the organization Ericsson uses techniques such as global teams, expanded co-ordination roles

and excellent informal communication lines.

Formation of Global teams in Ericsson is almost always need based, in-case there is a skill

requirement for a particular undertaking that is missing in the regional units the Project

Management Office (PMO) will initiate a request in an internal tool “MORE” which with

the help of BUGS units will find and pullout resources from different geographical locations

all over the world and they work together with units present in multiple locations to deliver

the project.

Despite the large size of the organization the organization maintains personal relations using

tools like Ericoll which is a Knowledge Repository updated by employees for best practices

etc and can be searched and queried for solutions with options to talk to document owners via

Lync Communicator tool, ensuring that transfer is completed successfully.

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COMPLEX-DYNAMIC MATRIX

Ericsson as a whole works in a complex

environment, as there are too many

external factors to deal with. The

organization from a broad perspective is

divided into two parts. The regional units

of Ericsson which are customer facing

units, and the product units which

develop the technologies and pass it on to

regional units to implement. The product

development Units such as BU-GS, BU-

M, BU-NW are responsible for delving

their efforts into customer research and

fulfilling them. They need to develop

newer technologies and are hence

required to work organically. On the

other hand, the regional units work in a

comparatively stable environment as the

methodology, and documentation of implementation is presecribed by the Product team.

When working with a huge organization, with huge number of departments it requires a full

time integrator to co-ordinate between Ericsson and Customer, and between various

departments.

NATURAL SYSTEM DESIGN OF ERICSSON:

Horizontal Structure: A horizontal structure is

more suited for being a learning organization. The

Vertical structure creates distance between

managers at the top of the organization and

workers in the technical core. In Ericsson working

culture is horizontal, the hierarchy is flattened (it is

virtually impossible to eliminate it). Self-directed

teams who implement the projects have their scope

defined and they work as the fundamental unit.

Empowered Roles: Ericsson empowers its people

to play roles in its development. The employees

are encouraged to work with the customers, deal

with them and locate their problems. Even when it

comes to implementation of projects, the employees find a good amount of leeway in

providing the solution.

For instance, the Project Manager and the Solution Architect, responsible for developing the

solution, wanted to do a Data Migration Project for Idea Cellular Limited in three phases.

However, one of the engineers suggested a method to merge first and second stage and it

made sense from cost saving point of view. The suggestion was included and the final

solution had first and second stage merged as one.

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Another example that can illustrate this point is, the concept of “Lead Generation”. An

engineer working on the site finds a requirement at the customer’s site, he can put it

internally as a “Sales Lead” to the sales team. In case it has merit and can bring additional

revenue to the company, the site engineer is given a share of the total revenue.

Shared Information: A company that wants to be a learning organization needs to follow a

shared information methodology to see the results of the liberal culture. Information serves as

one of the cornerstone. A learning organization serves to exploit the advantages of big a huge

company, a huge brand and simultaneously function as a small and quick learning

organization. Morning meetings, group emails, handover when joining are few of the ways to

share information.

Adaptive Culture: The only constant thing in this world is change. Those that didn’t change

its culture with changing times faced troubled waters like Xerox Corporation. Even Ericsson

faced difficult times during dotcom Bubble, however Ericsson has learned its lesson well.

Adaptive Culture encourages openness, equality, continous improvement and change.

Moreover, activities, symbols that create status differences such as executive dining or

reserved parking spaces are discarded. Each person is a valued contributor.

Collaborative Structure: Experimentations with competitors, technical counterparts, mobile

phone companies (the sony-ericsson deal), collaborations with universities has been a

hallmark of Ericsson. Gone are the days when independence was the buzz word, these days

inter-dependence is the norm.

RELATIONSHIP WITH OTHER ORGANIZATIONS

Relationship between organizations can be analyzed by looking at four perspectives.

1. Resource dependency

2. Collaborative network

3. Institutional Isomorphism

4. Emergence of new companies to serve niche environments.

RESOURCE DEPENDENCY

The need for scarce resources in the environment is necessary for any organization’s survival.

Organizations typically try to gain control of the scare resources to be more independent or

they establish links with other organizations to reduce vulnerability. The later reduces the

level in independence.

To influence resources, a firm can adopt two strategies:

1. Establish favorable relationships with key elements

2. Shape the domain by influencing key sectors

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Ericsson has signed “anti-poaching” deals with companies like Idea Cellular Limited,

Vodafone to disallow movement of critical engineers and resources from Ericsson to the

operators.

ESTABLISHING RELATIONSHIPS

Ericsson is referred as the telecom shark. The reason being the number of acquisitions carried

out by them to control the business.7

In 2014, they have already made two acquisitions

namely “Red Bee Media” and “Azuki Systems”. It has been making acquisitions strongly to

expand its reach.

INFLUENCING KEY SECTORS

Ericsson acquisition of LHS is a clear example of using acquisition as a strategy to enter into

new business segments. The major reason behind the acquisition of LHS is to enter the post-

paid billing solutions business, which had always been a weak segment of Ericsson before

that. One of the main key sector for Ericsson has been technology. It has a lot many

collaboration with many universities in Europe to influence and develop technology.

COLLABORATIVE NETWORK

Ericsson partnered with General Electric as Ericsson Mobile communications to establish a

US presence and to leverage GE’s brand recognition.

Ericsson has a strong Knowledge management system called Ericoll. It is a pure codification

based Knowledge management database as many functions that the firm operates are highly

repetitive in nature.

Not all Collaboration see good days, Sony-Ericsson the hugely talked about joint venture

came to an end in 2012 when the mobile-phone unit was into heavy losses. Ericsson

partnered with Sony and formed the joint venture Sony Ericsson to venture into the fast

growing mobile phone market in 2001. Sony bought out Ericsson’s share in 2012 for $1.5

billion to end the joint venture and get complete hold on the mobile phone business.

INSTITUTIONAL ISOMORPHISM

When the environment of business is uncertain, organization follow each other blindly. A

good example can be the investment in Indian CDMA sector. Huge amount of investment

was made by both operators and OEMs however the lackluster performance of CDMA as

compared to the European 2G/3G standard forced Ericsson to close down its CDMA unit in

India.

EMERGENCE OF NEW COMPANIES TO SERVE NICHE ENVIRONMENTS

Ericsson has always used its resources to venture into new business environments. Post-paid

was a fast growing but a weak zone for Ericsson. To get a strong hold in that business it

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acquired LHS. From time to time Ericsson has been gathering patents from various out of

business companies like Motorola.

INFORMATION AND CONTROL PROCESSES

CONTROL LEVELS

DEPARTMENT LEVEL

Lower level managers focus on the performance of people at the department level. They see

that the department goals and standards are met, to ensure that the organization attain its

overall goal. The unit BSS, responsible for implementing Charging and Billing Solutions

follow highly process/behavioral oriented control systems.

One example of this is the daily status report that is submitted by the department employees

to their managers. The managers need this report on daily basis for tracking the status of

work done by the employees. This control process enables managers to provide high

supervision and monitoring. They are kept aware of the methods and processes followed by

the people to accomplish their task. The managers are informed about the fact whether an

employee is on schedule regarding a particular task assigned to him and if he is not the

manager can take necessary corrective steps. The way of communication here is e-mail which

is a result of development of Information Technology. We can in some cases see daily status

reports as Output Control but it fits as a behavioral control more often.

Another example is the weekly update provided by the project managers to the higher level of

the organization. This is done using a tool called ‘PROP S-C’. The lower level managers are

required to provide the project status regarding the ongoing project through the given tool.

Higher level managers can then track the status of the project through this tool on weekly

basis so as to ensure that there are no delays.

KNOWLEDGE MANAGEMENT

The regional units use the tool ‘ERICOLL’ for codification of intellectual and creative

resources. The employees submit relevant information using this tool which can be utilized

by other employees when needed. ‘ERICOLL’ contains the contact details of the person

submitting the information in case people want further clarification regarding the submitted

data. The person is then contacted either through e-mail or phone for further questions. The

only issue here is the quality and quantity of data available on the tool. Since documentation

is not the primary task of engineers, the information available can be vague/incomplete or

difficult to comprehend for others. The issue can be resolved if some quality control

measures can be applied.

“ALEX” is the other tool used for sharing of procedures by the product Business Units to the

regional units. These documents are comprehensive in nature and contain everything starting

from specifications, installation, configuration, operations and maintenance. The quality and

authenticity of these documents are unquestionable. However, not everyone can comment or

modify these documents they are the prerogative of the Business Teams.

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KNOWLEDGE SHARING

Knowledge sharing forms an important part of the BSS unit. Mentoring and knowledge

sharing sessions are two major ways of knowledge transfer. The sessions are done either face

to face or virtually using the web (Skype). The department has increased its goal congruence

by including knowledge sharing as one of the bases for appraisals. Appraisals of employees

in BSS unit are based on inputs such as no. of sessions conducted and no. of knowledge

sharing documents submitted. This provides a good reason for the employees to participate in

knowledge sharing and thus improve the overall department knowledge.

EXTERNAL COORDINATION

CUSTOMER RELATIONSHIP SYSTEM

There are separate regional units under the BSS, which form the customer facing units. These

units are formed to handle customer interactions, project implementation and provide

operational support to the department. These smaller units strengthen the relationship of

organization with the customers and helps in smooth flow of operations.

OVERVIEW OF IT IMPACT ON THE DEPARTMENT

Codification: Documents with necessary information available in a central repository.

Both Time and Effort is saved when an already completed task is done again and

again by other employees.

IT Tools: Various tools such as ‘PROP S-C’, ‘ITM’ makes process based control

much easier. These tools enable efficient and convenient tracking of the tasks.

Knowledge Sharing: Introduction of new tools and applications have made knowledge

transfer much more convenient even when people are far away. The software and

hardware improvements have made online video conferences, video lectures very

easy to use.

Horizontal Linkages: Online portals like ‘MORE’ has made horizontal linkages

stronger. Project managers can mention their project’s resource requirements. This

information is shared with the support department responsible for providing the

necessary resources. Both the teams have access over the portal and sharing

information becomes much easier.

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ORGANIZATIONAL CONFLICT & POWER EQUATIONS

People from BSS develop issues with a host of departments, and at times even with the

customer organizations.

LOCATION OF CONFLICT

Inter-department These issues crop up between different members belonging to different

departments. A worthy example is issues with operations for handover of projects.

Implementation team after implementing the project hands over the responsibilities of the

project to the operations team. In case the Operator has a contract with Ericsson, the project is

handed over internally to Ericsson Operations team.

Intra-department:

“A huge project for Idea Cellular Limited involved migrating 50 million subscribers from

NSN Charging System to Ericsson Charging System. The project was a long running project

that ran for close to 18 months. It involved a lot of complexities as NSN and Ericsson have

different logics and databases management system for subscriber balances. In the last phase,

the Solution Architect requested for a replacement. However, when it came to handing over

the complex solution to the new Solution Architect, the old Architect showed a lukewarm

response. The old system was an ingenious system built under his guidance, and he was

uncomfortable in sharing the fine details of it with the new Architect.”

Inter-organization conflicts also arise when the customer tries to get features delivered

which he has not paid for. These conflicts at times snowballs and have to be resolved at the

Director or Vice-President level.

Another common source of inter-organization conflict is, cross hiring between industries.

Vexed by cross-hiring Ericsson went onto to sign anti-poaching deals with Idea Cellular

Limited, barring employees to move across organizations.

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RESOLUTION OF CONFLICT

a) Most of the inter-department conflicts are resolved through the Project Manager.

Project Managers are Full-time Integrators who act as strong horizontal link. He co-

ordinates amongst various departments of Ericsson, say, Operations and BSS, BSS

and Sales, and BSS and Customer. He has the formal authority vested in him to take

up issues and escalate.

b) Intra-department conflicts are the most difficult to handle, as the buck stops at the

manager. He has to diligently take a call on how to handle the conflict. Mostly, the

shots are politically taken based on how critical is the resource. The more critical the

resource the more decisions tend to go in his favor.

c) A rational model resolves inter-organizational conflicts, as money and legality of the

issue act as threats. So generally both the parties work on a rational approach to

resolve the conflict at hand.

SOURCES OF POWER

a) Formal Positions: There is a well established hierarchy that provides formal

authority to people. A Sr. Manager is the reporting person of a Solution Integrator; A

Sr. Manager reports to a General Manager, who in directly reports to the head of BSS

team. Every movement up the hierarchy endorses more and more formal authority.

b) Resources: In the BSS team, resources working on Mediation and Call Detail Record

Processing are very rare, as most of them keep on changing jobs and companies like

IBM, and Wipro have huge demand for people in this field. They wield good amount

of power when it comes to working timings, getting increments and having a say over

things.

c) Network Centrality: Ericsson has the same curse as many service industries- they

are scattered throughout the world. The management team of BSS seats in Gurgaon,

and regional offices of BSS exist in Chennai, Pune and Kolkata. The people who sit at

Gurgaon have faster access to information, have proximity to the management and are

involved in a lot of interaction networks.

CORPORATE CULTURE AND VALUES

Ericsson is a process-oriented company. The advantage of being close to 140 year old, and

the survival of a bankruptcy makes it extremely good with processes. The people who work

on technology are empowered to bring out the output in the way they think it to be the best;

and on that account the culture is fairly open.

CORE VALUES

The core values of Ericsson are, Respect, Professionalism and Perseverance. Being from a

liberal country and of European origin Ericsson has a decentralised way of working.

Individuals are given their space of working, they are respected for the decisions they take,

and as a whole this leads to professionalism.

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ETHICAL VALUES

There is a code of ethics at Ericsson, called COBE (Code of Business Ethics) which every

new joinee has to go through. It lays down the basic level of Ethics that are expected out of

every employee. However majority of ethics value perpetuate from the leadership. BSS in

general has a Ethical based leadership, however in many of the decisions that require some

amount of autonomy there are processes how to go about. The code is surely not exhaustive,

and Ericsson takes care of that by protecting and promoting the whistleblower concept.

SOCIAL RESPONSIBILITIES

Ericsson as an organization is involved in loads of CSR activities. Telecom in today’s world

has become an emergency service. The massive landslides in Uttarakhand saw many units of

Ericsson moving to the devastation hit area to bring up emergency services back on foot.

COMPETITOR ANALYSIS & ERICSSON’S STRATEGY

PORTER’S ANALYSIS OF COMPETITIVE FORCES

1. Threat of new entrants: The threat of new entrants by completely new players is

very low due to the huge capital and technological investment that is required.

Although companies like Samsung and Oracle are looking for opportunities in the

telecom infrastructure space. The IT services companies like IBM and Wipro have

been eating a share of the revenue pie.

2. Power of Ericsson as a supplier: Ericsson being the No. 1 company in

telecommunication services can charge higher prices for its premium services, and

hence has considerable power price determination. They are price setters rather than

price takers. Product differentiation being the primary strategy of Ericsson, their high

investment in technology leads to better products with higher prices.

3. Power of Ericsson as a buyer: Ericsson sources all the electronic items from China

and other raw materials like cables from European countries. Purely on price point of

view, Huawei is better placed than Ericsson since they source all their raw materials

from China, and hence low cost. Although Ericsson is a major buyer from the above

mentioned sources, since the demand is ever growing for electronic items from

competitors, Ericsson doesn’t have much power over a buyer.

4. The threat of substitutes: The threat of substitutes for a telecom industry is very

low. Wifi can cause a dent in its revenues if its accessibility is increased. If the wifi

accessibility reaches such a level that one doesn’t require a cell phone tower at all to

communicate it can pose a threat to radio and RF units of the industry. However, OSS

and BSS are revenue monitoring units and they are here to stay. The threat is of better

and improved systems for OSS-BSS purposes.

5. Rivalry among existing competitors: The 3 major competitors for Ericsson are as

follows

Huawei Investment Holding Co., Ltd

Alcatel-Lucent

Nokia Networking Solutions

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PORTER’S COMPETITIVE STRATEGY

MILES AND SNOW’S STRATEGY TYPOLOGY

ERICSSON’S STRATEGY

Ericsson’s strategy is based on the below mentioned four points, which it calls as the “four

pillars” 12

Ericsson intends to excel in technological products that makes it capable of handling

surging traffic. Improved network equipments, faster processing and efficient

utilization of bandwidth.

Ericsson intends to expand into services and compete head on with IBM and other

service industries in the Information and Communications Technology landscape.

Ericsson intends to expands its presence and services in the support domain. It intends

to provide better reliability, and new solutions and technologies to improve support.

Ericsson has been to a greater extent successful and it intends to continue expanding

itself as a enabler to a more Networked Society through inter-communication of

devices.

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The following framework depicts its strategy better, taken from their website sited in reference

number 12

[The figure has been taken from their website sited in reference number 12]

LONG TERM STRATEGY FRAMEWORK

Huwaei recently knocked off Ericsson from the spot of top telecom vendor in terms of

revenue turnover14

. However, Ericsson expects to focus on areas such as OSS, BSS, media,

IP Networking and Cloud. For instance Ericsson has quit itself from the handset market as it

doesn’t see it fit to continue, and intends to make its core areas more profitable.

Ericsson focuses to support its long term strategy by judicial usage of resources in terms of

investments in services capabilities and product development. Ericsson plans to make more

use of it huge name and century old domain experience to enter new territories through the

means of growth, acquisitions and partnerships.

GOAL EFFECTIVENESS

Customer

expectation and

loyalty: The

customer retention

rate is high. Hence

we can assume that

they have scored

high in customer

satisfaction domain.

Learning and

growth: Ericsson

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has high employee retention rate in core development areas. There is high investment in

technology by the company, and hence there is continuous process improvement. Also, the

number of patents produced by Ericsson is high, and hence a sign of growth and innovation.

Internal business processes: Ericsson is a process oriented company. Through its vast

experience of 138 years it has developed business processes and tools of working that have

stood the tides of time. However, they don’t rest on their laurels and they make it a point to

be on their toes. Various IT processes such as MORE (Resource Requirement Tool), PROPS-

C (To track status of Projects), and ITM(Integrated Tool Management for continuous

appraisal)

OBSERVATIONS AND CONCLUSION:

1. The nature of knowledge transfer from Business Units to Geographic Units is limited

to how to go about installing the technology. The transfer of knowledge is superficial.

The geographical units work on implementing the technology, and don’t have access

to deeper knowledge on how the technology is built. This leads to geographical units

starting to feel their work as monotonous and repetitive and without depth. Deeper co-

ordination between the Product Business Units and Geographical Regions will go a

long way in motivating the engineers and enhancing learning curve.

2. The team which works on a project has to deal with dual reporting. He reports to his

permanent domain/Line manager, and during the tenure of the project also reports to

the Project Manager. There is no formalized mechanism of sending feedback to the

Domain Manager by the Project Manager and hence it has no role in the continual

increment process.

3. “Ericoll” is the codification of knowledge which employees gain while working on

projects. Good quality of the documents will not only attract loyal usage to the forum

but also bring forth many more worthwhile contributions. A person from each

department should be made in-charge of working on the quality of documents.

REFERENCES

1. http://www.ericssonhistory.com/company/from-birth-to-merger/

2. http://www.ericsson.com/thecompany/company_facts/facts_figures

3. http://www.ericsson.com/res/thecompany/docs/this-is-ericsson.pdf

4. http://www.ericsson.com/thecompany/our_publications/reference-stories-a-z

5. http://www.ericsson.com/news/120612_bluetooth_inventor_nominated_for_top_european_honor_

244159019_c

6. http://www.ericsson.com/news/1775026

7. http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/a#subscribers

8. http://articles.economictimes.indiatimes.com/2014-06-03/news/50301590_1_bharti-airtel-tower-

sale-african-towers

9. http://www.ericsson.com/thecompany/company_facts/facts_figures

10. http://www.ericssonhistory.com/company/

11. http://indiatoday.intoday.in/story/etisalat-india-operation-2g-licences/1/174854.html 12. (http://www.ericsson.com/thecompany/investors/financial_reports/2013/annual13/en/o

ur-business/our-strategy) 13. http://www.ericsson.com/thecompany/our_publications/reference-stories-a-z#a-to-z-

letter-I 14. http://www.rcrwireless.com/20130820/network-infrastructure/huawei-ericsson-and-

cisco-lead-in-telecom-vendor-rankings