Management and Leadership: Nokia Corporation Case Study

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Updated: Mar 27th, 2024

Introduction

Organizations need qualitative management to optimally utilize their resources. Management is the art of organizing and coordinating activities in accordance to certain principles or policies to attain forethought objectives. Management has the role of utilizing physical, human, financial, and environmental resources effectively for the good of their firms.

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Managerial functions include formulation of corporate functions, organizing, planning, controlling, monitoring, and directing activities to achieve corporate goals and objectives. In contemporary organizational management styles, there has been emphasis on leadership-management approach to managerial-management approach, thought the difference is minimal the net effect is improved competitiveness and efficiency.

This paper differentiates leaders and managers; it will also discuss how leadership shapes organizational culture; to discuss the issues, the paper will use Nokia Corporation as a sample company.

The Difference between Leaders and Managers

The difference between leaders and managers is minimal, however, in contemporary management styles, the difference appears on how they handle situations and the attitude they hold for their works and subordinates. According to Ketchen & Hult, 2006, managers manage, control, monitor tasks through instructions and orders; managers assume the position of authority over subordinates.

The driving force behind managers is to see the attainment of organisational goals. When dealing with subordinates, managers are seen as people who issue instructions and controls the procedure to follow a certain way already predetermined, participation of subordinates in decision-making is minimal.

On the other hand, leaders are defined as the change agents focusing on attaining corporate goals through collective responsibilities and involvement of subordinates in decision making; leaders manage people while managers instruct subordinates (Ketchen & Hult, 2006).

Other than focusing on attainment of corporate goals, leader are highly empowering, supportive and nurturing to their subordinates and uses management policies like delegation to boost confidence among staffs. Managers’ attitude is that tasks must be accomplished irrespective of the way; but leaders have the attitude that the goals should be attained after the people are well managed and guided.

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At Nokia, there has been much emphasis to have leaders as the industry is highly competitive, the quality of the leaders called for are expected to match and outdo those of competitor companies like Apple, Ericson, and Samsung who seem to be driving the market through their innovations.

Currently the company’s management can be termed as managers as they are more concerned on maintaining the company’s competitiveness without much of innovation.

Nokia Corporation Historical Background

The international phone industry is advancing fast with both multinational and domestic companies in the market. Nokia is an international phone company listed in New York Stock Exchange and Frankfurt Stock exchange, with its headquarters in Finland; according to the company’s website, the company in 2010 enjoyed a market share of about 37% and aims at increasing the market share to over 40% by the end of 2011.

It has a strong brand all over the world, the companies positioning statement is “technology connecting people”. The company’s headquarters are located in Keilaniemi, Espoo. Currently it has over 123,000 employees distributed in various countries; it has full operational branch in over 120 countries.

In 2009, the company was able to make a profit of €1.2 billion this was over 10% than what it had recorded the previous year.

In 2010, the company’s operations increased to record a revenue of €42 billion and operating profit of €2 billion; the main driver of this profits are sales of phones, which in 2010, the segment enjoyed an average of 32% of worlds phone market. The idea of the company was started in 1865 however; it became a telecommunication company in 1960’s.

Nokia is an international company that has a simple and straightforward mission statement as “Connecting People”. Its vision statement is “Our strategic intent is to build great mobile products” (Nokia Official website, 2011), this vision statement has more focus on the phone section of the company as the main business segment that the company has.

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The main purpose of the company is “Our job is to enable billions of people everywhere to get more of life’s opportunities through mobile” (Nokia Official website, 2011).

To ensure that the company fulfils its vision, mission and purpose, it operates under marketing values and principles; they include innovation, products development, respect for the people and respect for research and development projects (Nokia Official website, 2011).

The current electronic market is fiancé and competitive, there are number of players in the industry that calls for Nokia to keep changing its operating policies and strategies. It has to keep changing its approach to ensure that it remains competitive.

The main competitors of the company include Samsung, Apple, and Sony-Ericson. To fight the competition, Nokia has engaged in a number of collaborations with other likeminded companies to ensure that it remains competitive. One of the recent strategic alliances that the company has made is strategic partnership with Microsoft to offer the company with the right software to compete effectively.

The drive to remain competitive and offer high returns to the company has made the management to develop new strategies that will see it succeed.

Organizational Managers and Leaders in Creating and Maintaining Healthy Organizational Culture

Nokia management has the role of building, maintaining, and enforcing positive organisational culture within its business; it has embarked on effective communication channels where staffs can share their views, inputs and standpoints with the management when making decisions.

The human resources have enacted policies that have enabled staffs to establish, develop, tap, and explore their talents, skills and intellectualism. The approach of the company is to have an innovative and outstanding teamwork; though the company has a departmental approach, the company ensures that it has teams in all sections that are mandated and empowered to conduct a certain task within the firm.

Change is inevitable at Nokia’s processes and products; the organizational culture adopted ensures that the human resources understands the need to continuous change and supports it accordingly. The structure of the company has some operational values, virtues and management operating ethics, the values are embedded in the company’s philosophy.

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Nokia is divided into four main departments where every department, also called business group, is given some mandate to undertake, the departments are Mobile Phones; Multimedia; Enterprise Solutions and Networks; other than the departments, the company has two horizontal departments as Technology Platforms and Customer and Market Operations.

Neither the business group nor the horizontal department work independent, however, they are interdependent towards each other, the following chart shows the companies organizational culture:

Chart 1

Nokia organizational culture.

Each manager or departmental head is responsible for his area and is expected to work for the good of the entire firm. As strategic tool, Nokia have realized the need to have an effectively managed human capital; human resources are the greatest asset of an organization.

A number of issues that hinder maximum performance of Nokia are evident in the company’s organizational culture, they include; the company does not have a clear division of power in the management, there is not sure way of saying who is supposed to do what (note this is not in all places), this leads to crisis-crossing of management powers.

For example, the marketing department has a marketing research within its frameworks, while the company has a marketing research department.

Strong informal groups operating in the company affect the company’s organizational culture; these groups shape the company’s direction sometimes negatively; for example, they have made protests against some issues in the company in a way that is not ethical or not in line with Nokia conflict resolution structure.

Sometimes the company faces some poor employee relations and work ethic issues, the issues affect the performance of the company.

The Effect of Globalization on Contemporary Management Strategies

In contemporary business environment, there is need to consider the international community when making decisions; since Nokia has an international operation, it has to consider international business environment and its effects on the business.

When managing human resources, a company has to consider human resources diversity issues like multicultural, international human resources legal administration, and employees’ relations.

Globalization has led to improvement of trade among countries, when trade is enhanced, customers are diverse and have varying needs. The management must understand the needs of the diverse customers and make policies that not only address local customer issues but the entire international community.

When making products and choosing the marketing strategy to adopt, the strategy should be internationally accepted, policies that seem to address or sell the products to certain region should not be used. When coming up with products, the company has to consider the divers income among different nations and regions; this creates a wide variety of products that costs differently.

Recommendations to Improve Organizational Culture

When an organization has positive organizational culture, it easily adopts to change, nurture invention and innovation; although Nokia organizational behavior can be applauded, the following strategies can improve the culture, they include:

Team building activities

Occasionally, the company should be having team building exercises; the activities should be organized from section, departments, and eventually the entire organization. When undertaking teambuilding activities, the management should ensure they interact with subordinates at an informal level; this will facilitate communication and sharing of ideas.

Adopt effective communication strategy

Nokia management should enact policies that continually improve communication among staffs and their leaders. With the fast growing technological development, there are new communication policies and channels that the company should adopt and boost its efficiency. In the event that there is some opinion leaders established, the management should address them directly to change their attitude (Bateman & Snell, 2011).

Conclusion

The success of Nokia Corporation in the competitive electronics industry can be attributed to its robust, innovative, and motivated workforce. The company’s management has cultivated a positive organisational culture that nurtures talents, invention and innovation.

Globalisation, international trade and human resources diversity have changed contemporary management strategies where polices are formulated to address issues at the international level. Nokia management appreciates the benefits and challenges brought about by a globalizing world and enact policies that enables it gaining from opportunities mitigate related risks.

References

Bateman, T. S., & Snell, S. A. (2011). Management: Leading & collaborating in a competitive world. New York: McGraw-Hill Irwin.

Ketchen Jr., G., & Hult, T.M. (2006). Bridging organization theory and supply chain management: The case of best value supply chains. Journal of Operations Management, 25(2), 573-580.

. (2011). Nokia: Connecting People. Web.

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IvyPanda. (2024) 'Management and Leadership: Nokia Corporation'. 27 March.

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IvyPanda. 2024. "Management and Leadership: Nokia Corporation." March 27, 2024. https://ivypanda.com/essays/management-and-leadership-the-case-study-of-nokia-corporation-essay/.

1. IvyPanda. "Management and Leadership: Nokia Corporation." March 27, 2024. https://ivypanda.com/essays/management-and-leadership-the-case-study-of-nokia-corporation-essay/.


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IvyPanda. "Management and Leadership: Nokia Corporation." March 27, 2024. https://ivypanda.com/essays/management-and-leadership-the-case-study-of-nokia-corporation-essay/.

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