The Case Study of NOKIA

 

Abstract

Nokia being one of the reputed mobile manufacturing companies has conquered the leadership in the global mobile markets and has been very effectively working on its business process of good product line, the process management of marketing, promotions, distribution and many other such aspects that are significant to the business cycle. However the company has missed on one of the essential factors of understanding the changing trends and the customer expectations. Over a period of time when the company has aimed at the changing trends and has geared up for the transformation, it has been too late to the conditions and also the internal challenges of communication gap and other such key issues has led to the failure of change management. In this research method, the focus has been on understanding how the fundamentals of change management like adapting and working the change management based on a framework like the PROSCI model would have helped the NOKIA in successful change management and organizational transformation.

Table of Contents

Abstract 2

Table of Contents. 3

1.0        Introduction. 3

2.0        NOKIA and its Change Management Strategies. 5

2.1        Need for Change Management 5

2.2        Change management Approach. 6

3.0        Reasons for the failure of change management in NOKIA.. 7

4.0        PROSCI method of Change Management 8

5.0        Conclusion. 9

1.0       Introduction

Information and Communication technologies have penetrated in to the modern day communication systems. The kind of disruptive technological revolution which the companies envisaged over a period of time has been revolutionary to the extent the revolution of the yesteryears has faded away in the present scenario.

The kind of revolution the mobile phones technology has brought was phenomenal and the kind of impact the evolution of mobile phone has made is that it changed the dynamics of the communication and within a short span of time; the mobile phones have penetrated in to the global markets and has occupied a significant business value.  There was so much of business value that has been taking place around the mobile phones and the telecom service providers also has got the opportunity and soon it has become an integrated service and the mobile phones has turned in to one of the essential needs for the communication. (Birkinshaw, 2013)

NOKIA the Finn based company has been one of the largest players in the mobile phone manufacturing. Globally there are various companies who have come in to the mobile phone manufacturing process but hardly ever compete to NOKIA, and the company had their production facilities across many locations and has been releasing so many new models of the mobile phones.  Despite the fact that there were many players who have targeted the mobile manufacturing facilities , the market leadership of NOKIA has been undeterred and during a particular point of time, the moment someone had planned for mobile, NOKIA has been come to their minds. (Sanchez, Heene, A, & Thomas, H, 1996)

The strategic approach which the company has adapted during its peak period during 90’s was phenomenal. The company focused effectively on its product line, the marketing strategies, distribution network, supply chain system and the customer service. When every such key factor was taken care effectively, still the company had to undergo the hard fact of losing the market share drastically over a span of five years and the company which had been the global leader in the mobiles market to the stage of fighting for survival. (Lomas, 2012)

There are many reasons that has compounded to the failure of the organization like resistance for change, however the crux is that the companies should envisage the future issues and gear up to handle the circumstances effectively by altering the business process, framing themselves to handle the new technologies, customer expectations and the solutions that could help in technological innovation and new product development. Despite the fact that NOKIA has been regularly releasing the new models very frequently, the issue is that the focus was only on the design change and the models rather than looking at the “Out-of-Box” approach which the competitors have tried in terms of capitalizing on the emerging technologies and anticipating the future trends. Once a no-where mobile manufacturer like SAMSUNG and other companies have capitalized on the smartphone possibilities and have bagged the opportunity and NOKIA ignoring the customer expectations had lost the market share. (SONG, 2009)

In this research report the focus is upon the reasons why the company like NOKIA had to envisage failure and how the issues of change management has impacted the whole organization, the reasons that could be attributed to the failure and other key factors that could provide insights in to how effective implementation of an right change management approach could have supported the efforts of transformation which the NOKIA has made during its last milieu. (kel, 2012)

2.0       NOKIA and its Change Management Strategies

2.1       Need for Change Management

Nokia has been one of the pioneers in the industry and has been leading manufacturer of mobiles and has been distributing and selling its mobile phones in so many countries across the world, despite all it the company had to envisage critical challenges of sustaining its leadership in the market and over a period of time it has lost the significant proportion to its market share to the competitors. (Sanchez, Heene, A, & Thomas, H, 1996)

The reasons for the need of change management are very much visible from the above issue. At any given time, there is advent need for the organizations to have an open eye to the global technological changes. The kind of disruptive technology of mobile internet has emerged, NOKIA has not observed or accepted the intensity of the mobile internet revolution and has ignored. Also the enhancing of features in the mobile phones has become limited over period of time. Despite having a sound R& D department and the market inputs, the company has failed in terms of analyzing the customer expectations and developing the product designs and features that are in lines with the expectations of the customers. (Lomas, 2012)

Unless the companies develop the strategies to innovate, develop, transform themselves according to the changing trends, the case scenario of NOKIA is inevitable. Even after the smart phone revolution has stepped up and the companies are foraying in to smart phone models, NOKIA has been following with its own target market of low end mobile consumers and over a period of time the competition in the smartphone segments has made the players reduce the prices drastically, and it has become a major threat for NOKIA as the low end models market segment has also been eventually occupied by the other players. (Birkinshaw, 2013)

Eventually, when the company realized the need for change and transformation, it was too delayed and the market has been captured by the competitors. Repeated attempts from NOKIA to regain its glory have not resulted in any positive outcome. (kel, 2012)

2.2       Change management Approach

NOKIA has realized the issue of warranting need for change and has ensured that it had a strategic tie-up with other technology giant Microsoft, and started its foray in to smart phone segment and the touch mobile segment. However this organizational change management has to be carried out effectively, engaging the stakeholder communication effectively. The primary reason why NOKIA despite of its entry in to the smartphone segment could not make an impact is that the internal communication systems, the issues pertaining to organizational culture, human resource management, the dwindling confidence of the employees on the organization due to the down trend which the company is facing during the uptrend market scenario. (Birkinshaw, 2013)

As detailed in the Prosci Change management model, it is very essential that the management should have adapted a phased restructuring and also engaging the key stakeholders of the organization in to the task of restructuring and the transformation process which the company is aiming at. (Bourda, 2013)

In overall there are various reasons like ignoring the expectations of the customers, not considering the changing market trends, internal issues of management and the challenges of the losing market share , and many other intrinsic factors have become the key issue related to the organizational failure for transformation. (Lomas, 2012)

3.0       Reasons for the failure of change management in NOKIA

Stakeholder engagement is very important and essential for the organizations when the companies plan their transformation from one stage or state to the other. During such critical process of transformation, the role of stakeholders like the employees, the change management team, the leadership team of the organization, the consultants and the industry experts who are supporting the process of change management, other external and internal stakeholders of the organization should be sharing a common vision in terms of the objective for change management. (SONG, 2009)

But the crux is that in the case context of NOKIA and its change management, the organization has ignored the importance of being update on the customer expectations, estimating the technological revolutions. It could be attributed to the poor work culture or communication management, that with so many talented resources working in the company, still the company could not identify the issues early and has reacted to the need of change management at very late stages. (Sanchez, Heene, A, & Thomas, H, 1996)

 

The disinterest and the disengagement from the frontline staff like the sales people in the organization has been more impactful for the organization , this only emphasize the fact that the communication on the change management process and the approach has not been effective  which has led to the issues of failure in terms of change management. (Lomas, 2012)

4.0       PROSCI method of Change Management

One of the effective change management theories that depict a methodical approach to the change management problems is the PROSCI method. In this model of change management, there are three important stages in the process of change management.

PROSCI which is a recognized research and Development Company which focuses on the change management issues have developed a framework based on the insights from various case inputs and practical implementations of successful change management strategy. (Bourda, 2013)

In the case context of NOKIA and the emerging scenarios, the PROSCI framework approach if had been adapted would have given a different kind of transformation to the organization. In the PROSCI method, the emphasis on change management is on a three phased approach, where in the first phase the company prepares for the change. (Bourda, 2013)

Despite the fact that NOKIA has made its approach towards the first phase of the change management, only partial part of the phase has been successfully implemented. The key in the first phase of transformation is the development of sponsorship which the companies have failed. This could be due to many factors like the missing accountability and other internal issues. (Bourda, 2013)

The other stages of the PROSCI Model of managing the change have been very much ineffective in the case of NOKIA. Had the change management team followed such an effective strategy and had a detailed project charter and the implementation plans, the current level of issues might not have been envisaged by the implementation team. (Bourda, 2013)

Keeping in view the current state of NOKIA it is evident that the step of reinforcing the change which usually provides concrete outcome for the organizations has not been considered in the change management environment of the organization.

5.0       Conclusion

NOKIA which has been one of the leading players in the mobile industry has been very effective in terms of releasing new models and designs that could attract the global markets. But over a period of time when the companies are focusing on the changing trends and started working on new kind of mobile product manufacturing, NOKIA had stick to its old pattern and the traditional mobile devices and kept altering its target market.  However when there was essential need to change, the fundamentals of the change management has not been effectively chalked out by the company and the attempts from the company to revive its existing scenario and get back to market positioning has been a futile attempt as it lacked any concrete plan, approach and the stakeholder engagement. This only emphasize the fact that for any organization, there could be the need for change management and during such scenario it is very essential that they adapt the change management principles and guidelines that could provide them a direction and the outcome from the entire process of change management. (kel, 2012)

 

6.0      References

Birkinshaw, J. (2013, May 08). Why corporate giants fail to change. Retrieved Dec 05, 2014, from FORBES: http://fortune.com/2013/05/08/why-corporate-giants-fail-to-change/

Bourda, F. M. (2013). Change Management Theories and Methodologies. TCS.

kel. (2012, Apr). Nokia Case Study. Retrieved Dec 04, 2014, from aeunike: http://aeunike.lecture.ub.ac.id/files/2012/04/Case-Kel.10.pdf

Lomas, N. (2012, Dec 31). Innovate Or Die: Nokia’s Long-Drawn-Out Decline. Retrieved Dec 04, 2014, from Tech Crunch: http://techcrunch.com/2012/12/31/nokias-long-drawn-out-decline/

Sanchez, R., Heene, A, & Thomas, H. (1996). Dynamics of Competence-Based Competition. Strategy: Process, 332.

SONG, X. (2009). Why Do Change Management Strategies Fail? Journal of Cambridge Studies , 6-15.

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3 thoughts on “The Case Study of NOKIA

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