R&D expenditure dipped slightly during 2009 by about 1% compared with 2008 figures because of the decline in sales. IvyPanda. The reluctance in the innovation has resulted to Nokia–Apple patent dispute; it has also seen the company become a technology copier (McFarland, Bloodgood and Payan, 2008). Developing new products has its own advantages but moving into new geographical markets can benefit companies from the all important concept of economies of new scale. Retrieved from https://ivypanda.com/essays/nokia-organizational-structure/. The new products are likely to b ea driving force for the company; Apple Inc. with the invention and invention of IPods and I-phones the company was able to control a niche market; a diversion from its main line of business that was desktops and computer software development. Nokia employs 50, 000 people in 120 countries. - Nokia fired a number of R&D employees in order to cut costs as of just weeks ago (Pepin G. 2009). Therefore Nokia as a company does have it own weakness and the weaknesses are as follows. Lean Six Sigma Service Excellence: A Guide to Green Belt Certification and Bottom Line Improvement. In 2014, Nokia employed 61,656 persons all over the world. Get ideas for your own presentations. No plagiarism, guaranteed! Nokia's history dates to 1865, when Finnish-Swede mining engineer Fredrik Idestam established a pulp mill near the town of Tampere, Finland (then in the Russian Empire).A second pulp mill was opened in 1868 near the neighboring town of Nokia, offering better hydropower resources. The company currently enjoys a market share of about 37% and aims at increasing the market share to over 40% by the end of 2011; however, the company is facing a number of strategic issues, which has made its profits and sales reduce in the recent past and overtaken by Apple Inc. products. The case of Nokia is no different the company has successfully established itself as one of the most reliable and advanced manufacturer of mobile devices. Through the 19th century the company expanded, branching into several different products. It is important to note here that because Nokia’s main sales driver is the mobile device market hence there are higher sales potential for Nokia in developing countries. This leadership even gave them the possibility to stay in front of all other competitors during the growing adoption of smartphones. They came up with a smart devices division, mobile phones division, markets division and functional groups. The rising levels of GDP per capita and income levels of people in the developing world are increasing their ability to purchase mobile phones therefore we could see that in the near future major growth would come from developing economies. It was a sudden shift and was done to improve agility. Technologies LLC, a company registered in Wyoming, USA. Though this situation drastically declined during 2008 as the credit crunch forced Nokia to borrow money and bridge the gap between its working capital. For instance the return on equity was around 53% during 2007; that is a phenomenal return for shareholders from a company that competes in such a tough competitive environment. The recent financial crisis which was coupled with economic downturn as well saw most industries and companies experiencing reduced profits or even losses. In 2009, out of the total sales from the company Europe accounted for 36%, China’s share was 16%, Middle East & Africa 14%, North America 5%, Asia-Pacific 22% and Latin America 7%. When managing human resources, managers ensure that they understand the needs of the human resources and their motivations, when they are well managed, they are sources of creativity, innovations and innovation. As previously announced, Nokia agreed to sell HERE, its mapping and location services business, to a consortium of leading German automotive companies. This also explains that as years have passed by liabilities have been increasing used as a way of financing assets. In percentage terms the stock has performed extremely well during the later half of 2007 up to mid 2008; even during the tough times of the late 2009 the stock did better than the overall S&P index. This is IvyPanda's free database of academic paper samples. On the other hand equity has its own advantages such as no finance costs; in case of bankruptcy the claim of common shareholders is last only after other creditors have been paid out. Your privacy is extremely important to us. These matters might include strategic guidelines, approval of periodic plans and decisions on major divestments or investments. 2019. The corporate development department looks for future growth opportunities and it also plans for future strategic actions that will give the company a competitive advantage against competitors. The average basic number of shares during 2009 was 3.705 billion, 2008 was 3.743 billion and 2007 was 3.885 billion. The difference between this navigation process that iPhone will offer is that consumers wouldn’t need to download maps for a price or they would not need automotive navigations systems rather they would use their smart phones as navigation devices at very low rates. Nokia shifted to the matrix structure. Bateman, T. S., & Snell, S. A. professional specifically for you? Had Internal … This report is an analysis of organizational structure of Nokia Phone Company; the report will analyze the current structure of the company and current strategic issues facing the company. "Nokia Organizational Structure." This factor eroded the asset base advantage the company was holding for the previous 4 years before 2008. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. The category structure helped clearly to develop Nokia’s market leadership in these days, as they could precisely meet customer needs. An organizational structure has a total quality approach where all areas of the organization are addressed; despite this totality approach, changes in business environments and industries have sometimes made companies to find their strategies ineffective and irresponsive of current business policies (Wheelen & Hunger, 1998). Problems at Nokia Nokia, considered to be the pioneer in smartphones and a global leader in the mobile phones market, started to face severe challenges to its dominance in the smartphone market in 2007. The impact of the crises were so great that profits before taxes almost decreased by 50% in 2008 from 2007 profits before taxes. This division also provides communications and networks service platforms. Hazard type. focuses on Nokia and aims to find out whether the conclusions of the SOMO report and the publicity that followed afterwards had any harmful effects for the reputation of Nokia among consumers in The Netherlands. It ensures that the business is run in the right way, and thus determines the current as well as the future state of the business (Bateman & Snell, 2011). The Nokia Company is today one of the world’s leading high tech companies. Nokia announces changes in its organization and Group Leadership Team to accelerate the execution of company strategy. It involves developing of new products, mostly related to the product already in the market, it is a method of widening of the range of products (or services), by riding in the strength of an existing brand. It has the mandate of planning, deploying, employing, training, retaining, and dismissal of employees. The structure is only there to ensure that there is good management and processes within the organization are well managed and controlled. Changed the Organizational Structure. Despite the company being the largest phone company in the world, the company is facing a number of strategic issues that if not addr… Chart 2 The structure is only there to ensure that there is good management and processes within the organization are well managed and controlled. Nokia. Structure is only one piece of the puzzle, and it depends on the unique strategy and complexity of each … The renewed governance will expedite decision- making and improve time-to-market of products and innovations, placing a heavy focus on results, speed and accountability. It is a method of optimal brand strength by creating additional sales. Though this cost is offset by the point that today’s financial markets are so dependent on each other that market risks are almost similar in virtually all countries and their stock markets. About 1% of the shares were owned by Nokia Corporation during 2009. There was not much change in the capital structure during the three years apart from a buy-back and cancellation of shares that were owned by the company during 2008 and 2009 respectively. ESPOO (dpa-AFX) - Nokia announced the planned leadership and organizational structure that it intends to implement after and subject to the successful closing of the public exchange offer for Share yours for free! Published: 1st Jan 1970 in Steadily over the years Nokia has moved into new markets which have diversified the portfolio of the company hence spreading the risk over different but related markets. The large number of staffs at Nokia and different management and supervisory levels offers Nokia a tall organizational structure. In the late 20th century, the company took advantage of the increasing popularity of computer and mobile phones. IvyPanda. Nokia’s E-series phones are geared to compete with the Blackberry series. Signal word. It reported annual revenues of around €12.73 billion by conducting sales in more than 151 countries. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Responsible for the operative management of Nokia. As we see from the table that the value declined to 27.5% from 53.9% in 2007. Many are downloadable. Business. NAVTEQ is an important part of Nokia’s operations since it provides downloadable maps and other content that will enhance the experience of consumers who use Nokia’s smart phones. This department also ensures that there is a consistent increase in different services as the market evolves. New York: McGraw-Hill Irwin. This is because countries such as India and China are experiencing large demand for mobile phones due to the rapid growth and development of infrastructure especially network infrastructure. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. We utilize security vendors that protect and The way authority and responsibility is organized at Nokia it shows that the company is exemplary in its approach towards corporate governance. Indicates the potential for personal injury (optional) 2. National culture related to our values held in our deep such as good vs. evil, normal vs. abnormal, rational vs. irrational and safe v. dangerous. December 6, 2019. https://ivypanda.com/essays/nokia-organizational-structure/. Neither the business group nor the horizontal department work independent, however they are interdependent with each other, the following chart shows the companies organizational culture: Each manager or departmental head is responsible for his area and is expected to work for the good of the entire firm. The return on equity declined significantly during 2008. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Nokia Mobile Phones had not been able to develop it’s organizational structures, management systems and competencies to cope with the growth they were going through. ensure the integrity of our platform while keeping your private information safe. The company should be on the high note to have other electronic commodities that can drive the market; the new products that the company can develop include television sets, Radios, laptops, and music equipments. Copyright © 2021 - IvyPanda is a trading name of Edustream This explains how important the development of new products and markets are to companies like Nokia. With the current success in the international markets, Nokia should be thinking of a brand extension approach: brand extension is a marketing tool used to market products using the strength of an existing brand. Nokia’s organizational structure is horizontal and it allows for greater flexibility and speedy communication channels between different departments. A lot of stakeholders were upset and people in top management left the company. The devices unit looks after the development and management of mobile devices portfolio which is targeted at all major consumer segments. “Nokia-Connecting People”: this slogan is known all over the world. "These changes are designed to accelerate the execution of our strategy," said Nokia President and CEO Rajeev Suri. Wheelen, L., & Hunger, J. Many analysts believe that borrowing is a lesser expensive way of raising funds compared to equity as interest paid reduces effective tax rate; secondly creditors do not have a say in the way management runs the business; thirdly no dividends need to be paid out. Nokia announces planned leadership and organizational structure for combined Nokia and Alcatel-Lucent Espoo, Finland - Nokia today announced the planned leadership and organizational structure that it intends to implement after and subject to the successful closing of the public exchange offer for Alcatel-Lucent securities announced on April 15, 2015. The other significant department is Markets which acts like a supply chain department for Nokia. The database is updated daily, so anyone can easily find a relevant essay example. The firm has registered a sale of 30 million Symbian devices back in 2010 whereas only 60,000 phones were sold this time in North America, which was visioned as the key market of Microsoft. Nokia is an international phone company, with its headquarters in Finland. As time goes, the structures of the company are becoming week calling for immediate actions to be taken to retain the glory of the company. ⏰ Let's see if we can help you! It is also a form of increasing Brand Equity. The services department creates and designs internet services that enhance the consumer experience when Nokia phone users interact with the web. Nokia Company Overview. Espoo, Finland - Nokia today announced changes in its organizational structure and Group Leadership Team (GLT), effective from April 1, 2017. Copying files from PC - file structure How do I copy files to the 8.3? Technological firms generally have higher risk attached to their stock prices and market values therefore we expect them to do extremely well when the economy is booming and the company is able to come up with consistent and high quality products. Nokia’s move to enter new markets has been a good way of diversifying business interests in the sense that the company has not only developed new products but it has also moved into new physical markets. The important thing here is that companies like Nokia must be aware of the trade cycles and the economic cycles of the world and individual markets and there relationship between each other because that will determine the impact of raising capital in foreign markets. IvyPanda. This is a prudent approach; secondly if we look at the table below we see that the company has remained profitable despite the financial and economic crisis that plagued the global markets for the past 2 and a half years. What is evident here is that consistently the Nokia stock has out performed the S&P 500 for most of the time period under discussion. Nokia hires from the domestic and international market to ensure that it has the right expertise and have a diverse workforce, with such a people resource the company is able to trade effectively in the local and international markets (Taylor, 2008). The people who helped Nokia to become the best company were no longer there. The main areas that need to be looked into include the strategic alliances division, innovation and invention section of the company, and the organizational culture adopted by the Company. McFarland, R., Bloodgood, J. and Payan, J.(2008). Supply Chain Contagion. 4. the hedging cost is lower or market liquidity is favorable. Nokia Corporation faced stiff competition from Canada based corporations, which were involved in the manufacture of BlackBerry and iPhone. Nokia operates in a highly drastic and technologically changing industry; on the consumer side the company also sees the acceptance and increasing demand for more sophisticated products therefore the company has to remain on its toes and come up with new products and services. December 6, 2019. https://ivypanda.com/essays/nokia-organizational-structure/. The last day of trading of these SDRs was June 1, 2007. Today’s complex, rapidly changing world requires a new operating system that provides organizations with the structures and processes to optimize their current core offerings, as well as the flexibility to develop new processes while responding to market changes. Unlike other Nokias, when I connect this to my PC via USB cable the phone's directory structure does not appear. Need a custom Essay sample written from scratch by If you need assistance with writing your essay, our professional essay writing service is here to help! HERE will continue to operate as a business of Nokia until the sale is completed, but is not included in the planned future organizational structure of Nokia. Free resources to assist you with your university studies! Nokia’s corporate governance practices comply with Finnish laws and regulations, Nokia’s Articles of Association, the Finnish Corporate Governance Code 2020 Raising capital in foreign markets also impacts the market value of the company in a positive way. Ketchen Jr., G., & Hult, T.M. All work is written to order. The company uses derivative financial instruments such as foreign exchange options and forward foreign exchange contracts to manage hedging and reduce the exposure. The new organization structure focused more on power, resources and products. We will write a custom Essay on Nokia Organizational Structure specifically for you for only $16.05 $11/page. New York is the financial capital of the world’s largest economy and having the ability to raise funds in such a market builds great reputation for a company apart from substantial capital. If we closely analyze the net debt to equity ratio for the 5 year period we see that initially in the years 04, 05 06 and even 07 the company had surplus assets over total debt. Our Group Leadership team is responsible for the operative management of Nokia. Nokia’s direct and major competitors include Motorola Inc, Cisco Systems Inc, Research in Motion, LM Ericsson Telephone Co., and QUALCOMM Inc. The Nokia Corporation Annual General Meeting held on May 7, 2013 resolved that no dividend would be distributed for the fiscal year 2012. This is one of the reasons for how internal working affected their company. Corporate governance. 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. The 10 markets from which Nokia generated the highest amounts of sales revenues are listed below in decreasing order; with the highest written first and lowest stated last: China, India, the UK, Germany, the United States, Russia, Indonesia, Spain, Brazil and Italy; when combined these markets provided 52% of the total sales in 2009.