Analysis of Nokia

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4. Leadership

In 2010,about 10,000 employees in Nokia were laid off ; while in 2014,three months after Nokia sold its once-dominant mobile phone business to Microsoft, 18,000 employees were laid off by Microsoft (School of hard Nokia: Finland’s unemployed engineers fuel new tech boom,2015). In this aspect, Leadership is one of the significant factors which led to the failure of Nokia.

4.1 Low Leader consideration

The top managers are described as moody leaders, which creates a stress situation for employees. According to the leader-member exchange theory(Organizational Behavior,9th edition), the top managers lack personal concern and respect for employees, which makes leader-member relations poor. The low leader consideration has negative impacts on employees’ motivation, job satisfaction, and leader effectiveness.

An confession from a former employee in Nokia (Bye Bye Nokia-A failure of management over leadership,2014)says that the middle level of managers are afraid to deliver bad news to top managers because they fear that they would be scolded or even fired if they report some problems to boss. The inhibition of communicating upward indicates that the status differences in Nokia are large.

4.2 Poor Decision making

As for the development, the former CEO Mr.Elop refused to cooperate with Google and Android, and almost at the same time, he decided to quit Symbian. The board focused on short-term domination, quick results and non-focus aspects like market share, which in organizational behavior is considered as transactional management. Based on the news (Nokia crisis highlights internal struggle, 2011), the board of Nokia is conceited due to past performance because Nokia is a market leader. Nevertheless, the fact that complacency and lack of focus resulting in too many products on the market is not efficiency for the firm.

As for R&D (research and development), the inapproprate structure and boss-centered leadership cause the information inaccurate and not timely, which leads to delayed reaction on innovation. Just as Tomi, a former Nokia executive, describes (Nokia crisis highlights internal struggle, 2011), though admitting that Nokia has been slow to make progress in some areas, top managers are satisfied with the existing situation. According to the article (Who killed Nokia? Nokia did, 2015), Nokia had access to innovative technology, but it were stopped by the conservative attitude of the board. The decision of the business of non-innovation and lengthy product developing time prevents Nokia from getting out of the hell, which is considered as non-transformational management.

4.3 Solution

Top managers and board should be considerate to employees so that they could build a good leader- member relation in the company and increase the employees’ motivation, job satisfaction and leader effectiveness. They should also accept and understand the cultural differences in order to managing uncertainty and balance global and local tensions. Focusing on transformational management instead of transactional management is another method for managers to improve.

5. Motivation

Nokia emphasizes on cooperation rather than competition. Employees at Nokia lack motivation and morale to develop any new products.

5.1 Lack of motivation

Jie gao, a team leader of Nokia Beijing headquarters, said, some employees in Nokia were really busy, but some employees did not have any pressure. Many of them can manage their own online store, even selling their goods and communicating with customers at work. All these phenomenon result in social loafing and overstaffing.

Motivation is described as the mental push or pull that stimulates the company's workers towards goals. Employee enthusiasm directly affects an employee’s work input and output. Especially in the kind of volatile global market that companies like Nokia are dealing with. It is important for the employees to be well motivated.

5.2 Solution

Firstly, Nokia should clearly state its objectives and goals. It is also a motivate factory. A clear goal makes employees aware what they should do and encourage employees to work hard for the goal.

Secondly, Nokia should reward employees’ performance. Employees are more likely to maximize their performance when they receive reward for effectiveness. The employees performance directly affect the company's profits.

Lastly, Nokia should provide a suitable climate for the development of employee careers. Promotions should be given on the basis of merit not on the basis of years of service. Only qualified employees should be promoted to leadership and management positions.

6. Conclusion

Founded on May 12 1865, Nokia Corporation once had been the largest mobile phone company and had kept the record of best sale mobile phone for 14 years. Since the appearance of iPhone, Samsung, Sony and other smartphones , Nokia appears a lack of competitive power in the seriously competitive market. In April 2014, Nokia was purchased by Microsoft.

The report focused on analyzing the main problems of Nokia from four fundamental factors: organizational structure, cultural difference, leadership and motivation. The report stated that Nokia has the following problems in the later period: First, the organizational structure of Nokia is unstable and chaotic. Second, there are culture differences in the company and affect management. Third, low consideration and poor decision making are obstacles to Nokia. Last, employees are lack of motivation.

To solve these problems, this report advises that, First, the company should adopt flat management and establish open door policy. Second, the company should understand and make a balance between different cultures. Third, managers should build a good leader-member relationship and focus on transformational management. Lastly, the company should encourage innovation and reward employees’ performance.

Nokia has retired from the mobile phone market officially, but for those mobile phone companies who are eager for a place in the changing market, they should pay attention to their management, innovation and market. No one can be in an impregnable position forever.

【References】

Nokia Corporation Report for Q4 2014 and Full Year 2014 (PDF).