Change Management in a Joint Venture

During the last years Ericsson Mobile Platforms (EMP) has seen increasing industry consolidation and that their position in the value chain was threatened. To avoid extinction from the market a merger was necessary to strengthen their position in the value chain, avoid margin stacking and reclaim the competitive edge needed for survival. A thorough analysis of the different players on the market showed that the most attractive partner was ST Microelectronics and their newly formed company ST‐NXP Wireless. The final setup for the new company is a 50/50 joint venture created by bringing together ST‐NXP Wireless and EMP. The deal was closed in early February 2009. During the time this thesis was written, a large part of the important integration work was undertaken with the agenda to make ST‐Ericsson into one unique entity with minimum dependencies to the parent companies. Merging two companies will inevitably kick off high and low organizational changes, culture changes and system changes. The focus in this thesis was on the change of ERP system, focusing on the purchasing system and processes. The purpose of the thesis was to drive and secure change success of the integration work during the spring and to analyze the work done in order to provide some lessons learned and insight for the future changes. The empirical data derives from the authors’ observations during their work. The observations are divided into two cases. The first case is about change management in change of purchasing system and the second case is about cross functional synchronization. The ultimate goal of change management is to minimize the negative impacts of change on business performance. During the spring the authors have identified the following attributes as keys for success: • Having a clear vision and goals that can be easily communicated in order to facilitate the understanding and acceptance of the change. • Provide the stakeholders with incentives, connected to the vision and goal, so that people feel motivated and committed. • Secure and allocate the right resources from the beginning when initiating the change project. iv • The people driving and participating should have or get the opportunity to get the proper skills that are needed for the change. • Last but not least, communication. The communication is the overall most necessary tool of change