If you are having troubles with your research paper, I might have a solution for you. The internal ranking of business units, according to growth prospects and financial performance, allowed the change of the corporate business model. The year 2009 saw Nokia laying off 1,700 employees worldwide. Key amongst these decisions was the reallocation of important leadership roles and the poorly implemented 2004 reorganisation into a matrix structure. Nokia's telecom units (especially Mobira/NokiaMobile) demonstrated very strong technological competence in the early 1980s, which raised the probability of business model innovations. While Nokia projected to sell 400,000 units, the series turned out to be a blockbuster with around 20 million handsets sold worldwide. On the other hand, iPhone sales sky-rocketed by around 330% during the same period. Home Dubbed the 5800 Xpress Music, the device was also the first to run the touch-driven Symbian v9.4 (S60 5th Edition). Privacy Then, the difference between success and failure of transformative activities boils down to the firm's ability to change its business model effectively and in rhythm with the dynamics of the external business environment. It had also got rid of much of its diversified structure. The all-in-one phone, which carried a price tag of $800, allowed users to send emails, fax, and browse web, besides offering word processing and spreadsheet capabilities. In 1990’s, Nokia’s top leadership decided to focus solely on the telecommunications market, and as a result, the company’s data, power, television, tire, and cable units were sold off in the first few years of the decade. An organization is defined as an integration of processes with a single purpose; to attain the expected goal of an organization, management needs to develop and effective working organizational structure. Nokia became too controlling and bureaucratic, as a result of its organisational structure and leadership. The following year brought a tough phase for the company as it witnessed sharp drop in profits owing to severe price competition in the consumer electronics markets, and its chairman Kari Kairamo committed suicide reportedly due to stress. The device reportedly had a talk time of 90 minutes and could store 99 contact numbers. Description: The matrix organisation structure is complex but helps in achieving the ultimate goal i.e. This, in turn, created the legitimacy for radical and rapid changes in the respective business models. This round consisted of a set of questions from the topics. Although Elop succeeded in chang ing the Nokia matrix organization structure, his repu tation will be . ; User friendliness – Till date Nokia is remembered with fondness because it was the first mobile phone for many people and it was very user friendly. What form of departmentalization has Nokia relied on throughout most of the past three decades? Espoo, Finland - Nokia today announced changes in its organizational structure and Group Leadership Team (GLT), effective from April 1, 2017. Thus, NokiaCorp95 inherited also the emphasis put on these processes from NokiaMobile87, and further reinforced this emphasis. Anyway, as they say, nothing is permanent and whatever goes up must come down. External triggers for change acted as strong signals for change both at the level of the corporation and at the level of the business units. It was the location of his second mill - on the banks of the Nokianvirta river - that inspired Idestam to name his company Nokia Ab, something which happened in 1871. Gradually, Nokia's strategies also became more technologically oriented and the electronics division, which had been started in a remote corner of the cable factory, became the focus of investment and growth for the entire corporation in the 1980s. For instance, periods of organic growth alternated with spells of frantic M&A activity. It was a solid handset that came in six color variants and had a talk time of the impressive for the time 4- 5 hours. However, at that point in time, Elop rubbished them as “baseless.” Meanwhile, Apple overtook Nokia in smartphone sales in Q2, 2011. In the same year, the company also launched the Nokia 8110 slider phone. 2. Definition: A matrix organisation is a structure in which there is more than one line of reporting managers.Effectively, it means that the employees of the organisation have more than one boss! The same year, the company also launched the Nokia 3650, the first Symbian Series 60 device to appear in the US market. The traditional business units and the newer consumer electronics unit, as well as the complex international structure, were expressly replaced with a focused structure of two business units in the telecommunications product area (Nokia Mobile Phones and Nokia Networks) and regional sales offices abroad. Finally, the year 2013 brought some good news as Nokia returned to profit six quarters of bleeding money. The solutions department ensures that it continuously develops solutions whereby ensuring that a particula… Compare Microsoft Corporation Report contains a full analysis of Microsoft organizational structure. Instagram, © 2000-2021 GSMArena.com Glossary FAQ Business unit level managers perceived important changes in markets and the business environment in general, offering concrete strategic alternatives for corporate headquarters. Animated video illustrating the advantages of a matrix organization; A versatile alternative to the traditionally siloed corporate structure A) functional, B) divisional C) matrix structure. While Nokia may remind most of us of only mobile phones, the company in fact started out as a paper mill, which was established in 1865 by mining engineer Fredrik Idestam at the Tammerkoski Rapids in south-western Finland. Responding to the changes, the Finnish company started churning out both sophisticated multimedia handsets as well as low-end devices. NokiaCorp95 – the corporate business model of the renewed Nokia corporation in 1995. A couple of years ago, Microsoft reached a deal to acquire Nokia's struggling devices and services business, ... the device featured in the popular 1999 science fiction action film The Matrix. 3. Also, the corporate culture changed from a slow-moving conglomerate to a strategically agile and focused telecommunications market leader. Meanwhile, in an effort to save more expenses, the company also announced that it will close its oldest factory in Finland and shift its manufacturing to Asia, which had become its largest market by then - all of this happened in early 2012. While the vertical dimension identifies functions and reporting relationships, the horizontal dimension maps how inputs flow across those functions to create products and services for customers. "Business unit level managers perceived important changes in markets and the business environment in general, offering concrete strategic alternatives for corporate headquarters.". Moreover, the changes in the corporate action patterns were just as dramatic. Let’s start with the first part of SWOT analysis of Nokia which is strengths: 1. The Finnish company’s unwillingness to embrace drastic change when it was required the most was probably the biggest reason that brought the mobile giant down. With Apple launching its first-generation iPhone in 2007 and the growing popularity of touch-screen phones, Nokia outed its first all touch smartphone in 2008. Desperate to come out of the ongoing crisis and better compete with competitors, Nokia announced a strategic partnership with software giant Microsoft to make the latter’s Windows Phone its primary mobile OS. Nokia Corporation is an example of a corporation whose business model has dramatically transformed in the face of changing environmental dynamics. What is more, the technological capability of the middle-level managers allowed divergent actions from official corporate strategy. Structure Nokia functions under a matrix structure . Matrix Management 2.0 is a state-of-the-art, integrated operating system for matrix organizations. A few years later, Nokia launched the world's first international cellular system dubbed Nordic Mobile Telephone network, which linked Sweden, Denmark, Norway, and Finland. In 1991, world’s first GSM call was made by the then Finnish prime minister, Harri Holkeri. This was followed by the launch of the company’s as well as world’s first car-phone dubbed Mobira Senator, which weighed in at around 10 kg. phones for the use of business and phones for the use of governmental authorities, and country- or continent-specific sales organizations. 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. This is a shortened version of “Strategic management of business model transformation: lessons from Nokia”, which originally appeared in Management Decision, Volume 49 Number 4, 2011. Phase II:Machine bureaucracy. Three years later, the company introduced its first compact phone called Mobira Cityman 900, which was also the world's first hand-held mobile telephone. The first fruit the partnership between Nokia and Microsoft bore were the Lumia 800 and Lumia 710 smartphones, which were announced later in 2011. 3. The company took way too long to embrace the smartphone revolution and when it finally did it made way too many errors in its strategy. Organizational structure How individual and team work within an organization are coordinated. In 1996, Nokia 9000 Communicator was launched. Evaluate Nokia's changing organizational structure against the changing characteristics of the external environment over this time. NokiaCorp95 manifested a strategy that relied almost exclusively on organic growth, evident in the corporation's almost non-existent M&A activities during 1993-1997. Between 2001 and 2005, a number of decisions were made to attempt to rekindle Nokia’s earlier drive and energy but, far from reinvigorating Nokia, they actually set up the beginning of the decline. A couple of years later, the company launched its 2100 series of phones, which were also the first to feature the iconic Nokia Tune ringtone. The next year saw the company launching the Nokia 3210. The mid-1990s then saw Nokia thriving with its new focus. At Nokia, the decisive factor behind telecom focus was the fact that the TMT at CHQ in the beginning of the 1990s consisted almost solely of executives with a telecom background. Phone friend is the best option for you. Then the switch to Windows Phone was announced way before there was actual hardware ready - a move that Elop hoped will boost developer interest, but ended up mostly killing Symbian sales 7 months before Nokia had an alternative to offer. In effect, product and operations development became a central function of the whole corporation, much as it had been in NokiaMobile87. A couple of years ago, Microsoft reached a deal to acquire Nokia's struggling devices and services business, and just recently, the Finnish company sold its HERE mapping unit to a group of German car-makers. Nokia’s net sales increased over 50% year-on-year, operating profits shot up nearly 75%, and stock price sky-rocketed a whopping 220%, resulting in an increase of market capitalization from nearly $21 billion to around $70 billion. 1. In September that year, Nokia announced it’s selling its Devices & Services division to Microsoft. Thus, NokiaCorp95 actually inherited both its focused structure and strategy relying on organic growth from NokiaMobile87 (and the related mobile telecom networks unit). The HR practices at Nokia are perfectly found to be aligned with the technological environment as well as the Nokia … Nokia’s Corporate Structure Nokia is a large company with many departments and layers of management. Moreover, the corporate situation was further aggravated by the collapse of the Soviet Union, which suddenly took away a large part of corporate sales to Soviet markets, as well as a severe macro-economic recession in Finland at the beginning of the 1990s. The most notable changes occurred in the period of 1985-1995, when the corporation's market focus expanded from the original focus on paper, rubber, and cable industries to the field of consumer electronics – which was eventually replaced by a focus on mobile telecommunications: mobile telephones and mobile telecommunication networks. More broadly, it may also describe the management of cross-functional, cross-business groups and other work models that do not maintain strict vertical business units or silos grouped by function and geography. It's worth mentioning that the Nokia 6110 was the first phone that came with the classic Snake game pre-installed. Later that year, the company launched Windows Phone 8-powered Lumia 920 flagship, which received mixed reviews - mainly criticized for its large size and bulkiness. News Case Study Questions Response Nokia Corporation has been applying product based organization structure in the past three decades. 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