Strategic Operations Management Nokia Strategy

Question: Describe about the Strategic Operations Management for Nokia Strategy. Answer: Introduction This paper discusses how Nokia went through an organizational change strategy that enabled them find the success of adopting the windows phone platform. The paper analyzes some of the change strategy issues like resistance from stakeholders, conflict with the newly appointed CEO, the waves of resignation and cultural conflict that played during this strategic change(Nokia, 2016). The paper will also discuss marketing issue that included customer resistance, Intels response, network operator resistance and software development challenges. At the end, the paper will discuss ways that Nokia could have overcome some of the challenge that it faced during this time of strategic change. Background Nokia is one of the oldest company in the world. The company began in 1865 as a single paper mill operator by a Finnish Engineer Fredrik Idestam who set up the initial wood pulp mill in Southern Finland. At this, the first foundation of Nokia was layed(Anon., 2016). There are several strategic phases that the company went through and in in 1960 Nokia was a conglomerate which comprised of forestry, rubber, cable, power generation and electronics business. This resulted from a merger of Idestams Nokia AB and the Finnish Cable Works limited, a power cable and telephone producer which was founded in 1912 among other businesses. Through its different strategic journey the Finnish based company has since great geographical rise, from a Finnish focused company until the 80s when it began to experience a European and Nordic presence to becoming an bonafide European company in the 1990s(Nokia, 2016). By this time, Nokia became a multinational company with special focus on mobile and telecommu nication technology. Nokia entered the mobile phone market in the 1980s, by 1990s Nokia corporation launched phones with innovative features among other unique form factors that quickly respond the needs in the existing markets that led it to become one of the largest in the world. The company later on adopted different strategic changes. The nature of changes also affected the company on a larger or smaller scale. It also had an effect on the company operations which are provide in the next sections. Unfortunately, even with new changes, Nokia continued to experience a downturn in sales. Some of the changes proposed for the company included: Aiming to attain volume and value in growth through connecting the company with internet developing markets by the introduction of Nokia Windowss phone which was done through forming a strategic partnership with Microsoft to build a joint mobile ecosystem(Nokia, 2016). The change was also meant to make a focused investment in the next generation technologies through new leadership. The following sections discusses some of the obstacles with the proposed strategic change at Nokia. Employee resistance to strategic change with the new CEO For most companies, one of the most difficult situations that Executives face is resistance to change. This type of resistance usually take a number of forms that contribute to reduction in the companys output, at this the company is bound to experience a lot of employee turnover or transfers, chronic quarrels, hostility and slowdown at work. In most cases when executive experience this kind of resistance, they will tend to explain by assuming that in is normal for people to be difficult to change(Shilov, 2011). However, this was not the case of Nokia, when they resisted their new CEO Stephen Elop. There was employee protest march that followed this change, where thousands of employees marched out of the multimillion company to participate(ccsoya, 2011). They were not happy with the announcement that due to the change they were going to lose their jobs. This brought about a lot of confusion in the company as many of them did not know the way forward about their job roles(Lunden, 2012 ). During his Tenure, Nokias share are also reported to have fallen by 60% even with the new partnership of Microsoft to produce windows phone. The sales started to collapse from the outdated Symbian system to the untested unknown windows choosing it over the more popular android system that was introduced by google(MarketNews, 2012). The large number of these protesters were involved in the Symbian platform which means they were naturally concerned about the future role in the company immediately the partnership of Nokia and windows was fully integrated in the system(Lawton, 2011). This also meant that a bigger number of these employees would be concerned especially after Stephen Elop announced that there would be remarkable reduction of employees in different departments all over the world, those who would be most affected were the Nokia employees and not those of windows technology(Moore, 2012). According to a report by Reuters, Finlands Economy Minister Maura Pekkarinen advised that the restructuring of Nokia to form partnership with Microsoft was one of the largest structural change that ever affected in Finlands technological platform. After the announcement of the partnership, employees and customers alike were against it. At this time the companys share were reported to flop by 14% in the New York Stock exchange while its partners Microsoft shares only went down by 1%(ccsoya, 2011).(Moore, 2012) At this, most employees felt that the move to partnership was premature and was uncalled for. There was also the challenge of cultural differences during this change moment. The first person to point out cultural issues on organizational change was Hofstede in his theory discussing reasons people respond in different perspective to change management. According to Hofstede (2001), on cultural distance shows measures based on different dimensions of Hofstede that include uncertainty avoidance, power distance, masculinity and individualism (Hofstede, 2001). In the most recent times, Hofstede added another fifth dimension which is the long term orientation. However, this has received less attention when compared with the other four. The change management issue at Nokia is based on cultural differences between the CEOs native country and Finland. This was evident between the Scandinavian and the North American cultures. Especially with regard to the Finnish feminine who have a strong uncertainty and avoidance characteristics, were much underestimated. Elop himself being a Canadian was the first non-Finnish CEO of Nokia since 1896. When Nokia was still dominant in 2010 as the largest private company in Finland. In present times, this has changed and the company has a mix of different cultures with only about half of employees being Finnish(Hofstede, 2001). With reference to Hofstede theory of cultural differences, Finland is known to be a feminine country that has a higher rate of uncertainty and avoidance. In this regard, most employees in Finland would prefer to cooperate, care for the less unfortunate and have equal right to life. Finland people also are not used to many uncertainties about life and ways of life, they are always working hard to make sure that such incidences do not occur. Due to this, the shock of having 1000 of employees layed off due to the partnership with Microsoft did not take the country well. All these incidences were blamed at the new CEO Stephen Elop. By the fact that they walked out of his office and marched out against the announcement showed that, they have a strong issue with uncertainty avoidance(BBC, 2012). In contrast, the country that Elop came from, Canada, it has a strong masculine culture that exercises a lot of individualism with low incidences of uncertainty and avoidance. This meant that Elop was used to a culture that people learnt to take care of themselves and such announcement would be taken though with disregard, but with a lot of strive for better achievements and material compensation. This also shows that Elop and his change management experts, did not take time to learn about the cultural differences of the country and that of his native home or that of United States which is the home of Microsoft. For this reason, is proposals were met with a lot of resistance(Lunden, 2012). Customers Resistance According to Hofstede (2001), change in the organisations operations in the market comes with a lot of cost. It will alter its market and force the company to bring about change in its whole business structure. This will involve redefining jobs roles, cutting down positions and creating new posts. In a huge structure such as that of Nokia, power will also be transferred and change in reporting authorities(Shilov, 2011). Hofstede (2001) adds that any organizational change is there to increase efficiency, performance and profits for the organisations. Change will enable organisations meet their goals and come up with new guidelines to cooperate. In this regard, change will also affect the companys products which eventually affects the demand for these products(Andrews, 2012). In Nokia, after the partnership, they were met with a lot of customer resistance to the new partnership. It is devastating to note that even with the new partnership, the company did not do well in the market as it had not strategies to combat resistance from customers. Nokia supporters and Symbian users in the country were angry about the announcement they did not like the fact that Nokia was changing platforms which had created a lot of loyalty and accrued a huge number of users over the years. The outsider windows platform was seen as the biggest enemy since its offering came with the abandonment of their native MeeGo and Symbian. In addition, the network operators were not easy to change to the Nokia ecosystem due to Skype(Kurri, 2012). This voice application makes customers use internet connection to make national and international calls and is provided by Microsoft(Skype, 2016). They knew that introducing the windows phone in the market would eventually affect their network profits as people would easily communication by the use of Skype application once they are connected to the internet. This would put their internationally calling profits to a high time low. However to counter this, Nokia assured network users that they would allow network operators to include Skype as part of their default application which means it would incur extra charges once a customer used it to make national or international call(Meyer, 2011). With regard to software development for the new Nokia windows phone, the company also encountered challenges. This is because Nokia had been supporter of free and open source software (F/OSS)-Qt for a long time(Kurri, 2012). The application framework was embraced as it shared across the MeeGo and Symb(Ziegler, 2011)ian Both of them being projects that were tested and applied. On the other hand, the Microsoft Windows phone was a very proprietary platform like the Apple iOS which its closed source nature limited the freedom of development and innovation at a high degree(MarketNews, 2012). The Nokia platform had a lot of restriction that just saw many developers for the software application that would be used by the operators walk away. Discussion- Overcoming challenges faced by Nokia CEO Stephen Elop As discussed above, managing change is always a difficult task for any leader and there is not perfect ways that one can introduce change in organisations. However there are several areas that Stephen Elop would have considered to ensure that change was implemented. First, it is important to identify the need for change in the company and find ways to demonstrate why it was necessary for Nokia to make partnership with Microsoft. In this regard, as the CEO, one would have to inform employees and other stakeholders on the need for change in the company. It is important to make sure that they understood this need before change took place. At this, it would be necessary to conduct a cultural and customer loyalty analysis to the brand to know how change would be approached. For example due to the fact that Finnish people are of the uncertainty avoidance culture, as a CEO one would assure them of their Job security among other benefits should one be layed off instead of simply putting down to them(wallstreet, 2011). It would also be important for the CEO to consider training the existing employees on the new windows technologies so that they could be absorbed in the new management structure instead of having staff from Microsoft do the work. It is also important to watch out for staff reaction to weigh whether the new strategic direction is well received or would rather implement the change in another ways(Lunden, 2012). At this, a market analysis is also needed to find how customers would embrace the new product once in the market. If these areas were considered, there would be less resistance to change. 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