Project report

PROJECT REPORT
MANAGING CHANGE IN ORGANISATION
NOKIA

CONTENT
 Introduction
 Phases of Nokia
o Phase of success
o Phase of decline
 Nokia and its change management
o Need for Change management
o Change management approach
 POSCRI model
 Reason for failure of change management in Nokia
 SWOT analysis
 Conclusion
 References

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 previous years 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.
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.

PHASES OF NOKIA FROM SUCCESS
TO FAILURE
 SUCCESSPHASE
With a young, united and energetic leadership team at the helm,
Nokia’s early success was primarily the result of visionary and
courageous management choices that leveraged the firm’s innovative
technologies as digitalisation and deregulation of telecom networks
quickly spread across Europe .But in the mid-1990s, the near collapse
of its supply chain meant Nokia was on the precipice of being a
victim of its success. In response, disciplined systems and processes
were put in place, which enabled Nokia to become extremely efficient
and further scale up production and sales much faster than its
competitors.
Between 1996 and 2000, the headcount at Nokia Mobile Phones
(NMP) increased 150 percent to 27,353, while revenues over the
period were up 503 percent.
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.

 DECLININGPHASE
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.
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.
This rapid growth came at a cost. And that cost was that managers at
Nokia’s main development centres found themselves under ever
increasing short-term performance pressure and were unable to
dedicate time and resources to innovation.
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.
Nokia’s fall from the top of the Smartphone pyramid is typically put
down to three factors by executives who attempt to explain it:
1) Nokia was technically inferior to Apple,
2) Its leaders didn’t see the disruptive iPhone coming.

NOKIA AND ITS CHANGE
MANAGEMENT STRATEGIES
 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 think over 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.
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.
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.

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
 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 smart
phone segment could not make an impact is that the internal
communication systems, the issues pertaining to organizational
culture, human resource management, the losing confidence of the
employees on the organization due to the down trend which the
company is facing during the uptrend market scenario.
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.

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.
PROSCIMODEL :
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.
Phase 3: Reinforcing Change
Phase 2: Managing change
Phase 1 : Preparing for change

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.
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.
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

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.
Nokia was trapped by a reliance on its unwieldy operating system
called Symbian. While Symbian had given Nokia an early advantage,
it was a device-centric system in what was becoming a platform- and
application-centric world. To make matters worse, Symbian
exacerbated delays in new phone launches as whole new sets of code
had to be developed and tested for each phone model.
While Nokia posted some of its best financial results in the late 2000s,
the management team was struggling to find a response to a changing
environment: Software was taking precedence over hardware as the
critical competitive feature in the industry. At the same time, the
importance of application ecosystems was becoming apparent, but as
dominant industry leader Nokia lacked the skills, and inclination to
engage with this new way of working.
By 2010, the limitations of Symbian had become painfully obvious
and it was clear Nokia had missed the shift toward apps pioneered by
Apple. Not only did Nokia’s strategic options seem limited, but none
were particularly attractive. In the mobile phone market, Nokia had

become a sitting duck to growing competitive forces and accelerating
market changes. The game was lost, and it was left to a new CEO
Stephen Elop and new Chairman Risto Siilasmaa to draw from the
lessons and successfully disengage Nokia from mobile phones to
refocus the company on its other core business, network infrastructure
equipment
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.
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.

SWOT ANALYSIS OF NOKIA
 STRENGTHS:
 Experience – around 60-70 year of history for Nokia, it has a
fantastic history behind it and it was one of the top brands
selling in the market before the launch of Android or IOS
smart phones.
 Strong financial support for R&D (1.4 billion USD)-Nokia
invested a lot in R& D regularly to maintain its user base and
keep them happy.
 Largest network of selling & distribution – it had fantastic
distribution and reach across countries.
 Strong customer relation – brand loyalty
 Long battery life
 Durability
 WEAKNESS :
 The new E series is a flop
 Low voice quality
 Less stylish in low priced products

 Heavy sets
 Market skimming prices of high sets
 Few customized , operator-specific handsets
 OPPORTUNITIES
 New growth markets
 Other hand held devices
 Well designed and styled sets
 Increase their presence in 4G and 3G
 Improvise on quality of camera
 Mini notebooks
 THREATS :
 Samsung and IPhone –both of them had wiped out Nokia
in 2014 and they will again challenge the phone in 2016 as
well
 China mobiles – made exact copy of several Nokia
phones, literally pushing the phone out of market
 Cheap and wide range models from various Smartphone
manufacturers – Smartphone are the trend right now and
Nokia needs to go along with the trend.

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.
Nokia’s decline in mobile phones cannot be explained by a single,
simple answer: Management decisions, dysfunctional organisational
structures, growing bureaucracy and deep internal rivalries all played
a part in preventing Nokia from recognising the shift from product-
based competition to one based on platforms.

Nokia’s mobile phone story exemplifies a common trait we see in
mature, successful companies: which, over time, results in a decline
of the strategy processes leading to poor strategic decisions. Where
once companies embraced new ideas and experimentation to spur
growth, with success they become risk averse and less innovative.
Such considerations will be crucial for companies that want to grow
and avoid one of the biggest disruptive threats to their future – their
own success.

REFRENCES
 http://atozgossips.com/2016/05/27/the-case-study-of-nokia-
change-management/
 https://knowledge.insead.edu/strategy/the-strategic-decisions-
that-caused-nokias-failure-7766
 https://knowledge.insead.edu/strategy/who-killed-nokia-nokia-
did-4268
 www.marketing91.com/swot-nokia/
 daneillock.com/nokia-cultural-complaceny-and-the-urgency-of-
change-management/
 https://www.nokia.com/en_int
 www.casestudyinc.com/nokia-startegy-india

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