PROJECT OF CHANGE MANAGEMENT ON NOKIA

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SUBMITTED BY: Muhammad Habibullah Khan ROLL No: F-07-026 SUBMITTED TO: SIR ZEESHAN HAIDER SEMESTER: 5TH “A” GOVERNMENT POST GRADUATE COLLEGE OF MANAGEMENT SCIENCES ABBOTTABAD
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Dedication
These efforts are dedicated to My parents, My teacher Sir Zeeshan Haider
Whose kind co-operation, blessings, help, and inspirations gave Impetus to complete this work and also my friends.

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Acknowledgement:
It is always said that we need “two hands to clap” and it proved exactly the same. One hand was ours and other was provided by none other than Sir. Zeeshan Haider who served us as a mentor and also lifted our moral up in the whole process. He took pain and helped us in overcoming the hurdles of our path. Along with sir we would like to give our special thanks to individuals who devoted their precious time on our live project and helped us by filling the questionnaire. In short words this project is one among those which will live in our hearts, as the
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project made us come across various facts of life and may be time will also fail in diluting it from us as all together.

Preface
In this era, where the technology is growing in a very faster speed and every positive change is bringing new and enhanced features with them, the cellular phones are at the very hot issue in this growing technology. The technologies in these cellular/mobile phones are enhancing and developing day by day, including new features of entertainment, and multiple options like imaging facilities, movie/animation features, sound technologies etc.

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When the technology is the matter, every consumer/user prefers the latest, best and interacting featured technologies and also prefers these facilities in less cost. So, in this view, there is a very big and fast competition between many companies/manufacturers of cellular phones at the world level. So I have choose the nokia for my change management project.

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Executive Summary:
For this project, we have chosen the company NOKIA. Nokia is a mobile telecommunications company, and offers far more than just mobile phones for everyday use. They offer networking solutions for businesses that help businesses stay connected and communicate with each other at all times and places. For them, Nokia also offers special mobile phones with exquisite and unique functions and options. In this project, we will first talk about what Nokia is and what they do. We will talk about their history, and how they came to where they are today. Vision, goals, and their strategy are discussed, as well as their wide variety of products and services offered for the regular consumer, businesses, and service providers. Nokia’s success benefits were some advantages they had in the market. These also include the advance technology and features, as well as services they offer to their consumers. However, like most other companies, Nokia has some weaknesses, but we consider these to be very minimal, and almost only come down to their competition. Lastly, we will talk about their informational business model. This model includes Nokia’s work organization, control system, industrial relations, human resources, business strategy, and finally, enterprise organization. We will look closely at and discuss all of these elements, and why we think that they are relevant to Nokia. Nokia has recently undergone a major organizational restructure. As a result of this restructuring, Nokia has revised it goal, mission and strategy into clear and specific objectives. On Nokia’s website they state, “Our goal is to be a good corporate citizen wherever we operate, as a responsible and contributing member of society. We take part in long-term projects aimed at helping young people create their own place in the world, for example through our global youth programs.” They hope to fulfill their goal by following their mission statement that is, “By connecting people, we help fulfill a fundamental human need for social connections and contact. Nokia builds bridges between people – both when they are far apart and face-to-face and also bridges the gap between people and the information they need.” Nokia plans to achieve its goal and

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pursue its mission by implementing its strategy of, “Expand mobile voice, drive consumer multimedia and bring extended mobility to enterprises.” There are many different products Nokia offers within a common product line. This common product line is cellular phones and accessories. Nokia offers many different cell phones with many different features. Nokia, however, is more than just a manufacturer. In addition to its manufacturing base, Nokia offers cellular phone and digital television service though in limited areas. It may seem that Nokia has a limited product line but when include with the research and development of these areas, their service and manufacturing portfolios become more impressive. As it can be assumed the cellular phone market is very lucrative. In 2003, according to The Journal.com, Nokia had sales of $37.1 billion and profit of $4.53 billion. This encompasses all revenue and profit areas, with a market share in the phone industry of nearly 35%. This market share has declined, at least in the first quarter of this year, to 29%. Rival phone manufacturers are stealing market share away from Nokia, while Nokia failed to meet the demand for its phones in the first quarter. More recent estimations of market share where not available as of November 2004. Technology is absolutely crucial to the prosperity of Nokia. Technology is what sets Nokia apart from its competitors. As a pioneer in the development of cell phone capabilities, Nokia uses cutting edge technology in mobile instant messaging, browsing, video, imaging, music, and emailing. Security while using the features is also one of their primary concerns. With new bluetooth technology, Nokia is providing peace of mind in information transfers. Data synchronization and wireless Internet capabilities are also part of Nokia’s advanced mobile technology. Also using advanced technology is the digital television service they provide, but pioneers in this field they are not. As can be imagined with any large employer, Nokia offers many different employment opportunities. These opportunities are available for almost every educational level, with jobs varying from janitor to research development specialist. As both a manufacturer, service provider and research development firm there are many different positions available. In the service field 8

there is phone assistance that works with customers and their accounts, while actual technicians work in the field fixing disruptions in service and connecting accounts. The research department creates new technology for the manufacturing sector to put into production. Obviously, there are the necessary departments such as accounting and human resources that facilitate the everyday operation of the company. The management team coordinates the focus and strategy of the overall company and works to improve upon existing procedure. The entire employment structure is tiered in the fact that each member of each department is accountable to an overseeing authority. In fact, even the chief executive officer of the company is accountable to the board of directors. This accountability forces the ethical behavior of each member of Nokia, since the board is ultimately accountable to the stakeholders of the company. The entire structure is similar to and umbrella in shape, funneling together towards the peak, but then funnels back out to the stakeholder at the top. Everyone is accountable.

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Chapter 1 Nokia’s History
Introduction of Nokia:
Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighboring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with over 123,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 41 billion and operating profit of €1.2 billion as of 2009.It is the world's largest manufacturer of mobile telephones: its global device market share was about 39% in Q4 2009, up from 37% in Q4 2008 and 38% in Q3 2009, and its converged device market share was about 40% in Q4, up from 35% in Q3 2009. Nokia produces mobile devices for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia is also engaged in providing free digital map information and navigation services through its wholly-owned subsidiary Navteq. Nokia has sites for research and development, manufacture and sales in many countries throughout the world. As of December 2009, Nokia had R&D presence in 16 countries and employed 37,020 people in research and development, representing approximately 30% of the group's total workforce. The Nokia Research Center, founded in 1986, is Nokia's industrial research unit consisting of about 500 researchers, engineers and scientists. It has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States. Nokia is a public limited liability company listed on the Helsinki, Frankfurt, and New York stock exchanges.Nokia plays a very large role in the economy of Finland; it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007, a unique situation for an industrialized country. It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors.Nokia increased Finland's GDP by more than 1.5% in 1999 alone. In 2004 Nokia's share of the Finnish GDP was 3.5% and accounted for almost a quarter of Finland's exports in 2003. So,I select Nokia corporation as my project topic, and I will study finance ,marketing , human resource deparments of nokia corporation and discuss how change mangement enters in nokia corporation and how it whats are its effects on both the internal and external environment of the company.

Nokia’s first century: 1865-1967
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The first Nokia century began with Fredrik Idestam's paper mill on the banks of the Nokianvirta river. Between 1865 and 1967, the company would become a major industrial force; but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics...

1865:

The

birth

of

Nokia

Fredrik Idestam establishes a paper mill at the Tammerkoski Rapids in south-western Finland, where the Nokia story begins.

1898:

Finnish

Rubber

Works

founded

Eduard Polón founds Finnish Rubber Works, which will later become Nokia's rubber business.

1912:

Finnish

Cable

Works

founded

Arvid Wickström starts Finnish Cable Works, the foundation of Nokia's cable and electronics businesses.

1937:

Verner

Weckman,

industry

heavyweight

Former Olympic wrestler Verner Weckman becomes President of Finnish Cable Works.

1960:

First

electronics

department

Cable Works establishes its first electronics department, selling and operating computers.

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1962:

First

in-house

electrical

device

The Cable Works electronics department produces its first in-house electrical device - a pulse analyzer for nuclear power plants.

1967:

The

merger

Nokia Ab, Finnish Rubber Works and Finnish Cable works formally merge to create Nokia Corporation.

The newly formed Nokia Corporation was ideally positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products...

1979:

Mobira

Oy,

early

phone

maker

Radio telephone company Mobira Oy begins life as a joint venture between Nokia and leading Finnish television maker Salora.

1981:

The

mobile

era

begins

Nordic Mobile Telephone (NMT), the first international mobile phone network, is built.

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1982:

Nokia

makes

its

first

digital

telephone

switch

The Nokia DX200, the company’s first digital telephone switch, goes into operation.

1984:

Mobira

Talkman

launched

Nokia launches the Mobira Talkman portable phone.

1987:

Mobira

Cityman

birth

of

a

classic

Nokia launches the Mobira Cityman, the first handheld NMT phone.

1991:

GSM

a

new

mobile

standard

opens

up

Nokia equipment is used to make the world’s first GSM call.

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Mobile revolution:1992-1999
In 1992, Nokia decided to focus on its telecommunications business. This was probably the most important strategic decision in its history. As adoption of the GSM standard grew, new CEO Jorma Ollila put Nokia at the head of the mobile telephone industry’s global boom – and made it the world leader before the end of the decade...

1992:

Jorma

Ollila

becomes

President

and

CEO

Jorma Ollila becomes President and CEO of Nokia, focusing the company on telecommunications.

1992:

Nokia’s

first

GSM

handset

Nokia launches its first GSM handset, the Nokia 1011.

1994:

Nokia

Tune

is

launched

Nokia launches the 2100, the first phone to feature the Nokia Tune.

1994:

World’s

first

satellite

call

The world’s first satellite call is made, using a Nokia GSM handset.

1997:

Snake

a

classic

mobile

game

The Nokia 6110 is the first phone to feature Nokia’s Snake game.

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1998:

Nokia

leads

the

world

Nokia becomes the world leader in mobile phones.

1999:

The

Internet

goes

mobile

Nokia launches the world's first WAP handset, the No

Nokia now:2000-today
Nokia’s story continues with 3G, mobile multiplayer gaming, multimedia devices and a look to the future...

2002:

First

3G

phone

Nokia launches its first 3G phone, the Nokia 6650.

2003:

Nokia

launches

the

N-Gage

Mobile gaming goes multiplayer with the N-Gage.

2005:

The

Nokia

Nseries

is

born

Nokia introduces the next generation of multimedia devices, the Nokia Nseries.

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2005:

The

billionth

Nokia

phone

is

sold

Nokia sells its billionth phone – a Nokia 1100 – in Nigeria. Global mobile phone subscriptions pass 2 billion.

2006:

A

new

President

and

CEO

– Nokia

today

Olli-Pekka Kallasvuo becomes Nokia’s President and CEO; Jorma Ollila becomes Chairman of Nokia’s board. Nokia and Siemens announce plans for Nokia Siemens Networks.

2007
Nokia recognized as 5th most valued brand in the world. Nokia Siemens Networks commences operations. Nokia launches Ovi, its new internet services brand.

2008
Nokia's three mobile device business groups and the supporting horizontal groups are replaced by an integrated business segment, Devices & Services.

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Chapter 2 Marketing Department Market Share of Nokia Corporation in year 2009

4Ps, Marketing Mix of Nokia Product
Historically, the thinking was: a good product will sell itself. However there are no bad products anymore in today's highly competitive markets. Plus there are many laws giving customers the right to send back products that he perceives as bad. Therefore the question on product has become: does the organization create what its intended customers want? Define the characteristics of your product or service that meets the needs of your customers.

Functionality:
• • • • • • • Quality Appearance Packaging Brand Service Support Warranty

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Products Mix of Nokia Offered to customer are

Nokia N90

Nokia 7710 Nokia 6300 Nokia 95

Nokia 6681 Nokia 7280 Nokia N 81 Nokia 5300

Nokia 6680

Nokia 6670

Nokia 3600

Nokia 6260

Nokia 6255

Nokia 6235

Nokia 6230i

Nokia 3230

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Price:
How much are the intended customers willing to pay? Here we decide on a pricing strategy - do not let it just happen! Even if you decide not to ask (enough) money for a product or service, you must realize that this is a conscious decision and forms part of the pricing strategy. Although competing on price is as old as mankind, the consumer is often still sensitive for price discounts and special offers. Price has also an irrational side: something that is expensive must be good. Permanently competing on price is for many companies not a very sensible approach. List Price: • • • • Discounts Financing Leasing Options Allowances.

Place
Available at the right place, at the right time, in the right quantities? Some of the recent major changes in business have come about by changing Place. Think of the Internet and mobile telephones Locations: • • • • • • • Logistics Channel members Channel Motivation Market Coverage Service Levels Internet Accessibility

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Promotion How are the chosen target groups informed or educated about the organization and its products? This includes all the weapons in the marketing armory - advertising, selling, sales promotions, Public Relations, etc. While the other three P's have lost much of their meanings in today's markets, Promotion has become the most important P to focus on. Advertising: • Front Line Service Public Relations Message Direct Sales Sales Media Budget

• • • • • •

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Market Segmentation of Nokia

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Nokia Phone Life Style Segmentation Style Variable
      Basic / Entry Expression Active Classic Fashion Premium

Nokia Phone functionality Variable Functionality Variable
     Voice Entertainment Imaging Media Business Application

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Chapter 3
Nokia’s Human Resource Department:
The following excerpt is from Nokia Supplier Requirements, defining our expectations for Human Resources. Workforce planning and recruiting Supplier shall have a system to ensure the availability of workforce for current and future business needs, in a sustainable and ethical manner, at both organizational and unit level. Resource planning Resources need to be available to meet both current and future business needs according to company strategy. Resource planning shall be conducted at both organizational / global and unit / local levels. In particular, underage workers or false apprenticeship schemes must not be used. Recruiting and exit procedures Supplier shall ensure that competent and eligible individuals are recruited and appointed to open positions, according to competence, with equal opportunity and on a voluntary basis. Supplier shall check the eligibility of candidates and that they exceed the minimum legal age of employment. Upon employment, individuals shall be provided with a work contract /agreement /offer letter, basic induction training and not be required to give financial deposits or original identity documents. Forced labor must not be used. Employees shall be free to leave the company after giving reasonable notice. Supplier shall ensure that exit procedures are compliant with local legislation, international labor standards and applicable collective agreements. Non-disclosure and confidentiality agreements Supplier shall ensure that employees working with Nokia products or projects or having access to Nokia specific knowledge, information or data, or to Nokia facilities,

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have signed a Non-Disclosure Agreement (NDA). Supplier shall ensure that the employees fully understand its practical implications. Occupational health and safety protection Supplier shall ensure that physical and mental working conditions allow employees to perform their tasks safely and efficiently. Supplier shall have procedures for identifying, minimizing and preventing hazards. They shall be implemented as, for example, safety instructions, work procedures, preventive maintenance, employee training, identification of potential hazards and appropriate safety devices, personal protective equipment and clothing, hearing protectors, chemical control or machine safeguarding. Supplier shall nominate and train persons responsible for the occupational health of employees. Supplier shall have specific procedures in place for employees under the age of 18 (young workers). Supplier shall assume responsibility for the occupational health of employees working off-site (e.g., at customer premises). Occupational health and safety response Supplier shall have occupational health and safety procedures to prepare for and respond to emergency situations involving occupational health and safety risks. Supplier shall record and investigate emergency situations. Management shall encourage employees to report accidents and take action upon these records and reports. Employee amenities Supplier shall ensure that employees are provided with access to potable water and clean toilet facilities. Canteen facilities and food preparation areas shall be clean and safe, and food shall be provided at reasonable cost. Employee dormitories shall be clean, safe (equipped with, e.g., fire extinguishers and exits), adequately ventilated and/or heated, shall provide reasonable personal space and shall be provided at reasonable cost.

Competence analysis

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Supplier should periodically conduct competence analyses to identify the knowledge and skills/competences required to perform the organization’s business activities according to short- and long-term strategic goals. Competence development Supplier shall ensure that employees, at all levels and with equal opportunity, have the education, training and competence they need for their positions and tasks. Supplier shall develop training plans based on competence analyses and implement them to enhance and develop workforce capabilities. Supplier shall maintain a training register, detailing the training employees have received. Nokia specific training and certification Supplier shall ensure, on request, that personnel allocated to Nokia work have the necessary training on Nokia policies, products, processes and guidelines and, if needed, have necessary licenses and certificates. Supplier shall ensure such licenses and certificates are valid in terms of time and scope. Supplier, providing services at Nokia facilities, including (Nokia's) customer sites, shall ensure that its personnel act in accordance with Nokia values and Code of Conduct. Working time and time off Supplier shall ensure that employees can perform assigned tasks efficiently without exceeding the maximum working hours as defined by local labor laws or applicable collective agreements. Supplier shall ensure that employees have at least one day off per seven-day week, and that overtime work is voluntary. Holidays (e.g., public holidays) and leaves of absence (e.g., medical or parental) shall comply with local labor laws or applicable collective agreements. Compensation and benefits Supplier shall provide all employees (permanent, temporary, apprentices and contract workers) with fair compensation (wages /salaries) meeting or exceeding local legal and industry minimum standards, for regular as well as overtime work. Supplier shall also provide employees with benefits to reward contributions, skills and behavior considered vital to success. Compensation and benefits shall be aligned with relevant company policies. Fair treatment

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Supplier shall ensure that employees at its facilities are treated with respect and dignity, equal opportunity and are safe from abuse, harassment or bullying of any kind (e.g., physical, verbal, mental, sexual, racial, cultural, age or disability related). Supplier shall ensure company rules / guidelines are communicated to employees. Supplier shall ensure that disciplinary procedures prohibit physical punishment and do not support financial deductions, or the threat thereof. Performance management Supplier should have a system to manage employee performance. Supplier should ensure individual objectives are derived from company strategy and policies. Supplier should ensure performance is evaluated fairly and objectively, against defined criteria and on a periodic basis, to identify ways to improve performance. Communication and coordination Supplier shall ensure that information relevant to employees (about, e.g., business activities, changes and results) is communicated across the organization. Supplier shall ensure employees can share such information fast enough to be able to align their activities efficiently. Supplier shall respect the right of all employees to form and join trade unions of their choice and to bargain collectively, and in cases this is restricted by law, facilitate parallel means to ensure that individuals or groups are able to raise concerns to the attention of the management. Employee satisfaction Supplier should have the means to evaluate and improve employee satisfaction. A company of substantial size (i.e. headcount exceeding 100) should have an employee satisfaction program based on employee opinion surveys and should take action based on the results of the program.

Feedback and complaint channels Supplier shall have a system through which employees can give feedback or complain about unethical conduct, unfair treatment or practices, violation of company values, policies and procedures, or improvement ideas and suggestions. Management shall, when appropriate, act upon this feedback and handle it confidentially and anonymously. Management shall ensure that there are no adverse consequences as a result of giving feedback.
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Chapter 4 Nokia Financial Department:

Nokia Q4 2009 net sales EUR 12.0 billion, non-IFRS EPS EUR 0.25 (reported EPS EUR 0.26) Nokia 2009 net sales EUR 41.0 billion, non-IFRS EPS EUR 0.66 (reported EPS EUR 0.24) Nokia Board of Directors will propose a dividend of EUR 0.40 per share for 2009 (EUR 0.40 per share for 2008) Non-IFRS fourth quarter 2009 results1 EUR million Net sales Devices Services NAVTEQ Nokia Networks Operating profit Devices Services NAVTEQ Nokia Networks Operating margin Devices Services NAVTEQ Nokia Networks EPS, EUR Diluted Siemens & & Siemens Q4/2009 11 988 8 179 225 3 625 1 473 1257 54 201 12.3% & Siemens 15.4% 24.0% 5.5% 0.25 Q4/2008 12 665 8 141 206 4 340 1 239 983 53 225 9.8% 12.1% 25.7% 5.2% 0.26 -3.8% YoY QoQ Chan Q3/2009 Chan ge ge -5.3% 9 810 22.2% 0.5% 9.2% 18.9 % 27.9 % 1.9% 10.7 % 6 915 166 18.3% 35.5% 31.3% 98.8 % 59.7 % 25.6 %

-16.5% 2 760 741 787 43 -53 7.6% 11.4% 25.9% -1.9% 0.17

47.1 %

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Non-IFRS full year 2009 results 1, 2 200 9 Net sales Devices & Services NAVTEQ Nokia Siemens Networks Operating profit Devices & Services NAVTEQ Nokia Siemens Networks Operating margin Devices & Services NAVTEQ Nokia Siemens Networks EPS, EUR Diluted 40 987 27 853 673 12 574 3 503 3 488 121 28 8.5% 12.5% 18.0% 0.2% 0.66 200 8 50 722 35 099 363 15 319 7 033 6 373 82 757 13.9% 18.2% 22.6% 4.9% 1.34 50.7 % 96.3 % YoY Chan ge -19.2% -20.6% -17.9% 50.2 % 45.3 %

Reported fourth quarter 2009 results EUR million Net sales Devices Services NAVTEQ Nokia Networks Operating profit Devices Services 29 & & Siemens Q4/2009 11 988 8 179 225 3 625 1 141 1 219 Q4/2008 12 662 8 141 205 4 338 492 766 YoY QoQ Chang Q3/2009 Chan e ge -5.3% 9 810 22.2% 0.5% 9.8% -16.4% 131.9 % 59.1% 6 915 166 2 760 -426 785 55.3 % 18.3% 35.5% 31.3%

NAVTEQ Nokia Networks Operating margin Devices Services NAVTEQ Nokia Networks EPS, EUR Diluted Reported full year 2009 results 2

-56 Siemens & Siemens 17 9.5% 14.9% -24.9% 0.5% 0.26

-73 -179 3.9% 9.4% -35.6% -4.1% 0.15 73.3%

-68 -1 107 -4.3% 11.4% -41.0% -40.1% -0.15

200 9 Net sales Devices & Services NAVTEQ Nokia Siemens Networks Operating profit Devices & Services NAVTEQ Nokia Siemens Networks Operating margin Devices & Services NAVTEQ Nokia Siemens Networks EPS, EUR Diluted FOURTH QUARTER 2009 FINANCIAL HIGHLIGHTS (Comparisons are given to the fourth quarter 2008 results, unless otherwise indicated.) 40 984 27 853 670 12 574 1 197 3 314 -344 -1 639 2.9% 11.9% 51.3% 13.0% 0.24

200 8 50 710 35 099 361 15 309 4 966 5 816 -153 -301 9.8% 16.6% 42.4% -2.0% 1.05

YoY Chan ge -19.2% -20.6% -17.9% 75.9 % 43.0 %

77.1 %

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The non-IFRS results exclusions Q4 2009 — EUR 332 million (net) consisting of:
• • • • • • • • •

EUR 89 million restructuring charge and other one-time items in Nokia Siemens Networks EUR 22 million gain on sale of real estate in Nokia Siemens Networks EUR 36 million restructuring charge in Devices & Services EUR 117 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks EUR 110 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications in Devices & Services

Q4 2009 taxes — EUR 213 million non-cash positive effect from development and outcome of various prior year items impacting Nokia taxes Q3 2009 — EUR 1 167 million consisting of:
• • • • • • • •

EUR 908 million impairment of goodwill in Nokia Siemens Networks EUR 29 million restructuring charge and other one-time items in Nokia Siemens Networks EUR 117 million of intangible assets amortization and other purchase price related items arising from the formation of Nokia Siemens Networks EUR 111 million of intangible assets amortization and other purchase price related items arising from the acquisition of NAVTEQ EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications in Devices & Services

Q3 2009 taxes — EUR 432 million valuation allowance for Nokia Siemens Networks deferred tax assets impacting Nokia taxes Q4 2008 — EUR 747 million consisting of:
• • • • •

EUR 286 million restructuring charge and other one-time items in Nokia Siemens Networks EUR 52 million restructuring charge in Devices & Services EUR 165 million representing the contribution of assets to Symbian Foundation EUR 5 million restructuring charge in NAVTEQ EUR 118 million of intangible asset amortization and other purchase price accounting related tems arising from the formation of Nokia Siemens Networks EUR 121 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ

i
• • •

Non-IFRS results exclude special items for all periods. In addition, non-IFRS results exclude intangible asset amortization, other purchase price accounting related items and inventory value

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adjustments arising from i) the formation of Nokia Siemens Networks and ii) all business acquisitions completed after June 30, 2008. Nokia Group Nokia's fourth quarter 2009 net sales decreased 5% to EUR 12.0 billion, compared with EUR 12.7 billion in the fourth quarter 2008. At constant currency, group net sales would have decreased 4% year on year. The following chart sets out the year on year and sequential growth rates in our net sales on a reported basis and at constant currency for the periods indicated. NOKIA FOURTH Reported & Constant Currency 1 QUARTER 2009 NET SALES

Group net sales - reported Group net sales - constant currency 1 Devices & Services net sales - reported Devices & Services net sales - constant currency 1 Nokia Siemens Networks net sales - reported Nokia Siemens Networks net sales - constant currency 1
1

Q4/2009 Q4/2009 vs. vs. Q4/2008 Q3/2009 Change Change -5% 22% -4% 20% 0.5% 18% 2% 16% -16% 31% -17% 28%

Change in net sales at constant currency excludes the impact of changes in exchange rates in comparison to the Euro, our reporting currency. Devices & Services In the fourth quarter 2009, the total mobile device volumes of Devices & Services were 126.9 million units, representing an increase of 12% year on year and 17% sequentially. The overall industry mobile device volumes for the same period were 329 million units based on Nokia's estimate, representing an increase of 8% year on year and 14% sequentially. NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA (million units) Europe Middle East & Africa Greater China Asia-Pacific North America Latin America Total Q4/2009 34.3 24.3 17.6 34.5 3.8 12.4 126.9 Q4/2008 34.7 18.2 12.9 29.9 4.1 13.3 113.1 YoY Change -1.2% 33.5% 36.4% 15.4% -7.3% -6.8% 12.2% Q3/2009 27.1 19.6 18.5 30.5 3.1 9.7 108.5 QoQ Change 26.6% 24.0% -4.9% 13.1% 22.6% 27.8% 17.0%

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Based on our preliminary market estimate, Nokia's mobile device market share for the fourth quarter 2009 was 39%, compared with 37% in the fourth quarter 2008 and 38% in the third quarter 2009. Our year on year market share increase was driven by higher market share in all regions except North America, where our market share was flat. Our sequential market share increase was driven primarily by higher market share in Asia-Pacific, Middle East & Africa, Europe and North America. Our market share was sequentially down in Greater China and Latin America. DEVICES & SERVICES NET SALES AND ASP BY OPERATING MODE Net sales, EUR ASP, EUR billion Q4/2009 Q3/2009 Q4/2009 Q3/2009 1 Mobile phones 4.3 3.8 40 41 Converged mobile devices2 3.9 3.1 186 190 Total 8.2 6.9
1

Series 30 and Series 40-powered devices ranging from basic mobile phones focused on voice capability to devices with a number of additional functionalities, such as Internet connectivity, including the services and accessories sold with them. NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC AREA YoY EUR million Q4/2009 Q4/2008 Change Europe 1 327 1 636 -18.9% Middle East & Africa 371 615 -39.7% Greater China 425 409 3.9% Asia-Pacific 818 967 -15.4% North America 244 198 23.2% Latin America 440 513 -14.2% Total 3 625 4 338 -16.4% QoQ Change 25.0% -4.1% 26.9% 44.3% 92.1% 56.0% 31.3%

Q3/2009 1 062 387 335 567 127 282 2 760

Nokia Siemens Networks reported gross profit decreased 5% to EUR 1.07 billion, compared with EUR 1.13 billion in the fourth quarter 2008, with a gross margin of 29.5% (26.1%). Nokia Siemens Networks non-IFRS gross profit decreased 16% to EUR 1.1 billion, compared with EUR 1.3 billion in the fourth quarter 2008, with a non-IFRS gross margin of 30.6% (30.4%). The lower year on year non-IFRS gross profit in the fourth quarter 2009 was due primarily to lower year on year net sales. Q4 2009 OPERATING HIGHLIGHTS Devices & Services Nokia introduced the Nokia 1616, Nokia 1800, Nokia 2220 slide and Nokia 2690, all affordable mobile devices that support Nokia Life Tools, a service through which consumers can access timely and relevant agricultural information, as well as education and entertainment services, without requiring the use of GPRS or Internet connectivity. During the fourth quarter, Nokia launched Nokia Life Tools in Indonesia.

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Nokia commenced shipments of the Nokia X6, a powerful touch smartphone with 32 GB of on-board memory that comes in combination with Comes With Music, Nokia's 'all-you-can-eat' music offering. • 46 languages, and traffic information for more than 10 countries, as well as detailed maps for more than 180 countries. • Ovi Store, Nokia's one-stop shop for applications and content, continued to grow, with the store now attracting more than 1 million downloads a day. • Nokia commenced shipments of the Nokia E72, a device designed especially for business use and messaging, and featuring a full QWERTY keyboard, a 5 megapixel camera and assisted GPS. The Nokia E72 is one of many Nokia mobile devices supporting Nokia Messaging, Nokia's email service, which continued to gain traction. Nokia Messaging is now available to Nokia users in more than 100 countries and more than 2 million users are now registered. • Nokia continued to expand Ovi Mail, a free email service designed especially for users in emerging markets with Internet-enabled devices. The service can be set up and accessed without ever needing a PC. More than 5 million accounts have been activated since Ovi Mail was launched in late 2008.

NOKIA IN THE FOURTH QUARTER 2009 (The following discussion is of Nokia's reported results. Comparisons are given to the fourth quarter 2008 results, unless otherwise indicated.) Nokia's net sales decreased 5% to EUR 11 988 million (EUR 12 662 million). Net sales of Devices & Services increased 0.5% to EUR 8 179 million (EUR 8 141 million). Net sales of NAVTEQ increased 10% to EUR 225 million (EUR 205 million). Net sales of Nokia Siemens Networks decreased 16% to EUR 3 625 million (EUR 4 338 million). Operating profit increased 132% to EUR 1 141 million (EUR 492 million), representing an operating margin of 9.5% (3.9%). Operating profit in Devices & Services increased 59% to EUR 1 219 million (EUR 766 million), representing an operating margin of 14.9% (9.4%). Operating loss in NAVTEQ was EUR 56 million (operating loss EUR 73 million), representing an operating margin of -24.9% (35.6%). Operating profit in Nokia Siemens Networks was EUR 17 million (operating loss EUR 179 million), representing an operating margin of 0.5% (-4.1%). Group Common Functions reported expense totaled EUR 39 million (EUR 22 million). Nokia Group For 2009, Nokia's net sales decreased 19% to EUR 41.0 billion (EUR 50.7 billion in 2008). Net sales of Devices & Services for 2009 decreased 21% to EUR 27.9 billion (EUR 35.1 billion). Net sales of Nokia Siemens Networks decreased 18% to EUR 12.6 billion (EUR 15.3 billion). Net sales of NAVTEQ were EUR 670 million in 2009 (EUR 361 million for the six months ended December 31, 2008). Devices & Services

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In 2009, the total mobile device volume of our Devices & Services group reached 432 million units, representing a decrease of 8% year on year. The overall industry mobile device volumes for 2009 reached 1.14 billion units, based on Nokia's preliminary market estimate, representing a decrease of 6% year on year. Based on our preliminary market estimate, Nokia's market share decreased to 38% in 2009, compared to 39% in 2008. Of the total industry mobile device volumes, converged mobile device industry volumes in 2009 increased to 176 million units, based on Nokia's estimate, compared with an estimated 161 million units in 2008. Our own converged mobile device volumes increased to 67.8 million units in 2009, compared with 60.6 million units in 2008. Nokia shipped approximately 18 million Nokia Nseries and approximately 18 million Nokia Eseries devices in 2009, down from the combined 46 million Nseries and Eseries devices we shipped in 2008. NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA (million units) Europe Middle East & Africa Greater China Asia-Pacific North America Latin America Total PERSONNEL The average number of employees during 2009 was 123 171, of which the average number of employees at Nokia Siemens Networks was 62 129. At December 31, 2009, Nokia employed a total of 123 553 people (125 829 people at December 31, 2008), of which 63 927 were employed by Nokia Siemens Networks (60 295 people at December 31, 2008). SHARES The total number of Nokia shares at December 31, 2009 was 3 744 956 052. At December 31, 2009, Nokia and its subsidiary companies owned 36 693 564 Nokia shares, representing approximately 1.0 % of the total number of Nokia shares and the total voting rights. DIVIDEND Nokia's Board of Directors will propose a dividend of EUR 0.40 per share for 2009. 2009 107.0 77.6 72.6 123. 5 13.5 37.6 431. 8 YoY Change 114.9 -6.9% 81.0 -4.2% 71.3 1.8% 134. -7.8% 0 15.7 -14.0% 51.5 -27.0% 468. -7.8% 4 2008

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Chapter 5 Nokia’s Changes Management
Introduction
What is the call for an organizational change of a company? Before the decision reached its final, the organization must first identify the reasons for the organizational change. The organization is the brain of the business, this is the place where you will find different of people but working together to reach the growth potential of the business. The collection of people that aiming for the success of the business and they are the head the thinking for some possibilities on how to make the success come to life. The organization is an essential part of the business that composes of different creative minds and if the ideas are insufficient, the brainstorming steps in. Sometimes, organizational change happens for the good of the business, they are only inviting the fresh ideas to come.

Organizational Change on Nokia
Some firms have had to change dramatically to stay in business. Nokia began life as a lumber company, making the equipment and supplies needed to cut down forests in Finland. It moved through into paper and from there into the ‘paperless office’ world of IT – and from there into mobile telephones.1

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As the world leader in mobility, Nokia is driving the transformation and growth of the converging Internet and communications industries. The company makes a wide range of mobile devices with services and software that enable people to experience music, navigation, video, television, imaging, games, business mobility and more. Developing and growing our offering of consumer Internet services, as well as the enterprise solutions and software, is a key area of focus.2 It seems like every year, the company acknowledges the organizational change and reshuffling the leaders. The company planned further changes in its sales and marketing activities in the Markets unit, which is expected to affect about 450 employees, maximum 100 in Finland.3Joining with the occurrences of change, it is deliberately needed intense adjustments especially on the newly-deputies.

The Aims:
1. To follow-up the company’s reorganization in the past year that target to strengthen the customer interface, and ensuring that all resources are well allocated to meet the business needs and de-layer the organization. 2. To make the Nokia Research Center (NRC), which specialize long-term research activities, sharpen its focus on fewer but stronger research areas. 3. The company is planning to relocate their activities in a more convenient site. 4. The company also plans some smaller workforce adjustments in global process operations.

Organizational Change Models
There are two possible organizational change models that the Nokia used in establishing their efforts that falls under the Strategic Planning model. There is various kind of approach and two are picked-up for careful examination. The two models are Alignment Model and Scenario Planning Model.4

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Alignment Model This kind of model ensures the strong alignment among the organization’s mission and its resources to effectively operate the organization. This model is useful for organizations that need to fine-tune strategies or find out why they are not working. An organization might also choose this model if it is experiencing a large number of issues around internal efficiencies. Overall steps include: 1. The planning group outlines the organization’s mission, programs, resources, and needed support. 2. Identify what’s working well and what needs adjustment. 3. Identify how these adjustments should be made. 4. Include the adjustments as strategies in the strategic plan Scenario Planning This approach might be used in conjunction with other models to ensure planners truly undertake strategic thinking. The model may be useful, particularly in identifying strategic issues and goals. 1. Comes with the selection of several external forces and imagining the related changes which might influence the organization. 2. For each change in a force, discuss three different future organizational scenarios which might arise with the organization as a result of each change. Reviewing the worst-case scenario often provokes strong motivation to change the organization. 3. Suggestions are formulated what the organization might do, or potential strategies, in each of the three scenarios to respond to each change.

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4. Planners soon detect common considerations or strategies that must be addressed to respond to possible external changes. 5. The selection of the most likely external changes to effect the organization, and identifying the most reasonable strategies the organization can undertake to respond to the change.

Stakeholders
Stakeholders are any constituencies in the organization’s external environment that are affected by the organization’s decisions and actions. These groups have a stake in or are significantly influenced by what the organization does. One reason is that it can lead to other organizational outcomes such as improved predictability of environmental changes, more successful innovations, greater degrees of trust among stakeholders, and greater organizational flexibility to reduce the impact of change.5

Profit Down, Nokia Change Management

After experiencing a profit down in the third quarter 2009, the giant mobile phone company began to take strategic steps to overhaul its management ranks. Nokia separate business entities, namely mobile phone division and the division smartphone. Chief Financial Officer (CFO) Motorola, Rick Simonson as chief of the division is positioned mobile Phone. Both divisions will begin running in early November. Rick's position as CFO, will be replaced by the Global Head of Sales Siemens, Timo Ihamuotila. "After five years of success as CFO, Rick's time to move to a more strategic position. Rick

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Simonson has an intimate knowledge of business and finance, and this is a precious value for Siemens business," said Nokia CEO, Olli-Pekka Kallasvuo. Rick Simonson joined with Nokia since 2001 and occupies the position of CFO since 2004. At its new venue, as head of the Mobile Phones division, Rick will be fully responsible for the sustainability of products outside the smart phone Earlier, Nokia reported a decline in profits that they produce in the third quarter of 2009. Nokia profit falls to 391 million pounds, equivalent to Rp5, 96 trillion (Rp15.243 per pound) compared to the same quarter last year, which reached 1.3 billion pounds. Even the sales growth of Nokia fell 20 percent year on year to 9 billion pounds. This report has been commissioned by top management at Nokia to produce an implement plan concentrating on people's aspects of implementation of the new environmental initiative of reducing its carbon footprint by introducing a company wide centralized management information system and policy focused at reduction in paper and printing usage. Therefore the specific objectives of this report can be highlighted as to understand the dynamics of environmental initiative for the organization, to analyze the impact of this initiative on the attitude and behaviour of employees, and to recommend an implementation plan focused at softer aspects of organization for the successful change management.

Conclusion
The Nokia is really connecting its people, though there are employees that will affected by the organizational changes. An effectiveness of an organizational change is satisfying the stakeholders goal’s and interests. The effect of organizational change in the view of the stakeholders is inconceivably high. The possibilities of the success and loss plays in the middle of the company, not until every proposed projects was deployed. No matter how many times a company imposed organizational change; the success for the new plan will be useless if the appointees were not cooperating

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Conclusion
As Nokia is the leading manufacturer of mobile phones whole over the world, its new strategy of diversification in Nokia Mobile Network will be at great success, also customers are loyal to Nokia and Nokia has positioned itself properly in the minds of all the customers. It will be easier for Nokia to attract its existing customers. Besides this Nokia with its latest technology and strong networks is laying more stress on rural areas where till now no network has satisfied rural people. Nokia maintains distinctive advantage over their current and future competition without patent protection But on the other Hand the products from the Finnish company, Nokia, are some of the very best in the world, but the company still hasn’t found a profitable way to market its goods. The very reason that other mobile phone companies are fast eating up Nokia’s market share is their superior (yet simple) marketing practices. Motorola and Samsung must now be in the FUW (frequently used words) list in Nokia’s board meetings. These companies have made Nokia pay dearly for its undeveloped approach in marketing its phones. The aggressive marketing practices followed by Motorola have hit Nokia very
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hard and it is losing very crucial global market share every month to its American competitor. Hence if Nokia doesn’t take much care of this matter he will face tough time in the Future.

Suggestion For improvement
 Nokia Should Encourage Diagonal Alliance.  Nokia need to break out of Cities to Rural areas.  Focus on youth i.e. imaging and games.  Nokia need to reframe its Strategy for US market.  It needs to create affordable alternative of Black Berry.  Nokia should reduce its prices According to its Competitors.  Nokia should enhance its voice and sound Quality.  It should reduce heavy wait of cell phones.  Also concentrate on the size of cell phones.  Nokia must analyze its cell phones style and designs.

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Bibliography
www.nokia.com www.scribd.com www.wikipedia.com www.freemanagementeassy.com www.google.com

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