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Research: Nokia Company

INTRODUCTION

Nokia Company is an international information technology, telecommunications, and consumer electronics Finnish corporation that was founded in eighteen sixty five. The main offices of Nokia are in Finland, which is a section of a much larger Helsinki metro region, but the firm was founded in Tampere’s Pirkanmaa district. In 2020, Nokia, a public limited corporation outlined on New York and Helsinki Stock Exchange, employed roughly ninety two thousand people in more than a hundred nations, had enterprises in more than a hundred and thirty nations, and generated annual incomes of approximately twenty three billion euros. Nokia has its shares traded on the New York and Helsinki Stock Exchanges. It is the four hundred and fifteenth biggest firm in the globe, with respect to the Fortune Global 500, having peaked at eighty fifth place in two thousand and nine. It is a stock market index that is part of the Euro Sox 50.

During the last one and a half century, the company has operated in a variety of industries. Its concentration has shifted to large-scale, technological research, telecommunications infrastructure and licensing since the 1990s. It began as a pulp factory and has a lengthy history of working with rubber and cables. Nokia made a significant contribution to the development of mobile phone technology such as GSM, 3G, and LTE. Nokia used to be the top universal vendor of both mobile and smart phones for a decade, beginning in nineteen ninety eight. Nokia, however, made a series of fatal managerial errors in the late 2000s, and its market share in mobile phones dropped.

Following a cooperation with Microsoft and the company’s succeeding market issues, Microsoft purchased Nokia’s mobile phone segment in twenty fourteen, renaming it Microsoft Mobile. Following the sale, Nokia changed its focus to telecommunications infrastructure and IoTs, as indicated by the sale of its here mapping unit and the purchase of Alcatel-Lucent, which includes its Bell Labs research facility. Following that, the business dabbled in digital health and virtual reality, which it acquired when it purchased Withings. A licensing treaty with HMD Global allowed Nokia to return to the smartphone and mobile market in twenty sixteen. Nokia proceeds to be a main patent licensor for the many of leading mobile phone producers. Nokia is the 3rd largest network equipment producer in the world as of 2018.

The corporation was regarded with national pride by Finns, as it was by far the largest brand and company from Finland in the world, thanks to its mobile phone industry. At its peak in 2000, throughout the telecoms bubble, Nokia accounted for four percent of the country’s Gross Domestic Product, 221 percent of overall exports, and seventy percent of the Helsinki Stock Exchange market capital.

PROBLEMS FACING THE COMPANY

At any one time, each organization faces a number of strategic hiccups. The variance between firms that fail and those that succeed is determined by how they tackle threats related to strategy. A research of the literature on Nokia’s strategic problems in the years leading up to Elop’s nomination as CEO exhibited 7 main problems. Flaws related to Strategic planning, competitive pressure, inadequate innovation management, low operational efficiency, and an unfit business culture were the seven problems.

  • Strategic Planning Weaknesses- There was a fundamental problem in Nokia’s strategic strategy. The corporation performed admirably in the initial years of the 21st It was leading enterprise in the market in some of market segments. The company’s strategy lapsed due to its achievement. The company failed to notice or counter when the customer’s needs started to change. This resulted in a loss of leadership and in all market sections. If the firm had kept a close eye on its strategic planning procedures, Samsung and Apple wouldn’t have been in any position to overthrow it. A lack of initiative resulted from a failure to recognize that customers were progressively more looking for Smartphone gadgets. The company’s strategic strategists should have predicted earlier these market developments.
  • Pressure from Competitors-Before the Android OS became famous, the Smartphone sector was open to competitors. With the iPhone series, Apple took a bet and established the leader in the market. Samsung hurriedly followed suit and began producing Android-based handsets. Nokia was caught unprepared, and competitors had already started to crumb into its market share by the time it grasped what had happened. Its Smartphone applications were built using the Symbian operating system, which proved to be useless. Nokia was unable to completely respond to Samsung and Apple’s efforts to dominate the Smartphone industry due to market pressure. Nokia didn’t recognize it at the time, but its ability to leverage resources within its business environment was critical to its Smartphone success. For their Smartphone devices, the other two competitors supported Android development of application. Nokia failed to establish a strong Symbian community, which limited the number of apps available to customers by means of their phones.
  • Ineffective Innovation Management- In addition, the business failed to manage innovation. The corporation was, according to all evidence, a global lead in mobile phone technology at the time. Therefore, the corporation has become unworried in developing new technology to suit demands of the consumer. The company, according to Elop, had strong parts of invention but lacked a cohesive plan for fulfilling its full potential. As a result, firms like Samsung and Apple, both known for their inventiveness, were able to defeat them. The Kano Model may help to understand why Nokia’s market share has shrunk. In summary, the Kano Model splits a product’s characteristics into 5 sections. First and foremost, the items must be appealing. This is a term that describes a company’s capacity to respond to unspoken and unanticipated client requirements, which usually results in customer delight. Customers’ displeasure is sincere by their absenteeism. Secondly, all products contain 1-D characteristics that result to happiness when present and displeasure when absent. Thirdly, some things have “must have” attributes. Such functions include the capacity to handle voice conversations and text messages in the mobile phone business. Customers have come to anticipate these features on all phones. Any effort on the part of a manufacturer to improve them does not equate to increased consumer fulfillment. The reverse and indifferent qualities are the 4th and 5th attributes, respectively. Indifferent qualities have petite effect on client satisfaction, but negative features intensifies unhappiness. Apple and Samsung outsmarted Nokia by improving the attraction ability of their goods based on this paradigm. While Nokia’s phones were adequate, Samsung’s and Apples were exceptional.
  • Inefficiency in the workplace operations- During the review, the company’s operational inefficiency resulted in a forfeiture of market share. Chinese manufacturers, according to Elop, were churning out phones faster than Nokia could polish a presentation via PowerPoint. This assertion is based on the perception that Nokia is slow to develop new products. It’s vital noting that Nokia is one of the world’s best-run businesses. The inefficiency in question, in terms of comparison. Nokia was not able to keep up with the competition in terms of product development phases.
  • Organizational Culture-The issues that led to market share loss were influenced by the Company’s corporate culture. When he wrote the Burning Platform Memo, Elop conceded that the corporation’s activities were slow to start with. Given his experience in the fast-paced software business, it’s understandable that he’s upset with Nokia’s slow pace of innovation and lack of response to competition pressure. Apple and Samsung were the two major companies that outperformed Nokia. These two organizations are well-known for their antagonistic innovation and quick business strategies. Nokia clearly required fresh ideas to deal with the problems that these two businesses were posing. Elop is also famous for being the first non-Finnish president of the corporation. This shows that the company failed to recruit universal talent, instead choosing Finnish inbred leaders to lead it. In a word, Elop joined a company that was operating efficiently, but in the wrong direction and at a snail’s speed in an industry which was quickly varying. The only practical choice he had was to instrument radical change so as to reduce the company’s product development cycle. Nokia’s single chance of rescuing market share is to pursue this tactic.

SOURCE OF THE PROBLEM

Implementation is viewed as a different from tactic construction and as a matter of adjusting organizational systems and structures (Galbraith, et al, 1994) this technique appears to be limited, and several fresh perspectives on this troubling issue have developed.

According to recent investigations into prospective study fields in the strategic management sector, there is a shortage of understanding on strategy execution, hence more research is needed in this critical area of strategic management. A number of academics have highlighted the lack of thorough implementation frameworks, there is a critical need for comprehensive and ample conceptual models of strategy execution.

Most importantly, there hasn’t always been a clear understanding of what strategy means in the first place. Second, much of the existing corporate governance research is based on a single theoretical perspective: agency theory. Scholars have of late, pointed out that the agency perspective’s unfair use in corporate governance research is ineffective for illumination or conceptualizing strategy of boards’ duties (Daily et al., 2003). Likewise, McNulty claimed that “agency theorists have said little about strategy as a technique of controlling managers.” In general, board participation in tactic has been described as a complicated, multifaceted organizational occurrence that can’t be effectively understood within a single theoretical paradigm (Feigner, 2005). Thirdly, scholars’ lack of access to nine strategic decision-making processes has clearly hampered their capability to create deeper intuitions in this field (McNulty & Pettigrew, 1996).

Till now, researchers have primarily relied on proxies rather than a direct evaluation of the board’s strategy role. Most research have inferred boards’ strategic engagement from antecedents or outcomes, rather than seeing actual board conduct (McNulty & Pettigrew, 1996). Less than one out of every 8 empirical board studies published are about definite board behavior. This flaw casts doubt on the validity of previous research on the board’s impact, for example, on innovation strategy (Deutsch et al., 2007) Of course, action research would be preferable from the standpoint of empirical research. However, only few analysts have the chance to watch board dynamics in real time like “fly on the wall” As a result, new approaches to investigating boards’ responsibilities in strategy are required.

DECISION MAKING BY THE MAIN PLAYERS IN NOKIA CORPORATION

Nokia is able to put its responsible business principles into reality at the local and community level thanks to stakeholder collaboration. Stakeholders have increased their demand on firms to actively impact issues regarding human rights in the workplace throughout the years.

On a regular basis, the board of directors, analyze Nokia’s strategic direction, management policies, and the efficacy with which they are implemented by management. Members of the Board of Directors are responsible for acting in good faith and with reasonable caution in order to exercise their business judgment in a manner that they reasonably and honestly believe is in the best interests of Nokia and its shareholders. Members of the Board must acquaint themselves of all relevant information reasonably available to them in order to fulfill that commitment. The Board of Directors and each Board Committee have the authority to hire independent legal, financial, and other consultants as needed. The Company will provide sufficient cash for the Board of Directors and each Committee to carry out their duties, as well as pay for their advisers’ services.

PROPOSED SOLUTIONS

SHORT TERM SOLUTION

Paying Attention to Stakeholders

Listening to stakeholders was the fourth part in Elop’s plan. Elop was known for being a great listener. Elop was able to bring together the perspectives of all Nokia stakeholders in order to fully comprehend the company’s condition. In interviews, Elop repeatedly stressed the need of listening to clients in order to understand what they want. He was also exceptional at listening to his staff, which is why he knew so much about Nokia’s capabilities. The choice to sell Nokia to Microsoft demonstrates his ability to listen to the Nokia Board of Directors, allowing him to lead the sale. A CEO’s capacity to interact with all stakeholders in order to hear their viewpoints is enormously rare. It’s a highly effective method for establishing new business links

Understanding the fluctuation of business environment

To understand how the competitive climate around nokia was changing, time was taken to redefine competition. On their Smartphone devices, all of their competitors were employing secondary software platforms. Furthermore, the applications contained in the phones were not created by the handset manufacturers. They were created by self-employed programmers who were working on commercial applications.

Counteracting the competition

Elop concluded that Nokia was not competing against any single device manufacturer after looking at the value chains employed by competitors in the creation of mobile phones. Rather, Nokia was competing against entire ecosystems that were made possible by competitors. By examining the Nokia business ecosystem, Elop went on to redefine competitiveness.

Adjustment to new technology

A conclusion is arrived that the company’s alternatives for competing successfully were as follows: To begin, the company may join an existing ecosystem, such as the one based on the Android operating system. The second alternative was to create a new ecosystem based on a Nokia-supported platform.

It could be decided that Nokia’s future platform should be Windows. The objective is to provide customers with an alternate ecosystem rather than a new gadget. The primary takeaway from this situation is that in order to compete effectively, it is critical to understand the whole business models of competitors.

LONG TERM SOLUTIONS

Putting Elop’s Strategy into Practice

After researching the situation at Nokia, Elop wrote the Burning Platform Memo, which demonstrated that he had taken the effort to undertake a SWOT analysis as well as a PESTLE analysis to better understand the firm and its competitive context. Elop compared Nokia’s position to that of someone standing on a burning platform in the Memo. The image of a burning platform conveyed both the danger of doing nothing to improve Nokia’s competitive position and the approaching necessity to act quickly. The following are Elop’s five primary strategic actions for bringing change to Nokia. First, he changed the way Nokia saw its competition in light of changing business conditions. Second, he ensured that firm employees understood who their competition were. Third, he instilled a sense of urgency in the company’s operations. Elop also paid attention to the expectations of the company’s stakeholders. Finally, he devised a clear response strategy to the competition.

Continuous training of employees

Nokia has for a long time been fruitful in answering to implementation of strategies. However, in order to remain competitive and profitable in the market, the company must continue to train its employees on how to implement the strategy, involve employees in decision-making, and use an effective communication system that provides strategy information to all stakeholders. The report also suggests that all personnel of the firm be involved in the strategy’s implementation.

Proper strategic planning

The task that strategy implementation performs in the corporation is to ensure that the actions shortlisted in the strategic plan are performed to the end. Early involvement of firm members in the strategy implementation process helped members comprehend superordinate aims, style, and cultural norms, and so became necessary for the business’s strategy implementation to continue to succeed. The firm uses strategy implementation frameworks that have particular constituents for each of the 6 strategy implementation duties.

Proper management and resource allocation

Managing and allocating enough resources, instituting a chain of command or some other configuration, allocating responsibility for particular activities or procedures to particular individuals or groups, and monitoring results are some of the company’s practices. Political instability was the most significant issue confronting any plan implementation process among the unexpected challenges that arose during the procedure. Numerous conflicting priorities, promotion, and well-versed clients are some of the competing practices that produce disturbances that prevent implementation of the strategy.

EFFECT OF THE SOLUTIONS ON STAKEHOLDERS

One of the solutions suggested is working with the stakeholders including listening tom theirs views and ideas. Nevertheless this comes with challenges including

Resources and training

Absence of sufficient resources and training sessions, in addition to the more required and necessary time, can limit the advantages of participation of customers and stakeholders. Most investigators are uncertain how to necessarily engage and employ stakeholders, and they lack the appropriate capabilities to handle such a process successfully. Furthermore, stakeholders with no scientific or clinical experience may require additional continuous assistance and training in order to contribute profoundly to the practice.

Identifying appropriate individuals

Recognizing and inviting participants to engage in the evaluation is not an exact science, and determining who to include can be tough. Furthermore, because the US Office of Administration and Budget Paperwork Minimization Act regulations limit the number of partners who can be engaged in a particular study undertaken for the federal government, the judgment of who to include in those situations carries extra weight. Making a mistake could lessen or eliminate the value of the engagement.

SOLUTION CHOSEN

Members of the firm should be involved in the plan early on. Members gained a better understanding of the goals, style, and culture of their superiors during the implementation process. As a result, maintaining the success of a firm’s plan implementation has become critical. The firm employs strategy implementation frameworks that include specific components such as each of the 6 tasks for putting the approach into action.

Managing and Allocating necessary resources, establishing a chain of command, allocating responsibility for specific activities or procedures to particular individuals or groups, and monitoring results are among the company’s strategy implementation techniques. Political instability was the most crucial difficulty tackling any implementation process among the unexpected challenges that arose during strategy execution. Numerous competing priorities, commercial advertisements, and well-versed clients are some of the competing activities that produce diversions and obstruct strategy implementation.

Customers and employees were not totally satisfied with the strategy’s execution, according to the interviews, who reported issues such as, implementation delays, criticism strategy failure, and lack of cooperation. Meager communication and a lack of worker commitment and ownership to strategy implementation caused delays and resource waste.

Responding to the obstacles of strategy implementation is easier with strategic planning. Strategic analysis, determining action planning and strategic direction were among the formalities used to assure successful strategy implementation. A planning cycle helped management manage and plan ongoing projects up to a particular degree of complexity by bringing all components of planning together into a logical, unified process.

Hands-on planning, strategic measurement, staff motivation, continuous review, staff development and training, and the establishment of a strategic map (or causal business model) are some of the techniques used by Nokia to ensure successful strategy implementation. That the replies were extremely effective, as the majority of the problems encountered in prior years were eliminated.

CONCLUSION

The job of strategy implementation in an organization is to make sure that the activities outlined in the strategic plan are carried out to the end. Members of the firm should be involved in the plan early on. Members gained a better understanding of the goals, style, and culture of their superiors during the implementation process. As a result, maintaining the success of a firm’s plan implementation has become critical. The firm employs strategy implementation frameworks that include specific components such as each of the six tasks for putting the approach into action.

Allocating and managing necessary resources, establishing a chain of command or some other structure, allocating responsibility for specific activities or procedures to specific individuals or groups, and monitoring results are among the company’s strategy implementation techniques. Political instability was the most crucial difficulty facing any implementation process among the unexpected challenges that arose during strategy execution. Too many competing priorities, advertisement/promotion, and well-versed clients are some of the competing activities that produce diversions and obstruct strategy implementation.

Responding to the obstacles of strategy implementation is easier with strategic planning. Strategic analysis, determining strategic direction, and action planning were among the formalities used to assure successful strategy implementation. There was a planning cycle that brought all aspects of planning together into a coherent, unified process and assisted management in planning and managing ongoing projects up to a certain level of complexity. Participatory planning, staff motivation, strategic measurement, continuous evaluation, staff training and development, and the creation of a strategic map (or causal business model) were some of the strategies used by Nokia Company to ensure successful strategy implementation. That the solutions were quite effective, as most of the previous year’s challenges were eliminated.

REFERENCES

Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting strategic management. Springer.

Ansoff, H. I. (1991). Critique of Henry Mintzberg’s ‘the design school: reconsidering the basic premises of strategic management’. Strategic management journal12(6), 449-461.

Chakravarthy, B. S., & White, R. E. (2002). Strategy process: forming, implementing and changing strategies. Handbook of strategy and management, 182-205.

Kinyanjui, F. R. (2010). Nokia’s responses to challenges in strategy (Doctoral dissertation).

Hendry, K., & Kiel, G. C. (2004). The role of the board in firm strategy: Integrating agency and organisational control perspectives. Corporate Governance: An International Review12(4), 500-520.

Jones, G. R., & HILL, C. W. (1981). Strategic management theory: an integrated approach.

Fiegener, M. K. (2005). Determinants of board participation in the strategic decisions of small corporations. Entrepreneurship Theory and Practice29(5), 627-650.

Ravasi, D., & Zattoni, A. (2006). Exploring the political side of board involvement in strategy: A study of mixed‐ownership institutions. Journal of Management Studies43(8), 1671-1702.

Brauer, M., & Schmidt, S. L. (2008). Defining the strategic role of boards and measuring boards’ effectiveness in strategy implementation. Corporate Governance: The international journal of business in society.

 

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