Problem:

In order to keep up with the vast changes in the telecom industry, stay competitive and gain efficiency, Ericsson implemented a major re-organization in January 2007. The changes had large effects on the line-managers and their direct groups, proposing many critical issues regarding the implantation process and effects of the re-organization.

Purpose:

The purpose of this study was to carry out an analysis of how the implementation process of the re-organization at Ericsson was conducted. Also, how the outcomes of the new organizational design as well as the characteristics of the changes affected the line-managers.

Method:

Overall, a qualitative approach to research was chosen for this specific case-study. A total of 19 in-depth interviews were conducted with affected line-managers on four different locations and additional interviews with people in other positions were done in order to gain other perspectives of the changes. Issues of reliability, validity, objectivity and generalizability were approached in order to ensure an optimal methodology of this study.

Result:

The re-organization within Ericsson lead to a new focus in their matrix structure, moving from being product-based to competence-based. Generally, it was found that the changes were perceived differently in all four geographical sites but common for all is the confusion and mixed opinions regarding why the changes were conducted. Moreover, a strong corporate culture has lead to extremely high loyalty towards the organization.

Conclusion:

This study has led to many implications; theoretical, methodological and managerial. Some of the advice from the authors to Ericsson is to improve information and timing of change. Also, they must embrace and allow people to add input to the changes. Finally, the issue of knowledge transfer should be stressed in order to secure in-house competences.