From Birth To Merger
The first Swedish manufacturing company to focus on electrical equipment Öller & Co. Served as a training ground of skillful telecommunications specialists, several of whom left the company after a few years to start up their own workshops. The most successful of them was Lars Magnus Ericsson, who joined the company as a student in 1867.
After successfully learning the craft of instrument maker, he left Öller & Co in 1872 to embark on studies abroad on a travel scholarship he obtained through the recommendation of company founder Henric Öller. Ericsson spent a few years working at Siemens & Halske in Germany, returning to Öller & Co in 1875. That year, the company was at its peak, with 58 employees, 36 operative machines and production amounting to nearly SEK 100,000. Lars Magnus Ericsson’s return, however, marked the beginning of the end for Öller & Co.
In 1877, Ericsson obtained his first contract with Televerket, the Swedish PTT, and began to compete with his former employer, particularly in the new telephone technology. When the telephone came to Sweden in 1877, Öller quickly incorporated the new product into his range, producing the first model in the same year. But after that, Ericsson took the lead
Due to the competition from Ericsson and from American manufacturers, Öller never achieved any telephone sales to speak of. Nor was he among the front-runners in other telecommunications technology. When in 1883, Lars Magnus Ericsson and H. T. Cedergren constructed a telephone switch for up to 10 numbers, Öller & Co followed suit later in the same year, with a similar model for the Stockholm Bell Company. When Ericsson and Cedergren obtained a new patent for a switch for two phone lines in 1885, it was also not long, before Öller produced a similar device.
However, in 1886, the competition from his former protégés became too much for Öller, and he decided to phase out most of his production. Not only had Ericsson succeeded in making cheaper and better devices than Öller & Co, but he had also won over Öller’s most highly skilled employees by offering them higher salaries. Öller subsequently continued mainly with repair operations. He died in 1889 from a severe case of pneumonia, whereupon Öller & Co was shut down after 33 years of operation.
When Lars Magnus Ericsson mechanical engineering workshop opened its doors; the first customer was the Stockholm Fire Department, which on April 6, 1876 paid the sum of SEK 2 for the repair of instruments. This laid the foundation for a global company, although Lars Magnus Ericsson himself had no such ambitions when he started his company.
1876 was the year when the American inventor Alexander Graham Bell submitted his application for a patent on a working telephone, but Lars Magnus Ericsson had no knowledge of this. L M Ericsson & Co., as the company was called, was not founded to exploit any invention. Instead, the objective was to achieve the founder’s dream of independence.
Lars Magnus Ericsson had extensive training as an instrument maker and had also worked abroad in Germany and Switzerland. At the age of 30, he stepped out on his own. Apart from Lars Magnus Ericsson himself, the company’s employees consisted of Gabriel Bildsten, a 12-year old errand boy, and Carl Johan Andersson, a colleague who soon became Ericsson’s partner.
The workshop was situated in a small kitchen in the courtyard building at Drottninggatan 15 in Stockholm. Repairs and small mechanical engineering jobs were the company’s main business during the initial years. Work also included repairs of telegraph instruments.
The Swedish State Railways quickly became the largest customer. In September, Ericsson delivered two pointer telegraphs of his own design to the railway. This was the largest order to date, for which he was paid the well-needed sum of SEK 860.
Operations soon outgrew the workshop, which was moved towards the end of 1876 to Jakobsbergsgatan 23B. The following year, it was time to move again to an old courtyard at Oxtorget
By this time, the telephone had come to Sweden. The first demonstrations were held in Stockholm in August 1877. On October 13, Joseph Leja advertised a new telephone in the Swedish daily Dagens Nyheter.
No one knows exactly when Lars Magnus Ericsson himself first came into contact with the new invention. It may have been at the end of 1877 or in early 1878. It is clear, however, that he soon received telephones for repair and that he not only immediately realized the telephone’s possibilities, but also discovered weaknesses in Bell’s design that he subsequently began to correct
The first time a telephone is mentioned in Ericsson’s business records was on March 4, 1878, when he received SEK 4 for the repair of six telephone sets.
The first telephones manufactured by Ericsson were presented later that year. The first two telephones with ear trumpets were delivered to Bredenbergs on November 14 at a price of SEK 55 per pair. More deliveries soon followed. It was also during this year that Lars Magnus Ericsson married Hilda Simonsson, who quickly became involved in the mechanical engineering workshop’s business.
By 1880, Ericsson’s workshop had ten employees. Production now consisted of telephones, fire telegraphs and various types of electrical instruments. The workshop once again changed premises to Biblioteksgatan 5, where it remained for the following four years.
In fierce competition with the Bell Company, L M Ericsson & Co was chosen in 1881 as the supplier to the newly established Gefle Telefonförening. Shortly thereafter, Ericsson was selected as the telephone supplier for Bergen in Norway.
By 1882, there were 50 employees who worked 65 hours a week. The company now supplied complete wall phones in a model that soon became known throughout the world as the? Swedish pattern
The workshop was modernized in 1883, and a steam engine was installed to power the manufacturing tools, presses, etc. The following years up until the company’s incorporation in 1896 were characterized by strong growth and new customers around the world. In 1887, the world’s largest telephone station at that time was inaugurated in Stockholm using a multiple switchboard designed by Ericsson
At the time of incorporation in 1896, Lars Magnus Ericsson’s company had grown into a major enterprise. Additional manufacturing plants had been erected on Tulegatan. There were more than 500 employees, and the major share of production was exported. By June 1, 1896, Erisson’s workshops had produced 100,000 telephones.
Ericsson Mobile Communications is a global provider of mobile multimedia devices, including feature-rich phones, accessories and PC cards. The products combine powerful technology with innovative applications for mobile imaging, music, communications and entertainment. The net result is that Ericsson is an enticing brand that creates compelling business opportunities for mobile operators and desirable, fun products for end users
Ericsson Mobile Communications was established in 2001 by telecommunications leader Ericsson and consumer electronics powerhouse Corporation. The company is owned equally by Ericsson and announced its first joint products in March 2002.
Ericsson products have universal appeal and are different in the key areas of imaging, music, design and applications. The company has launched products that make best use of the major mobile communications technologies, such as the 2G and 3G platforms, while enhancing its offerings to entry-level markets.
As new products are introduced to end user acclaim, existing products continue to receive accolades and Ericsson is today accepted as a world leader in design and innovation. The globally acclaimed T610 and later generations of the company’s product portfolio frequently win awards. The GSM Association voted the V800 as Best 3G Handset for 2004, a fully-featured phone made for Vodafone with the full range of mobile entertainment features and multi-directional camera, and the K750i received the TIPA Award 2005/2006 for ‘Best Mobile Imaging Device’, chosen by 31 leading European photography/imagining magazines and judged on quality, performance and value for money. In February 2007 the GSM Association presented Ericsson with the ‘Best 3GSM Mobile Handset’ award for the K800 Cyber-shot phone.
Ericsson in Bangladesh.
Ericsson started its journey in Bangladesh about 10 years back. At the beginning of its operation it uses to provide telephone equipments to the Bangladesh telephone and telegraph board. At that time the employees of the organization was mostly form Sweden with a few lower level employees who were locals.
The establishment of mobile communication gave Ericsson the prospect of selling their network equipments to the mobile service providing companies that were coming in to the market.
In the later years Ericsson signed contracts to supply and roll out all the Mobile Soft switch packet core and backbone transmission equipment for the Telecom industries in Bangladesh. Ericsson is responsible for the design, rollout, operations, management and maintenance of some of the mobile network providers of Bangladesh. Grameenphone, which was established in the year 1997, is one of the leading customers of Ericsson.
The Bangladeshi market has a huge potential for an organization such as Ericsson. Their focus in Bangladesh is to ensure that they offer customers a wide range of differentiating services that will add value to their lives, as well as redefining customer service in the country. Since Ericsson has been operating for a long period of time it has the knowledge and understanding of the requirements, as well as the local competence, to ensure that its customers are able to meet their commitment of bringing superior quality network and mobile communications to the people of Bangladesh.
Karl-Henrik Sundström, Ericsson’s Executive Vice President and Chief Financial Officer, says: “I am proud to be part of this significant milestone for Ericsson in Bangladesh. Over the past few years, we have witnessed phenomenal growth in the country’s telecommunications industry and we are confident that this trend will continue.”
According to analyst reports, the number of mobile phone users in Bangladesh stood at 9.4 million in 2005, up 144% from 3.85 million in 2004. The number of total GSM subscribers in the world are expected to grow to 3 billion by 2008, and 80% of this growth will come from high growth markets such as Bangladesh. Bangladesh was one of Ericsson’s top markets in South East Asia and it that it had been receiving tremendous support from the Ericsson Executive Management Team in Stockholm.
Ericsson believes in an all communicating world where telecommunication is affordable to all. By focusing on solutions and innovative business models that lead to low total cost of ownership, Ericsson helps operators expand their reach and profitably tap into new and low-ARPU users”.
With this new company status of becoming one of the local companies, Ericsson has broaden its service offerings to include managed services (operations and hosting) that can help operators to reduce their operational expenditure and launch new services fast and cost-efficiently to meeting growing consumer demand,” explains Signell.
Country Manager of Ericsson Bangladesh, Arun Bansal, explains that the company now has greater flexibility to work with local partners to provide more cost-effective network roll out solutions.
“Partnerships with local telecom companies will also enable Ericsson to enhance its contribution towards the development of Bangladeshi telecom industry through sharing and transfer of knowledge,” adds Bansal. Ericsson Bangladesh planned to double its staff strength in 2006, adding that the company had made a concerted effort to transfer knowledge and technical skills to local employees.
“Ericsson recognizes that people and intellectual capital are its greatest assets and today, Ericsson Bangladesh already has one of the largest in-country expertise and support team. Last year, Ericsson has implemented several initiatives to ensure continuous competence development. This is part of our global policy to build a solid base of home grown experts who can then go on to share their expertise in other parts of the world
Ericsson has been present in Bangladesh since 1997, supporting its customers through a local branch office, Ericsson AB – Branch Office Dhaka.
Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world.
Strong historical background:
Ericsson has a history of 131 years of leadership in the telecommunications industry. Ericsson is a world-leading provider of telecommunications equipment and related services to mobile and fixed network operators globally. Over 1,000 networks in 140 countries utilize our network equipment and 40 percent of all mobile calls are made through our systems. They are one of the few companies worldwide that can offer end-to-end solutions for all major mobile communication standards.
They have invested heavily in R&D and actively promote open standards and systems. Also reflecting our ongoing commitment to technological leadership, we have one of the industry’s most comprehensive intellectual property portfolio containing over 20,000 patents.
Their origins date back to 1876. The parent company is Telefonaktiebolaget LM Ericsson (company registration number 556016-0680).
Involving in CSR (Corporate Social Responsibilities)
Ericsson believes that there should be a faster and more effective response to disasters. Ericsson Response™ is a global initiative aimed at responding to human suffering caused by disasters.
The initiative formalizes Ericsson’s commitment to the issue based on its previous involvement and experience in various disaster response efforts throughout the world. Throughout Ericsson’s 125-year history, the company has been involved in numerous disaster response efforts. They have provided mobile communication to refugee camps during the Kosovo crisis, reinstalling damaged telecom equipment and provided tents to earthquake victims in Turkey, as well as phones to flood victims in Vietnam.
In recent years, disasters have increased in severity and scope and we want to do our part. Through communications aid, expertise and our position as a global company, we can support faster and more coordinated approaches to disaster response efforts.
Ericsson is in partnership with the Office for the Coordination of Humanitarian Affairs (OCHA), UNICEF, World Food Programme (WFP) and the International Federation of Red Cross and Red Crescent Societies (IFRC) developing disaster preparedness programs around the world.
Ericsson is also partnering with the private sector. Several companies are interested and Ericsson encourages dialogue with local customers or other companies that could bring important elements to the program
The core parts in the Ericsson Response program are:
- Ericsson Response volunteers and equipment
- Research and Technical Development
- Partnership with relief organizations and the private sector
Controllable & Uncontrollable Factors
Every business organization principally consists of internal environment factors and set of external environmental factors. Internal environment factors are generally considered as controllable factors of the organization. Internal environment factors are important to business like personal (human) resource department. Marketing department, production department, physical facilities, accounting and finance departments and SWOT analysis.
Therefore, the organization has control over these factors; these factors are modified or altered by the organization that suits for the business environment. Uncontrollable factors are those, which the company has no control over. These are mostly external factors that affect the way a business operates. It ranges form factors such as government to such factors as weather that a company has no control over.
In the following case there were many controllable and uncontrollable factors and we have tried our best to put forward as many as possible.
The Bangladeshi market structure is very different from the one that exists in the Sweden. Bangladesh is a small country with a huge population of about 15 million people. This means that the potential of a business to penetrate the market is huge. Though the telecommunication industry of Bangladesh is at its infant stage it is growing at a very fast pace. No one company has total control over the market. From industry to industry the market structure differs. So it is hard for companies to predict what they might face in the future.
Unfavorable Economic policy & uncertain political situation
Since the caretaker government came into power the economic conditions of Bangladesh have changed a lot. The new caretaker government is forcing companies and individuals to comply with the rules and regulations. This has adversely affected the economic conditions as organizations and individuals are being deterred from investing in the economy. This has adversely affected Ericsson as companies are either delaying or cutting down on buying telecommunication equipment.
The political situation has also changed in recent years. This has adversely affected many organizations as well as Ericsson as many affluent people were connected to these political parties and the recent crisis has caused these people to hold on to their money rather than reinvesting in the economy. Also since the change in political situation the amount of lobbying and bribing to get contracts has gone down which has caused many companies to lose their income
Skilled managerial & technical manpower of growing middle class
Bangladesh’s private sector has now become the backbone of its economic activity Skilled managerial and technical manpower and a middle class of Bangladesh has brought in new companies to start investing in the technological sector of Bangladesh as this skilled and technical manpower are much cheaper than those available abroad. This has favorably affected Ericsson, as the organizations do not have to bring in specialists from abroad to look after the operations that are being conducted. It is also advantageous for Ericsson as they can reduce cost of their operation by using the local skilled employees.
Economic development program in the infrastructure sector
Bangladesh does not have very good infrastructure. Most of the infrastructure used by Bangladesh is either outdated or is not maintained properly. The telecommunication industry of Bangladesh helped to improve the infrastructure and communication throughout Bangladesh. But this has not been possible without lobbying. Many companies tried to enter the telecom industry of Bangladesh but seeing the potential market size but could not survive and in some cases could not even enter due to the political situation and the use of lobbying by the already established companies that are operating.
Industrial development in Bangladesh is based on licensing regulation. The restrictive practices by the government to hold back the information sector has acted as a barrier for the telecommunication industries in Bangladesh.
Steep growth in Export and Import
The growth of import and export has given many new companies the opportunity to invest in the Bangladesh economy. Only twenty percent of the Bangladesh telecommunication market has been penetrated and there is still potential for growth. The somewhat unrestrictive import and export policies of Bangladesh have given these foreign companies the ability to import equipments at a very low cost and hence build strong network over a very short period of time.
Political and Social Uncertainty
The political and social uncertainty acts as a big factor in attracting companies to invest. For Ericsson it was hard to enter the market at first as most of the time the contracts were given to those organization that had political uphold. This factor has acted as a barrier for a long period of time as the government at times has restricted the use of certain equipments intentionally to favor a competing company.
Level of competition from other firms
The total potential size of the existing telecommunication market is quite large. Most of the competition the Ericsson faces is from Chinese companies that offer their product at a very low rate but Ericsson also faces competition from companies such as Motorola, Nokia Siemens and other well-known companies. The competition is mostly in terms of technology and quality of voice service offered.
The environmental condition of Bangladesh is ever changing. The extreme conditions such as – Storms and floods caused many havoc. For these reasons companies have to come up with equipments that are weather proof and can withstand these extreme conditions. This has also affected Ericsson, as they have to bring in equipments that can live up to these ever-changing conditions. In some cases the equipments become damaged very quickly because of the harsh nature of the environment. For this reason the organization has to face complains about their equipments, which at times create, negative impression in the mind of the customers.
Customers buying from different vendors
To reduce cost customers buy telecommunication equipments from different vendors, the equipments of different vendors are of different grades and quality, and for these reasons sometimes Ericsson’s equipments do not work in a proper manner, as they are not always compatible with the other supplier’s equipment. The resulting affect is that the network set up by the organization for their customers do not operate at full capacity and result in call drops hence the quality of voice communication varies from time to time.
As we know that technology is moving at a very fast pace. There is a rapid growth in technological advancements, which causes products to become outdated very quickly. As products are becoming obsolete more often, companies need to be an innovator or a leader in coming up with new and more advanced products to meet the demand of the customers.
Adaptation of unique Ericsson culture
Every organization has a unique culture. Ericsson also has a culture known as the Ericsson culture and the organization pays heed to see that the employees are following the Ericsson culture. The main reason behind this being that they don not want the employees the feel alienated because they are from a different cultural background. To reduce the cultural gap that exists in every market when an organization is operating at a global level a common culture helps to reduce this gap and improve the communication between the employees.
Forming alliance with the other companies
Whether to form alliance with another company or not totally depends on the organization. It is within the hands of Ericsson to choose whether they should form an alliance with other telecommunication vendors and try to get a bigger chunk of the market and share the technology and cost. Like in did in case of Ericsson Mobile phones. Ericsson formed an Alliance with to come up with new mobile phone sets. The Bangladeshi market for telecom equipment is very competitive and by forming an alliance or by taking over other companies they can reduce the level of competition.
Localizing the company from the Bangladesh’s perspective
This is also in the hands of Ericsson. Ericsson is localizing the company by replacing the existing expatriate post with local employees. This is a wise move by the organization as this reduces the cost of operation of running a company overseas and increases the local employee’s motivation to work, as they know that they have a chance to climb the corporate ladder. Also, by employing the local employees the organization and reduce the cultural barrier and the language barrier between the organization and its customers.
Choice of providing online services. The company can choose to provide online service or can take a completely different approach
Ericsson has a good support service system but it requires the company to be informed through the phone about the problem that has occurred. It also involves the organization to send a support service officer to go and investigate the problem and come up with solution. Ericsson can choose to provide an online service to its customers so that they can trouble shoot the problem up to a certain level by themselves.
Expansion Plans of Ericsson
Ericsson is looking forward to expand its operation to cover the 3G-sector as well. This is a controllable factor as the organization can choose whether it should provide 3G ready equipments to its customers. It has plans to provide high-speed Internet service to the Bangladeshi mobile phone users so that they can use this service while on the move. Their expansion plan involves penetrating the market with new technology, which will help its customers to provide better service to its users.
Work environment within Ericsson
To encourage labor involvement and creativity Ericsson provides rewards for achievements. On a wall in the reception room are photographs of employees being given awards for excellence. Ericsson has annual awards of excellence. They also try to recognize people who have done outstanding things. The organization divides its employees into small work groups who always work together to achieve their goals. They have a unique rewarding system in which the employees are given a certain amount of commission for their achievements our outstanding sales performance. This reward is also shared among the other employees so that they do not lose hope. Employees who perform better get a higher amount of monetary reward than the ones who have not performed at all or have perfomed badly. But every employee is rewarded more or less. Money is one thing, but recognition is another. People thrive on recognition. The organization recognizes this and provides promotions to its employees based on their performance.
Restructuring within the company
In the last 2 years the Ericsson is restructuring its organization by replacing the expatriate posts with local posts. The local employees are being trained to take over the positions that were previously held by other expatriate employees of Ericsson. It has also cut down on the level of hierarchy at some of the levels to accommodate a much smoother flow of information and faster decision making.
Modification of Products According to the company
Ericsson provides telecom equipment to many mobile service providers. The main customer of Ericsson is GrameenPhone with Banglalink and Aktel being it’s other customers. Warid Telecom is also being provided with equipments form Ericsson. Since the different operators use different frequencies Ericsson has to modify the products according to the particular companies’ specifications.
Investment in Technology
Can also be counted as a controllable factor. Since the investment on technological factors is totally dependent on the capacity of the organization. The organization could choose whether to invest in new technologies or to reside with the existing technology. The efficiency of the equipments that Ericsson provides differentiates the vendor in terms of speed, accuracy or creativity in delivering information.
Investment in infrastructure and R&D
This is also a controllable factor. To stay ahead of the competition Ericsson invests heavily on the development and improvement of its existing technology. Investment in technology such as 3G equipments for Bangladeshi market will pay of in the future as the existing industry is growing very quickly and is becoming more demanding day by day. The investment in new technology will improve the communication network and increase the network coverage of equipment, which in term will reduce cost for the organization as they would have to use less equipment in a given area to keep their networks running.
Ericsson were doing business in Bangladesh but sometimes focusing on Swedish strategy.
Since Ericsson is a Swedish originate multi national company, it had top-level management officials from Sweden in Bangladesh. Most of the decisions regarding the perspective of Bangladesh were taken by the management figures here, but sometimes they had to wait for some decisions from the head office in Sweden. Now the company decided from January 2008 it will be localized. So form now on they won’t have to wait for the decision from Head office in Sweden.
Bangladesh had a favorable living condition.
In January 1997 after having traveled back and forth between Dhaka and Stockholm for a few months management decided to move some of their top level executive to Dhaka. The officials adjusted well to their new home and excited to be part of the growing economy and business opportunities which Bangladesh appears to offer.
Political unrest is common factor over there in Bangladesh.
Bangladesh’s process of economic reformed had been rutted in a political negotiation process among its political parties and interest groups. While Bangladesh was one of the largest practicing democracies in the world the electoral process sometimes was not always free or had fair elections.
Mixed economy exists in Bangladesh.
Bangladesh’s economic diversity matched its social diversity. Both high-tech and low-tech operated concurrently. Technology ranged from bullock carts with modem wheels to space satellite capability. Bangladesh was a mixed economy, very mixed, with contrast and contradiction abounding.
Bangladesh market is diversified.
The diversity was reflected in the markets for consumer product. Class was difficult to define in India because incomes by itself did not define and individuals class, specifically because official figures did not include the “Black” or underground economy. Purchase behavior was related to cultural conditioning, location, source of income, and to some extent education and occupation. Despite the low level of per capita income, there existed in India a large class of consumers for packaged and branded consumer goods, home appliances, entertainment electronics and personal transport.
International Human Resource Issue
Ericson is now moving towards the localization:
Previously erricson followed the international policy, but from January 1908 it will adopted the local policy. Its HR policy, company’s rules and regulations will strictly maintained by local guideline.
Erricson has less number of expatriate
Only the top few management people are from outside Bangladesh, basically they are from Sweden. But management is trying to reducing this number. They will establish such a management which contains as much local people as possible. Because again the reason is localization. They are trying to total implementation of local strategy.
Power distance in erricson is minimum:
Ericson tries to maintain low amount of power distance. In their lower management position they followed higherarchical strategy, the mid to upper management they followed flat type of power distribution. So the amount of power distance is very minimum.
Inside the organization Erricson followed only one culture.
In inside the organization erricson has only one culture, erricson culture. But its not much different from the Bangladeshi culture, it though then it may cause problem, because maximum or most of the employee is from Bangladesh or locally recruited employee. So they used a modified culture, mixture of Bangladeshi and corporate culture for the greater benefit of the organization.
Management ensured fair amount of empowerment:
In erricson employee get empowerment according to their job responsibility. In the job there is no interruption. And the employee gets the right to do what is important for the job. Even erricson don’t have any strict guideline to follow, to finish one’s job. They do have a guideline, if the employee have a better option then its not a problem to implement
No cultural distance exists in Erricson:
Management pays value to local culture. As a MNC its possible to have cultural conflict among management and employee. Because most of the management people is local and they got respect towards the culture its not affecting the organization. Beside this some times management offer vacations for the employees in many cultural occasion.
Erricson has a fair recruiting and selection policy:
Erricson has both internal and external recruitment policy. Its totally depend on the post, availability and urgency of the job. For the external factor they give add to the print media, and in the internet. They try to ensure fair recruiting policy, as like skill and knowledge of the candidate. So far there are very few objections against their stuffing policy.
Maintaining laws and regulations of Bangladesh:
Though erricson is Swedish company it maintains all local laws and regulations. It follows Bangladeshi codes and conduct, for example: for taxation, limitation in different sector. Its get easy because except few people, most of the top management is from the Bangladesh.
Erricson follows Bangladeshi labor law:
Basically erricson is a multinational company but it follows Bangladeshi labor law guideline. In terms of compensation, labor hour, benefits, facilities, vacations and for other related things it follows local laws and regulations.
Erricson has a HR department:
Erricson has a full fledged HR department. So far coordination of this department is impressive. It done all required things that it should cover up. For example: job analysis, description, recruiting and selection and other important things done by this department.
Ericsson should develop their human resource policy and strategy of the Bangladesh part in line with the corporate policy and strategy which will focus on the ultimate goal and objective of the corporation as whole.
In addition to this, they should focus on developing both types on market and their demands and in doing so they must create the demand for adopting the new technology among their consumers and as well maintaining the existing technology to remain competitive in the market.
Ericsson is a very big company with lots of employees worldwide and they have to deal with various kinds of stakeholder around the world. And this is making things difficult for them to maintain a same standard for all them and also keep them satisfied. As their operations gets diversified across the world their workforce also gets filled up with plenty of different kinds of people and this situation put them in tremendous challenge to cope up with all of their human resource and make the corporate goal accomplished. And without this they cannot be able to sustain in long run and remain successful all around the world. Ericsson is a technology based company and to be more specific they are telecommunication technology based company. And the rapid expansion of this sector is affecting their performance and also the need of frequent change in the technology. The telecommunication is quite new and as the latest and developed technologies are coming it is making the business environment tough for the companies and making them to adapt the newest technology in order to remain competitive in the industry.
In addition to these their corporate culture also needs to be well developed and needs to remain unique so that they can successfully maintain the corporate objective and the Ericsson’s own culture. And unless otherwise they can maintain this corporate culture they will not be able to keep their overseas operation integrated around the world, so this is also important to keep up the same standard of performance across the world. Another aspect of this industry is that the diversity of this sector is huge and this is making the companies like Ericsson to continue their older version of the product to the undeveloped and developing nations like Bangladesh. As these countries are not that much advanced and they are not capable enough to carry the latest technology but at the same time these countries have their own demand for the technological advancement and these markets are also very attractive so no company can under estimate these market.
Human capital is the ultimate forces that are responsible for the success of the company and also even for the failure of the company. And as for the multi national corporations it the most vital part that they build and maintain as well the inside environment in such a way that ensures that the same high standard is followed all over the overseas operations around the world. This is the vital part that the multi national organizations as they have to maintain the organizational policy and procedure all over the world.
The difference among different country’s culture affects a lot in maintaining the same level of standards across the world wide operations and to deal with these any multi national organization needs a solid base for the human resource department so that they can build the same working environment across the countries of the world and they can maintain the performance level of the organizations. Ericsson and similar other companies will face more trouble when these less developed countries which are operating with the older technology and needs to get upgraded and cannot upgrade the full equipments due to the cost factors. The challenge here is that there are some other brands which are very much capable of providing the same technological product but at lower cost than Ericsson. And the problem occurs when they have to face the competition from both side and have to maintain both sides. In doing the business activities across the world Ericsson should deal these problems by giving them special attention and they should try to look for the expansion of their business around the globe while in the relative in advanced countries they should try to create the demand for the latest product innovation and adapting the newest technological innovations. To do this they should not depend only the demand of their customers to get the order for their products, rather they should motivate their customers to adopt the newer technology and hence they should promote the existing products to the newer and underdeveloped segments of the world community.
In order to deal these situations and maintaining the same level of standards worldwide it is the job of the corporate heads to ensue that the human resource policy and strategy is in line with the corporation’s overall policy and the strategy. And the regional branches, which are mostly operating in various different countries around the world it is their responsibility to review and understand the corporate policies and objectives and consequently come up with such policies and objectives for the human resource department so that they can maintain their human capital in the countries they are operating and of course they must align their human resource policy with the large corporate strategies and objectives. This is very important for getting the operations and business activities going as per the corporation’s interest and to achieve the goal of the corporation.
This approach of aligning the human resource strategies and policies according to the corporation’s strategies and objectives is the best possible way for any multi national corporation because this only ensures that the local branches are not a separate entity to operate and there are the same types of interest among the business units and the corporation itself as a whole. The job of the human resource department is very challenging as they have to build a system which will satisfy both the party the employees and the mother organization. As Ericsson is a huge company worldwide with huge numbers of workforce it has to be their ultimate objective that they develop their local human resource strategies and policies in alignment with their corporation’s strategy and policies so that they can keep the unique culture of Ericsson around the world and thus the each and every unit of them work for the interest of their corporation and also get the maximum level of satisfaction from the local workforce and appreciation from the mother corporation. This very effective and efficient approach to deal with the industry they are operating in, because unless they can deal successfully with these factors efficiently they cannot get the ultimate success in this industry.
Implementation 01: Execution of developing human resource policy and strategy:
Human resource strategies should not be confused with human resource or personnel policies. Human resource strategies are typically a series of policies and programs (such as change programs) designed to achieve a people management objective. Similarly, there are sometimes express ‘human resource philosophies’ — these are usually value statements which set out the corporate values towards the employees, including minimum standards, and the over all vision for managing people.
All management is about decision-making in an environment of risk and uncertainty. Effective management aims to reduce the risk and uncertainty as far as this is possible in an imperfect world by the acquisition of the best available information and the use of a system.
Human resource planning is an expression of this philosophical the most important area of all, the effective employment of people. Whatever skepticism may remain, there are strong indications that the impetus that human resource planning has now acquired will become increasingly evident in managerial practice. The changes and pressures brought about by economic, technological and social factors compel organizations of all kinds to study the costs and human aspects of employee much more seriously and carefully than ever before. For the same reason, it is a subject to which central government will continue to attach great importance and in which it will, of necessity, play a major influential role.
The effectiveness of the plan will depend on how soundly the organization has considered and planned its corporate strategy and integrated the objectives of its component departments. Once these fundamental details have been thoroughly examined and decided, the senior directing staff of the organization can consider the implications in terms of human resources.
Because of the constantly changing environment in which all work organizations operate, whether they market a product or provide a service, the corporate strategy and objectives will necessarily require continuous monitoring and revision from time to time. This will entail a corresponding, regular review of the system.
Strategic planning requires the planners to assess the national/international political, economic, social and technological trends), and to look at how their own organization is responding. The planners will also wish to assess the likely challenges and opportunities available — perhaps through using a ‘SWOT’ analysis — looking at the ‘strengths’, ‘weaknesses’, ‘opportunities’ and ‘threats’ to the organization. Strengths and weaknesses are usually internal, whilst threats and opportunities are external.
Human resources department is responsible for developing human resource policies
Where ever is needed. That is it could be at any level of the organization. The point is that the need for human resource strategy is to be identified and justified by the human resources department.
Developing human resource policies is an important factor for Ericsson. Recently this company has been localized. Thus to be efficient and it cope up with the current environment, the human resource department has to implement this as soon as possible.
Human resource department should enhance the communication with the other functional area of the company in Bangladesh and they should try to develop the individual relationship with the employees and with the top management of the departments to understand and develop policy for each functional area regularly.
Human resource department is responsible for the functioning of the workforce of any organization. And now days as the society and culture are changing the role of human resource department is becoming more and more vital for the effectiveness and the efficiency of the organizations. As for the multi national corporations the role is event more sensitive as they have to manage a diversified workforce across the world under the same umbrella of the organization.
And their role become more vital as they have to deal with the different functional areas of the company and in different countries to make sure that the each and every part of the organization is working well as per the overall value of the corporation.
To understand and cope up with the various types of needs of the departments they need to consider their each and every aspect of doing everyday operations. And unless other wise they communicate well with the individual departments they cannot get the situations in those functional areas as the demands and other situations will be completely different from one department to another departments.
They also must consider the personal level satisfaction of the employees and they should take into account that these individual employees are the one who are forming the entire organizations. So unless otherwise they are satisfied with the organization the organization as a whole cannot perform up to the mark. So it deserves the equal attention as the department does and they are the ultimate party upon whom the performance of the corporation depends.
Human resource department’s responsibility is to ensure that the department and the individual level employees are benefited and they are both satisfied by communicating them and getting the true picture of the situation in every regional branches of Ericsson. And they can only enhance this by communicating with the departments and as well at the individual level.
Implementation of developing communication:
Communication is a key success to enhance business aspects. As they are emphasizing more on the communication process so it is better to have a formal communication policy for their company. The company’s top management has to ensure that all level’s employees are communicating in effective way as soon as possible. The communication process should include top down as well as bottom up process. Employee participation will give them feeling of being valued and trusted members of the organization. To increase communication among the organization, employee participation is must. The HR team has to work with the employees to build morale and to win their commitment o new schedule. To create employee involvement and participation, Ericsson has to do following aspects-
- Educate all employees regarding business plans. The company has to explain that their increased participation in these plans will require major changes in the employees’ roles and responsibilities.
- Devote enough time, planning and resources to the transition and to employee involvement, especially to building the necessary HR systems.
- Involve employees in designing and implementing new operating systems.
- Provide training in new technologies
- Promote employees continues communication with engineers.
Human resources department is responsible for increasing communication process in the organization.
Speeding up communication process has to start as soon as possible. Without his process, the company cannot move to forward path.
They can form some strategic alliance with some other companies to operate more efficiently and effectively in the Bangladesh’s market as their competitors are also forming this type of alliances and becoming stronger in Bangladesh’s market.
In this world every country is different in almost every aspect from any other nations. In this string each and every country in different in doing business for any business organizations. And as for the multi national organizations it is their challenge that they operate in several regions in different form and get the success from different countries. And to adopt the local tradition and customize their business activities are very important in terms of getting the maximum out from the specific countries.
In Bangladesh it is the trends that we try to form some alliance and then start competing in the market and as for the business activities it is also important that they compete in such a way to enhance the effectiveness of the business organizations. Here in this industry also there are some companies who have formed alliance and operating as a single company as Nokia and Siemens has formed strategic alliance and they are operating as a single company rather than as competitors.
Ericsson should form these types of alliance or join any other alliance and operate in this country as this strategy will obviously remove the competitions up to certain level. And the overall industry may be very big in terms of numbers and diversity of the area where they can get their product sold and operate but the number of buyer are not that much comparing to this which will get their product.
This is of course a better strategy as this ensures less amount of competitions in the market and hence they can share the technology and improve the quality of their product so that their product get more capable to communicate with the other brands product.
Execution of forming strategic alliance:
In 1st January2007, Ericsson became localized company from Branch Company of Sweden. Thus to penetrate in Bangladeshi market, spread the risk and cost of production and development as well as to win over markets to certain operating standards, Ericsson should do Strategic international alliance with any Bangladeshi company. It is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective. Ericsson has to emphasize on a systematic approach to forming them. Following the steps leads to successful, high performance strategic alliance. A key activity in all the steps outlined in the chart is negotiation.
Building Strategic Alliances:
Primary Relationship Activity
Typical Actions, Interactions, Activities
Key Relationship Skills
Primary Relationship Activity
Typical Actions, Activities, Interactions
Key Relationship Skill
|Growing with another|
Source: Adapted from Robert E. Spekman Lynn A. Isabella, with Thomas C. MacAvoy, Alliance Competence (New York: Wiley 2000) p.81 Copyright@ 2000
Human resources department is responsible for maintaining all the steps to build effective strategic alliance.
It is justified that to organize strategic alliance process after their human resource department is fully structured. They have to cooperate with other firm as soon as possible.
Evaluate the performance of the employees after they get the training and thus to get the performance evaluation of the employees in order to understand the improvement of the employees’ previous performance.
The success of the training program and the performance of the employees depend on the evaluation of those employees when they come back to work after getting the training program. This is also very important as they come back and they need to show the improvement of their previous performance and to measure the necessity and the essentiality of the training program.
For any business organizations in this world it is one of their regular activities that they provide training to their employees so that the employee can perform better and from the employees’ perspective to develop further and get a better goal it is the ultimate choice of them to get those training program and make themselves more competence.
From the organizational and the personal point of view it is important that the performance of the employees gets some formal structured evaluation process. It is important from the organizational point of view that they can identify the positive aspect of the training program and they can judge the necessity of the training program so that in future when they need any more training program they can easily choose from different level of the employees. This is also necessary to compare between two individual employees who gets the similar training program and being more capable to make the training into performance. And as for the employees perspective it is necessary that the trainee after completing the training program can judge themselves where they stands and where they can go in future. It will also help the individual to recognize the necessity of the training so that they can understand the necessity of the types of training in future for further development.
This training program evaluation is more vital and of course important as this is the only tool through which the organization can actually verify the performance of the individual employees and by keeping the track record can easily get the future need for training.
Execution of evaluating trainees’ and employees effort:
After trainees complete their training, Ericsson do not evaluates the program structurally to see how well its goal have been met and whether this is the best method for reaching the goals. It means they do not follow up the trainees’ improvement stages. Here management does not follow a structured feature to assess the program’s successes or failures. As training can produce fundamental changes in the way organization perform, Ericsson has to follow and evaluate training programs to validate the training and development process. In gauging the effectiveness of a training program, there are four categories of outcome s that the company can measure.
Designing the study:
They should use controlled experimentation in their evaluation process. Controlled experimentation is the evaluation process of choice. They should establish data source on both before and after the group is exposed to training and before and after a corresponding work period in a certain group. This make it possible to determine the extent to which any change in performance in the training group resulted from the training rather than from some organizational change like raise in pay that would have affected employees in equity.
Training effects to measure:
Ericsson can measure four basic categories of training outcomes.
1) Reaction– the company has to evaluate trainees’ reactions to the program. They have to find following answer to the questions.
v Did they like the program?
v Did they think it worthwhile?
2) Learning- the company has to test the trainees to determine whether they learned the principles, skills and facts they were supposed to learn.
3) Behavior– the company has to ask whether the trainees’ on the job behavior changed because of the training program. It is more important when the company give certain train training- customer service training.
4) Results- reaction, learning and behavior is important but if the program does not produce results, then it probably has not achieved its goals. It means that the problem could not be solved by training in the first place.
Integrate 360 Degree Feedback:
v The company can introduce an internet based 360 degree feedback system which will produce the information needed for coaching and individual development plans. Here rating will be collected from following persons to make evaluation process effective.
- Internal or external customers
v It will be much faster than the typical paper and pencil evaluation. The company can put the whole process on the net. They can allows peers, customers, team mates, supervisors, direct subordinates to appraise managers .All information will be encrypted as well as password will ensure that only authorized person will have access to the actual evaluation. Computerized system then complies all these feedback into individualized reports that HR person with the rates. The rates are often the only ones who get these completed reports. Then they will meet with their own supervisors and sometime with their subordinates and share the information they feel is pertinent for the purpose of developing plan.
To develop a legally valid appraisal process Ericsson has to impose following steps-
- Ericsson has to conduct job analysis to establish the criteria and standards, such as timely project completion. They have to specify “successful performance”. Besides this, they have to incorporate these criteria and standards into a rating instrument (BARS, graphic rating scale and so on).
- The management has to clearly defined job performance dimensions (like quantity or quality) rather than undefined measures of job performance.
- They have to communicate performance standards to employees and to those rating them.
- They should use subjective supervisory ratings as only one component of the overall appraisal process.
- They should allow appraisers substantial daily contact with the employees they are evaluating.
- Ericsson should conduct all appraisals independently to cancel out individual error and biases
Human resources department is responsible for identifying effective evolution tools for the training program.
Where ever is needed. That is it could be at any level of the organization. The point is that the need for the training program is to be identified and justified by the human resources department. And it is also important to ensure that after the training the employees of that department will perform better than they are doing now.
The need of training and organizing a proper training can only be identified by the human resources department. So it is justified that to organize any training program after they have their any training program or performance based activities.
Develop and maintain liaison with the consumers, government, political parties and the society to become more locally responsive and hence getting more benefit from the local parties. In order to do so they should provide online services to their consumers in case of troubleshooting in after sales service. They should also setup a Human Resource Service Center (HRSC) which will be able to provide the support the employees and hence where can maintain the good relation and employee satisfaction through out the organizations.
Each and every business organization should look to develop the liaison with the government, political parties, consumers, and the society as a whole to get better adapted by the local political forces and hence can improve the performance of the organization in the context of the local community. In doing so any business has to select some tools and use those to keep the good relations with all these parties. Here is it to mention that the employees of the organizations is also very important so it is also very urgent that they are kept satisfied, because unless otherwise they are satisfied the organization, no matter how efficient they are in maintaining the outside relations the company will not be able to perform up to the mark.
Ericsson should develop an online customer service center to give support to their consumers. This is because all of their consumers are the telecommunication service provider. So, if they have any trouble in their product provided by the Ericsson their operational performance will be hampered definitely. So they need to be guided immediately and served as soon as possible. And successful implementation of this system can only ensure that these customers are getting the best value for them.
In maintaining the liaison with the government it is important as they are the supreme authority in any country and they have the power to tackle any kinds of situations in any of the business entity operating in side the territory of that particular government. So it is the most important that every business entity, specially the multi national corporations operating in a foreign country to develop a very good and understanding relation with the local government to get the benefit of the doing business in that particular locality. The political parties are the second vital force in any given country as they are the one in a democratic country to form the government so unless the relation with the political parties is solid it is not possible to have any good relation with the government. The society where the businesses are actually operating is responsible that the business organizations runs in smooth and trouble free manner. No business can actually sustain if they cannot the build a good relation with the local community, because these are the people who are actually affecting the day to day operations of each and every business organization so that the business organization is running well. And the most important group of people for any business entity is their employees as they are the one who actually run the business organizations and make the business effective and efficient. So they need to get the special facilities and caring so that they also give their best performance.
The role of human resource department here is that they deal with the people involved here who may be the insider or the outsider, as they are the one expert in handling the human issues in any business operations.
Implementation of developing and maintaining the good relation with the internal and external parties.
Establish a public relation department and employ and empower them so that they can deal with the external parties in a more effective and efficient way thus can develop and maintain liaison with the consumers, government, political parties and the society and get benefits from the local parties. They built information service department and provide online services to their consumers. They should also setup a Human Resource Service Center (HRSC) to provide the support to the employees and maintain the good relation and keep their employee satisfied throughout the organizations.
To establish a public relation department they need to hire the people from media background as well from the legal perspective. And these people need to be empowered well as they have to deal with the several different situations in the context. So they need to be empowered to take the decisions immediately. This will also be a mandatory as they will have to deal with the government and the political parties. In Bangladesh they business organization has to be real good in dealing the major political parties.
As for the customers the information system department will be the ultimate responsible to make sure that the customers are getting the service in the best possible way and in the quickest time period. This is a mandatory as their customers are the service provider and a slightest delay can destroy the entire company as they are dealing in highly competitive market and with lots of customers. And if Ericsson’s client suffers due to the negligence from their part then there is a huge possibility that they will not be doing business with them anymore.
Ericsson should build a human resource serve center. This is more like a customer care center and the only difference here is that instead of the customers this particular department will deal with the employees of the organizations.