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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,








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.
Nokias 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
Idestams 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
In 1982, we introduced the first fully-digital local telephone exchange in Europe, and,
in the same year, the worlds 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 operationsincluding paper, personal
computer, rubber, footwear, chemicals, power plant, cable, aluminum and television
businesseswere 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

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 Nokias 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

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 dont
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 todays
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 Nokias 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. Its 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. Nokias 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 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

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 youll experience a high degree of workplace flexibility

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 dont 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, Theyll give you the training you need to
meet the challenges of a dynamic industry. Theyre 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
employees individual opportunity in personal and professional advancement. Theyre
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.

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 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 EVPs 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 Pakistans 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.

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
and psychological environment of








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


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 Englands 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 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.


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.


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 Vals" by
Spanish musician Francisco Tarrega. The Nokia Tune was originally named "Gran Vals" 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:
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, thats 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, Nokias emphasis is on collegiality. As the firms former CEO Jorna Ollila put it, We
dont 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.