The case deals with two major transformational organisational changes that take place within a span of 5 years in Marconi PLC. The first change process was under the leadership of Lord Simpson who took over this large diversified conglomerate in 1996 when the company was in a mature phase, already in decline. The company was under performing, had a rigid structure, lacked a clear vision and the employees had become change averse and complacent. To recharge the company Lord Simpson lead a change process with a clear vision with a growth oriented strategy, acquisition and a cultural change process for the employees. To motivate the employers to embrace the cultural change he introduced an attractive stock option plan.
The change process started producing results until the “Dot Com Bust” hit the industry like a “tsunami”. Like all other major players in the Industry Marconi plc faced a dramatic down turn and within a matter of few months the company was hit with a crisis for survival from the peaks that it scaled as a result of the change process introduced by Lord Simpson.
Lord Simpson and some of the key members of his team had to standown and Mark Parton took over the company in September 2001. His basic challenge was to introduce fresh transformational organisational changes to save the company and turn it around back to profitability. The case deals with the initial phase of this change process where in the strategy was to divest noncore activities to generate the immediate requirement of cash to reduce the debts and to restructure and downsize the company to reduce the losses. In resulting situation of high demoralization of employers, Mark Parton had to push forward the cultural changes introduced by Lord Simpson with suitable modifications needed to match the vastly changed challenges now facing the company.
In 1897 Marconi the famous inventor of wireless transmission, registered his company as Wireless Telegraph and Signal company. Then in 1900 the company was renamed to Marconi’s Wireless Telegraph Company Limited. In 1946 the English Electric Company acquired Marconi’s Wireless Telegraph Company. Then in 1968 General Electric Company merged with English Electric company where it became subsidiary to GEC.
LORD Weinstock ERA (1963 to 1996)
LORD Weinstock was appointed as the Managing Director of this company in 1963. The main strategies adopted by him were conservative acquisition and diversification. He expanded his business in the field of nuclear engineering, industrial appliances, telecommunications, power generation and transportation. Though the company grew in size, turnover and profitability during his tenure given his style of leadership, with centralized authority, a rigid structure, a risk averse culture the company started underperforming the market. This continued for 11 years out of 15 years between 1981 and 1996. Therefore in 1996 Lord Weinstock had to stand down. Though company...