Strategic-Design-Lens.pdf

SALIK AHMED

SAMEER HASSAN TAHSEEN KHAN

APPLICATION OF LENSES ON NOKIA COMPANY

Introduction

Nokia has a long history of successful change and innovation, adapting to shifts in

markets and technologies. From its humble beginning with one paper mill, the

company has participated in many sectors over time: cables, paper products, tires,

rubber boots, consumer and industrial electronics, plastics, chemicals,

telecommunications infrastructure and more. Most recently, Nokia has been best

known for its revolutionary wireless communication technologies, which have

connected billions of people through networks and mobile phones.

Nokia’s history dates back to 1865, when mining engineer Fredrik Idestam set up his

first wood pulp mill at the Tammerkoski Rapids in Southwestern Finland. A few years

later he opened a second mill on the banks of the Nokianvirta River, inspiring him to

name his company Nokia Ab in 1871.

In 1967, we took our current form as Nokia Corporation as a result of the merger of

Idestam’s Nokia AB, Finnish Rubber Works, a manufacturer of rubber boots, tires and

other rubber products founded in 1898, and Finnish Cable Works Ltd, a manufacturer

of telephone and power cables founded in 1912. The new Nokia Corporation had five

businesses: rubber, cable, forestry, electronics and power generation.

Nokia first entered the telecommunications equipment market in 1960 when an

electronics department was established at Finnish Cable Works to concentrate on the

production of radio-transmission equipment. Regulatory and technological reforms

have played a role in our success. Deregulation of the European telecommunications

industries since the late 1980s has stimulated competition and boosted customer

demand.

In 1982, we introduced the first fully-digital local telephone exchange in Europe, and,

in the same year, the world’s first car phone for the Nordic Mobile Telephone

analogue standard. The technological breakthrough of GSM, which made more

efficient use of frequencies and had greater capacity in addition to high-quality

sound, was followed by the European resolution in 1987 to adopt GSM as the

European digital standard by July 1, 1991. The first GSM call was made with a Nokia

phone over the Nokia-built network of a Finnish operator called Radiolinja in 1991,

and in the same year Nokia won contracts to supply GSM networks in other

European countries.

In the early 1990s, we made a strategic decision to make telecommunications our

core business, with the goal of establishing leadership in every major global market.

Basic industry and non-telecommunications operations—including paper, personal

computer, rubber, footwear, chemicals, power plant, cable, aluminum and television

businesses—were divested between 1989 and 1996. By 1998, Nokia was the world

leader in mobile phones, a position it enjoyed for more than a decade.

In 2006, Nokia, which had already been investing in its mapping capabilities for many

years, acquired Gate5, a mapping software specialist, and then in 2008 NAVTEQ, the

US-based maker of digital mapping and navigational software. Today, Nokia offers

leading location services through the HERE business and brand, launched in 2012.

In 2007, Nokia combined its telecoms infrastructure operations with those of

Siemens to form a joint venture named Nokia Siemens Networks. NSN has become a

leading global provider of telecommunications infrastructure, with a focus on

offering innovative mobile broadband technology and services.

In 2011, Nokia joined forces with Microsoft to strengthen its position in the highly

competitive smartphone market. Nokia adopted the Windows Phone operating

system for smart devices and through their strategic partnership Nokia and Microsoft

set about establishing an alternative ecosystem to rival iOS and Android. In 2011,

Nokia also started to make a number of changes to its operations and company

culture that would in the course of the next two years lead to shortened product

development times, improved product quality and better responsiveness to market

demand.

In 2013, Nokia moved to reinvent itself with two transformative transactions. The first

was the purchase of Siemens’ stake in NSN, which was nearing the end of a deep

restructuring and remarkable transformation. The second was the announcement of

the sale of substantially all of Nokia’s Devices & Services business to Microsoft. The

Microsoft transaction was originally announced on September 3, 2013 and was

completed on April 25, 2014.

Following the closing of the transaction, Nokia announced its new vision and

strategy, building on its three strong businesses; Nokia Networks, HERE, and Nokia

Technologies.

Strategic Grouping

Nokia organizational structure is on the basis of expertise/functions. Although it is very old

form of the organizations. But still it is very useful in Nokia. Because of the nature of the

product that Nokia has. As Nokia deals with technological devices so they needed deep

functional expertise as technology is changing all the time and competition is very tough in

mobile technology market. So to stay in competition in this kind of industry they needed

deep functional expertise which they get through functional grouping. As Nokia is a mobile

device company and their target customers are those with middle level income. They don’t

deal with premium products very much. To increase market share in the middle level

mobiles they are needed to lower their price because of increasing competition. For lower

prices they are needed lower cost which they get through this grouping by expertise or

functions. Because grouping by expertise provide them economies of scale. So this

ultimately help them to reduce their cost. So main reason behind Nokia success in today’s

world of competition is their grouping by expertise structure. And also each group in Nokia

has their own reward and control system. In Nokia the research and Innovation department

and after that Marketing department is highly recognized because Nokia’s success is totally

based on these two products.

Nokia organizational structure is headed by the Mr Risto Siilasmaa who is working in the

capacity of Chairman of Nokia Board of Directors and as interim CEO. Under CEO there are

many departments. First department on the basis of the expertise is “HERE”. HERE

department job is to bring together Nokia Mapping and location asset under one brand.

The technology of HERE is based on a cloud computing model, in which location data and

services are stored on remote servers so that users have access to it regardless of which

device they use. HERE captures location content such as road networks, buildings, parks and

traffic patterns. So in simple words we can say that they deal with software and job of this

department is gather data all around the world regarding roads, networks, building parks

etc. Member of this department are specialize in dealing with these software and they have

deep functional expertise regarding their jobs.

Second department of Nokia deals with Devices and Services. The "devices" unit is

responsible for developing and managing the portfolio of mobile devices, which are made

for all major consumer segments. The "services" unit is responsible for designing and

developing Internet services that enrich the experience people have with their mobile

devices and the web under this department there are many others sub departments or

units. These sub departments include department of design, smart devices, Operations,

Mobile Phones and of sales and marketing. So all these sub departments are working under

one head. It’s kind of new innovation from Nokia. By having Marketing and Sales units and

design and smart phones unit under one head. As the name suggest Design unit deals with

the physical design of the cell phones. Where as one unit deals with smart devices. Their job

is bring innovations in the field of smart phones. Operation unit job is to perform all

necessary operations. They are the one responsible for activity performed in organizations.

They also play role in the distribution and ensure day to day operations of the Nokia. Mobile

phones unit of Nokia deals with the mobiles other than smart phones or we can say they

with simple phones without android technology. Nokia’s simple mobile are its core

competencies and they were the major reason Nokia has leaded the market for such a long

time. Sales and marketing unit also fall under the category of the Devices and services. The

"markets" unit is responsible for managing supply chains, brand and marketing activities and

is responsible for delivering devices, services, and solutions to the consumers. Marketing

department is highly connected with the manufacturing departments. Now this really help

the Nokia in capturing market. By having close connection with the marketing and those

manufacturers such as mobile phone department and smart phone department Nokia over

comes the weak point of the grouping by expertise where there is not much very integration

among departments.

Other departments of Nokia Include Human Resource department who job is to hire best

competent people around the world. Nokia especially needed those people who are good in

technology innovation to stay in the market. Legal department deals with the all legal issues

of the Nokia. Corporate Developing units offers operational support to devices, services,

solutions, and markets ,and is also responsible for exploring corporate strategic and future

growth opportunities Nokia technology department develops and licenses innovations and

the Nokia brand Nokia technologies consists of an advanced development team. The

development is done in wide areas from imaging, sensing, wireless connectivity, power

management and advanced materials. Other areas are the expansion of IP licensing

program. Nokia technologies also provides public participation in its development through a

program Invent with Nokia.

In addition, there is the "Nokia-Siemens Network", which provides wireless and fixed

network infrastructure communications and networks service platforms, as well as

professional services to operators and service providers.

Strategic Linking

Formal Reporting Structures

There is hierarchy in the organizational structure of the Nokia. So this hierarchy also affect

their formal reporting structure. Information from lower level moves towards higher level.

To increase Integration Nokia has formed Units with in Departments. Nokia has merged its

Mobile Phones. Mobile Solutions and Marketing units under one head of Devices and

Services. It really helps to increase linking between these three important aspects of the

Nokia.

Integrator

Nokia also assign “Integrator Role” to some persons to increase coordination among

different groups. EVP of device and services plays the role of Integrator between design

units, smart devices units, Operations, Mobile phones and sales and marketing units. He has

the carrot and stick to perform the role of integrator. He is the one who evaluate the

performance of the all these units and rewards are given according to their performances.

Permanent Cross Units Groups

Nokia have a Nokia Group Leadership Team, which is responsible for managing the

operations of Nokia. The Chairman and the members of the Nokia Group Leadership Team

are appointed by the Board of Directors. Only the Chairman of the Nokia Group Leadership

Team, the President and CEO, can be a member of both the Board of Directors and the

Nokia Group Leadership Team. Members of this team include CEO and President of Nokia,

Chief Financial and Operating Officers, President of HERE, President of Nokia Technologies

etc.

Temporary Cross Units Groups

There are thousands of the teams working daily in Nokia. These teams include teams for

solving a particular problems, Global teams, Virtual teams etc. E.g. When Nokia initially

failed in the smart phones market as they fail to capture the customer attention. They had

cross functional teams from marketing and engineering department etc to turn their failure

into success and ultimately they come with the Nokia Lumia. Similarly they have global

teams who consist of people from different countries as Nokia operates in 150 countries to

know about their share values and to know what actually the customer of that particular

countries wants.

Information Technology

Through the use of advanced tools and applications supporting virtual teaming,

collaboration, and remote working, Nokia Networks provides more opportunities to create

your ideal work environment and facilitates the development of global work teams.

Combine these collaborative technologies with mobile email, instant messaging and other

communication solutions and you’ll experience a high degree of workplace flexibility

Alignment

Organizational Performance Measurement System

In Nokia, each EVP is responsible for his own department performance. Even with in

department they have Units and in each units their head is responsible for their

performance. When Nokia moves from Mobile Phone devices into smart phone category

their performance went down. They fail to capture market. They measured their

performance that how it has happened. The main reason for its failure was there was not

very much integration between Smart Phone department and marketing department.

Marketing department was unable to position Nokia as smart phone or premium brand in

the mind of customer where as Nokia smart phone department at that time fail to develop

any differentiated product. Nokia measure its performance and then they integrated these

units under one department for better coordination.

Individual Rewards and Incentives

Individual rewards and incentives are major tool to motivate the employees. Nokia is very

good in providing those rewards to employees. They don’t only provide rewards in

Monetary terms only but they also provide a lot of opportunities to employee for career

development .They offer a comprehensive occupational health and safety policy, life and

medical insurance benefits. Their retirement plans and programs are designed to encourage

employee participation and savings to meet long-term retirement objectives. In addition,

Nokia Networks has specifically developed a flexible work from home employment policy,

providing many employees the opportunity to work a few days from home each week based

on their tenure and job requirements.

Human Resource Development

Their Global Academy has training facilities in more than 40 countries, offering over 2,000

courses in nine languages. At Nokia Networks, They’ll give you the training you need to

meet the challenges of a dynamic industry. They’re committed to providing you with the

tools and materials that will help you develop your career and encourage your personal

development. Their annual Personal Development Plans allow managers to assess each

employee’s individual opportunity in personal and professional advancement. They’re

establishing programs to pinpoint employees with talent potential – and helping to prepare

them for future leadership and executive roles.

The political lens:

The organizations are normally considered as strategic designs to accomplish goals shared

by the members of organization, but at the same time they are also political systems.

Normally the organizational politics is considered to be a negative thing, where most of the

people, when ask refer it to be selfishness and dishonesty of others. However, the

importance of organizational politics cannot be negated as it is very important for the

people if they want to affect the decision making in the organizations.

Looking at the organization from political perspective, we are keen to analyse what are the

interests and powers of the people in the organization. Interests are what people want to

achieve, and what they think is going to affect their interests. On the other hand power

refers to the ability of the people to affect or influence the behaviours of the other people

and also their ability to support or oppose a decision in the organization.

Interests:

It is obvious that everyone works for his or her own interest. Therefore, it is beyond doubt

that anybody will work in a manner where they are not benefitted in any way. Yes in the

organization as well people work for their personal interest. May be for the money,

authority, or status. In Nokia also, people also work for the same, some go for positions that

offer greater monetary benefits, some go for positions where they can have greater

authority by controlling the resources and some like to be attached with higher

management so that they can have influence over the other members of the organizations.

Just as individual the organization has its fair share of collective interest groupings. The

major groups are formed on the basis of the nature of the work. Mostly there are interest

groups on the basis of profession. Technical department have made their own interest

groups. Supply departments workers also have their interest groups. Similarly in those areas

where manufacturing is being carried out, groups can also be seen on the basis of division

between labour and managerial positions. In these areas, workers also belong to different

labour unions, which means that these labours are connected with external stakeholders. So

organization also keeps in view that how its decisions will affect these interest groups.

Power:

Power refers to the ability of the people to influence or affect the decision making in the

organization in order to gain their interests. There are three variants of power namely

authority, influence and coercion. As far as Nokia is concern, as there is formal hierarchical

system in the organization so power also lies with these formal position. We may refer it as

“authority” is definitely present in Nokia. As there are several EVP’s in the company, so each

EVP is having certain powers regarding decision making. As far as the second variant

“influence” is concerned in Nokia, departments e.g. their technical and supply departments

on the basis of their skills and performance have their influence in the overall decision

making. Their technical department is concerned with pushing devices in the market, so

they have their say in overall decision making. Considering their supply department in

Pakistan, it has worked quite efficiently in taking the products in the market at a lower cost.

So in Pakistan, supply department is considered to be very influential.

As far as the third variant of power “coercion” is concerned, it was not evident in the

company. Coercion is only evident in the organization when the authority is used in the

organization in an illegitimate way. One reason that this coercion was not that evident in

the organization may be that people are not too vocal about the excessive use of power

about their bosses.

Sources of Power:

Sources of power include personal characteristics, scarce and valued expertise, past

performance, formal positions and informal networks in the organization. We will look at

the implications of these sources in Nokia.

Personal characteristics:

Personal characteristics are most often linked with the charismatic personalities in the

organization. As far as “Nokia” is concerned, in the global perspective, their CEO Mr. Risto

Siilasmaa is considered to be an iconic personality. He leads his team in an organized way

and also he is considered to be leader among his team members. In Pakistan, Adnan Asif is

the country manager and he is considered as very iconic among employees. Adnan Asif is

considered as a powerful person because he has sensitivity to understand the interests of

others in the organization. He also adapts his behaviour in the different contexts. His energy

to take initiative is also commendable for employees.

Scarce and Valued Experience:

Technical department in “Nokia” is responsible for bringing new products and devices in the

market. This department is considered to be most important as it makes research about

needs of customers and then brings products in the market accordingly. So this department

is considered to be very powerful in terms of dictating their terms. This department

certainly influences major decisions in the organization. From the Pakistan’s perspective

their marketing (supply) department influences as they are very skilled in conducting their

job and catering the marketing needs.

Past Performance/ Track Record:

On the basis of past performance, in Pakistan their sales department is considered to be

very important in term of their success. They are considered to be major contributors

towards the revenue generation of the organization. Keeping in view their performances,

they have an influence in major decisions in the organization.

Formal Positions:

As discussed earlier, formal hierarchies do exist in Nokia, whether internationally or in

Pakistan. So we can consider that people do have authorities conferred by their positions in

organization. As we have discussed that the hierarchy is on the basis of expertise so people

who are at the top of functional departments normally exercise their powers on the basis of

their positions. They are normally those people who are involved in the decision making.

Other employees who are working in these functional departments are led by these

department heads due to their formal authorities. These department heads enjoy this

power due to their control over resource allocation, information flows, task assignments

and performance evaluations.

Informal Network Positions:

As we know that “know- who” is equally important as “know- how”. Informal networks are

also important source of power in the organizations. In Nokia mostly informal networks

consist of task related groups where people are combined together on the basis of their job

interdependencies. They are combined together and they share and control the important

information flows, which is most important asset of an organization.

Apart from these task related groups there are also friendship groups in the organization

where people normally have similar hobbies and interests. People having same hobbies and

interest become member of same informal groups. They get important information from

each other which is an important source of exercising power.

CULTURAL ANALYSIS

The culture is the integral part of an organization. To analyse the organization we study the

artefacts, the symbols the values and mission vision known by the employees and people.

The values and behaviours that contribute to the unique social

and psychological environment of an organization. Organizational culture includes

an organization's expectations, experiences, philosophy, and values that hold it together,

and is expressed in its self-image, inner workings, interactions with the outside world, and

future expectations.

Organizational Culture of Nokia

Nokia is well known for its strategic and competitive advantage through its corporate

culture, the physical facilities of companies are explained through its phrase “Connecting

people” which directs its workers to the motive of working together towards same goal, and

because of this phrase it holds strong corporate image.

The corporate philosophy of Nokia includes for main values and principles:

Customer satisfaction

Respect for individuals

Achievement

Continuous learning

Nokia believes in traditional importance of these values and put great emphasis in

maintaining these values and principles , it creates an environment where these values are

properly conveyed to its employees and also its employees takes these values and principles

seriously .

It was a great challenge for Nokia to make different and unique culture that represents the

corporate values, culture and vision of company for that Nokia adapted Scandinavian

culture but sooner it was felt that this technique was not enough for the organization and it

does not meet the very requirements of modern organization for that Nokia made a mixture

of Scandinavian plus new England’s culture as well where every employee has an equal right

and they all are valued properly.

Corporate Culture Manifesto – The Nokia Way

The Nokia way explains the importance of flexibility and speed, it makes the corporation

distinct from another, and the networked structure helps it to impose the practicality of its

manifesto, of course it is not as simple as it looks because the size of the organization is very

large and due to that there are many interjections imposed by bureaucracy, which is

normally the top most management of the company

The official business language of Nokia is English, routine life transactions, meeting,

seminars and corporate dealing are performed in English furthermore it is preferred to

speak in English in even countries like China, Japan, Pakistan and India. However Asian

countries like Pakistan and India uses there national language but transactions and mails are

made in English which is the central language of organization.

Artifacts

Artifacts are symbols of culture in the physical and social work environment. For Nokia there

are high-tech and traditional furniture showcases along with brilliant lighting design

particularly in the lobby area, cafeteria and meeting rooms helps creating a warm and

professional atmosphere. Another important design characteristic is its new office space

system and flexible desks.

This outlet is not restricted to any one of the countries where Nokia is working but when it is

changed in headquarter the entire Nokia gets the same changes in respective countries

however the official theme is blue and white but for other projects like Nokia Siemens

Network the theme is Orange and White.

Espoused values

Nokia communicates its espoused values through videos, its intranet, and in its

communications on company strategy, so employees do what they say they do because

values are properly conveyed and each of the employee value it. When it they say that they

value customer they also enact on it, rather they put great emphasize on customer value

and to satisfy them.

Symbol

Nokia has very dominant and self-explanatory symbol, as shown in figure Nokia symbols

represents Shaking hands along with a tag line “connecting People” which is conveying the

complete message. Also it is reflecting that people will be completely connected if the use

products of Nokia which promises them the reliability and durability of products.

NOKIA SLOGAN AND RING TONE

The "Special" tone available to users of Nokia phones when receiving SMS (text messages) is

actually Morse code for "SMS". Similarly, the "Ascending" SMS tones Morse code for”

Connecting People," Nokia's slogan. The ringtone "NokiaTune" (probably the world's most

well-known ringtone) is actually based on a19th-century guitar work named "Gran Val’s" by

Spanish musician Francisco Tarrega. The Nokia Tune was originally named "Gran Val’s" on

Nokia phones

Culture and Control

Nokia Company has predefined set of rules, there is formal hierarchy each department has

its own supervisor who supervises its member and gives them tasks and goals to achieve,

members work together in order to meet the task however it is not that simple. Like

traditional organizations Nokia also believes in exchange theory, to get the work done

supervisors or line managers are given three categories of evaluation which are as follows:

Outstanding

Valued

Needs improvement

Any employee who is given task is evaluated in either of three categories, an employee who

is categorized in needs improvement category will be given a warning, another person who

is given a valued is considered a normal employee who has just achieved the task and a

person who has achieved and outstanding is considered a star of that particular unit

because of achieving more than a task.

Exchange theory prevails in Nokia in a way that anybody who has achieved outstanding

performance will be given a latest device or gadget that has been produced by Nokia, for

that employees work harder for incentive based tasks, in addition any employee who

consistently get outstanding performance category for three time in a row will get either

promotion or monetary incentive plus latest device of Nokia, that’s how managers and

supervisors motivate their team members to work hard.

Clan Culture

An organization is said to have a clan culture when it has a strong internal focus along with

a high degree of flexibility and discretion. A company that fits the clan culture is the Finnish

conglomerate, Nokia, best known for its cellular phones. At this company, the well-being of

employees is a top priority. In contrast to the attention-grabbing element of most high-tech

firms, Nokia’s emphasis is on collegiality. As the firm’s former CEO Jorna Ollila put it, “We

don’t snap our suspenders.”

Subculture and Segmentation

As we all know that Nokia is a multinational company, it is working in more than a country,

despite its tremendous size it does not come free from the issue of culture and subculture

and segmentation. With its wide business Nokia tries to maintain same culture throughout

the organization working in different countries but despite its utmost effort there still lies

and exists culture within the culture in different countries, employees have different

behaviors and different value which they bring from their cultural background and

managers find it little challenging to make their employees work in such organizational

environment where there exists subculture.

For example, employees working at Nokia India come from diversified background and have

different believes and values, group of person coming from same background may form

specific group and share their own language and spend time together in cafeteria which is

exactly happening in regional HQ Gurgaon, Haryana. Employees from same background

have formed groups and they require holiday on weekday because they have to perform

religious duties together, which of course is a barrier to output of their performance.

To handle such situation and subculture in an organization managers of the same branch

have made a solution to a problem they now give off on the day the employees wants and

asked them to work on weekends to complete their pending tasks, which has not only

brought the output up to the mark but also has increased in efficiency.