Change management is a method to change individuals, teams and establishments to an anticipated future state. A proper change management is beneficial only when it needs people throughout an organization to acquire new skills and activities (Gandomaniet al.2013). Nokia from its initial days always ruled the mobile phone manufacturing industry for 14 years Asparaet al. (2013). However, after the introduction of android, Nokia started to lose its grip in the market. Being unwilling to give its throne to Samsung, Apple and other mobile companies, the management decided to enhance its system through organizational change. This study will focus on the process and methods used by Nokia while implementing change in its workplace.
Background to change
In the third quarter of 2007, according to Asparaet al. (2013), Nokia had a market share of 49 percent. By the third quarter of 2013, it slipped to 4 percent as companies such as Samsung, Sony and Apple took over the smart phone industry. Especially, after the launch of android, because of its user friendly attitude, mobile phone users started to ignore other operating systems including iOS. However, Apple managed to survive this change in customer buying behavior. On the other hand, Nokia failed to attract customers to its products as Nokia started to use Windows platform in their mobile phones(Angelini2014). Windows operating system in smart phones was no appreciated at all and that is why, Nokia lost their customer base to android. In order to deal with this situation, the management of Nokia decided to implement a change in the organizational structure of the organization.
Need of change in the organization
After the launch of android platform, even Apple started to feel the pressure from its market rivals. That is why; they launched a revolutionary smartphone that was iPhone, in the year of 2007. Having a large capacitive tough screen that allows multi-touch motions; Apple was able to escape the change in the market. At that time, Nokia joined hand with Microsoft which is considered as a blunder made by Nokia(Angelini2014). In spite of surviving the change, Nokia started to lose its existing customer base and market position. That is when; the management of the company decided to bring a change in the organization.
Change management strategy involving stakeholders
While implementing in the organization, management of Nokia performed several strategic actions. Those actions are hereby mentioned below,
Subcontracting Symbian to Accenture: Nokia decided to not to focus on Symbian platform anymore and Elop outsourced its software growth and provision devices to Accenture(Angelini2014). This was also a cost saving strategy from Nokia as after this outsourcing, nearly 3000 employees were transferred to Accenture.
VendingQt divisions to Digia: Nokia assimilated a cross-platform application establishment framework named as Qt from Trolltech in the year of 2008. This software used to support manifold desktop and mobile functioning systems. It also helped designers to generate set of codes and run it on numerous platforms with least alterations(Singh2014). When Nokia changed its emphasis towards Windows phone platform that demanded totally unlike application framework known as .NET, then the management decided to sell Qt technologies. In the year of 2012, Qt technologies were sold to Digia, a Finnish solutions company.
Vending Vertu to EQT VI: Nokia owned a luxury mobile phone brand named as Vertu which was sold several times pricier that other Nokia phones. This phone had moderate technical specification; however, its style like hardware strategy and the resources that were used to build the phone such as gold and diamond made it a luxury mobile brand (Angelini2014). The management of the organization decided to trade it to a private equity group named EQT VI in order to put more emphasis on the devices targeted at mass marketplaces.
Restructuring of sales team: Nokia was experiencing huge losses in consecutive quarters after the launch of android platform. That is why; it decided to focus on Windows phone. As a result, the organization had to go through major restructuring process including large scale layoffs. Their goal was to make the organizational structure simpler than before by getting rid of the long-suffering administrationproblems(Singh2014). As a part of decision, the management of Nokia closed production lines in Finland, sales offices in China and research and developments departments in Germany and Canada.
The first Windows smart phone was launched in 2011 which were Lumia 710 and Lumia 800. Initially both these products gained traction and became more popular than Windows phone brand. Besides, product growth lifecycle and go-to market period was hurried up meaningfully.
In spite of launching new products under the windows platform, Nokia could not survive the change in buying behavior of the customers. Windows platform was attractive but not as user friendly as Android. If Nokia want to make a comeback in order to regain its market position, then they will have to adopt the android technologies. They will have to make mobile phones with android OS in it. There is no question that Nokia has the ability to innovate and give the android a new look. They must understand that Windows platform will not be able to attract customers (Singh 2014). That is why; another huge change must take place in the organization in order to focus on android technology rather than windows.
In the end, it can be concluded that Nokia did almost everything right while implementing change in their organization. One thing they missed and that became the reason of their downfall. Their decision to tag with Microsoft was a poor decision as windows phones were totally ignored by the customers. Some loyal customers of Nokia tried to adopt but complicated and not so user-friendly attitude of the OS forced them to shift to Samsung or Sony. That is the only reason that Nokia never could regain its market position and brands like Samsung, Sony and Apple took the leading position.
2. Analysis of employee’s resistance
Nokia had formed the partnership with the Linux based platform of Intel Moblin and Memo in order to develop the Meego. However, after the latest joining of new CEO Stephen Elop, suddenly the project got on hold. After passing of little time the project got shelved. He project has been invested with a lot of time and effort from the employee’s part. His particular strategic movement was never received with proper welcome. This particular change management strategy generated a very crucial disagreement as well as animosity among the workforce of Nokia. The employees were transfixed with the unexpected decision and were highly concerned as this movement can cause them their jobs. In order to protest the management decision around a thousand employees walked out from their office as a sign of protest (Angelini2014).
As a Finnish company, Nokia was greatly influenced by the Finnish culture, which immensely hates the uncertainty. In this situation the employees were highly wanted to understand the exact policy of the management so that they can be sure of their position. It has been observed that the CEO of Nokia failed to communicate with the employees with respect to the strategic change. This uncertainty provided an intense sense of risk among the employees, which motivated them to join the protest (Aspara et al. 2013). In addition to that, it has been also identified that the employees did not welcome the appointment of new CEO as he was not Finnish. The appointment of non-Finnish CEO was the first attempt in the Nokia’s history. The employees faced a greater difficulty due to the cultural differences.
Figure 1: Resistance to Change
(Source: Angelini 2014)
In addition to that, it has been also identified that the sudden transitioning decision brought the implication of wasting of the knowledge. As the employees are already were working of the project of Meego platform they were well expertise in their field, the sudden discard of the project put them a position where they have to start afresh. This particular factor raised the chance of protest in a significant fashion. The CEO of Nokia directly blamed the employees for the downfall of the company (Gandomaniet al.2013). Therefore, he was not inclined toward consulting with them regarding the change decision. This particular aspect also maintained a great role in the development of protest and huge wave of resignation among the employees.
Analysis of customer’s resistance
The transitioning decision of Stephen Elop greatly increased the chance of resistance among the target market of Nokia. The customers of the Nokia, who are highly comfortable with the Symbian and Meego platform, did not welcome the rapid transitioning of the organization. The CEO did not focus on the comfort as well as the preference of the regular customer which raised the discontentment among them (Singh 2014). In this situation the customers discarded the brand of the company. The difficulty to use the windows platform caused the instant protest among the target customers.
In this context it has been also observed that the network operators also raised their voice against the transitioning decision of Nokia. Their major concern was that as a product of Microsoft, Skype would have the capability to grasp the market position. The international calls with 3g internet connection were getting a very popular among the customers. Therefore, it is evident that the network operators would lose a significant amount of fund against Skype. That is why the network operators did not encouraged the partnership of Nokia and Microsoft. In this situation, Nokia agreed to discard the involvement of network operators which increased the discontent among the network operators (Angelini2014).
Figure 2: Nokia, Samsung, Apple Sales per quarter
(Source: Gandomani et al.2013)
Another reason that has been identified from the extensive analysis of the change management of Nokia is that the software developers also protested the partnership of Nokia and Microsoft. The software developers had a strong work culture among them which encourage them to welcome the freedom of individual with respect to redistribute modify and access all of the software source codes. They held the belief that the modified code must be considered as the open source (Aspara et al. 2013). Being a destroyer of open source initiatives the Microsoft has always been considered as wicked company among the software developers. In this context the unexpected decision of joining with Microsoft earned a greater displeasure for Nokia.
Strategies to overcome the challenges
First of all I would like to consult with the employees regarding the change decision. I would make active effort to make them accustom with this change. I would reveal the ultimate benefit for them so that they will be encouraged to welcome the change. The proper training as well as motivational factors will eventually be able to any kind of animosity among the employees. As a next step I would like to focus on overcoming the discontent of the customers. I would arrange regular as well as detailed promotional activities so that they are aware of the benefits of new product (Gandomaniet al.2013). I would create a growing likelihood of the latest product so that the customers would be inclined towards the product. As a next step I would like to involve the network operators so that I would benefit from their resources. I would have revealed their potential benefit so that they would agree to join the project.
In addition to that, it is evident that without the involvement of software developers this project is highly challenging. Being a new product in the market this crucial risk has the ability to hinder the growth of the company. I would have encouraged the software developers to actively participate in the project as open source (Singh 2014). These particular strategies would have changed the current scenario and provided a most impressive opportunity of success for Nokia.
Angelini, M., 2014. Business model analysis in the fast-evolving mobile phone market: the Nokia case.
Aspara, J., Lamberg, J.A., Laukia, A. and Tikkanen, H., 2013. Corporate business model transformation and inter-organizational cognition: the case of Nokia. Long Range Planning, 46(6), pp.459-474.
Gandomani, T.J., Zulzalil, H., Ghani, A.A.A. and Sultan, A.B.M., 2013. Towards comprehensive and disciplined change management strategy in agile transformation process. Research Journal of Applied Sciences, Engineering and Technology, 6(13), pp.2345-2351.
Singh, N.P., 2014. Microsoft Acquired Nokia in Unipolar Operating System Market. Independent Journal of Management & Production, 5(3), pp.598-622.