Change Management in Nokia

2013
MOUMITA ROY
ROLL- HRM/12/16
PGDM IN HRM
CHANGE MANAGEMENT IN
NOKIA

CHANGE MANAGEMENT IN NOKIA
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By
MOUMITA ROY
ROLL
HRM/12/16
DEPARTMENT
POST GRADUATE DIPLOMA
IN
HUMAN RESOURSE MANAGEMENT
UNDER
Prof.Roma Puri
COURSE COORDINATOR ASHIS MITRA
SITE
NOKIA

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A
C
K
N
O
ACKNOWLEDGEMENT
• ABSTRUCT
• INTRODUCTION
• LITERATURE REVIEW
• OBJECTIVE
• METHODOLOGY
ØANALYSIS
• NOKIA
• CONCLUSION
• LIMITATION
• REFERENCE
THANK YOU

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I AM GRATEFUL TO OUR TEACHERS PROF. ROMA PURI & COURSE
CO-ORDINATOR ASHIS MITRA WHO HAD CONSTANTLY GUIDED ME THROUGH OUT
THE WHOLE PROJECT, WITHOUT WHOM THE PROJECT WOULD NOT BE
SUCCESSFUL.
I ALSO EXPRESS MY THANKS TO THE NOKIA WEBSITE TO COMPLETE THIS WORK.
I ALSO EXPRESS MY THANKS TO THE LIBRARY STAFFS OF COLLEGE FOR THEIR VARIOUS SERVICES
TO COMPLETE THIS WORK.
I EXPRESS MY SINCERE THANKS TO MY FRIENDS FOR THEIR CO-OPERATION AND SUPPORT IN THE
COMPLETION OF THIS WORK.

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ABSTRACT
To understand what organizational change is & how to diagnose & predict
organizational change, I am doing this individual project on “CHANGE
MANAGEMENT IN NOKIA” & also wants to explain the resistance to change
at both the individual & organization level. It was tough job to talk about one
company that did everything as effectively & as well as Nokia did & try to
take it toward where the world was going. To complete this project, I am
illustrating here many of the external & internal forces for change that affect
those organizations. In this project I am going to describes environmental &
internal forces involved in organizational change, identifying of those change
agents & also discussing about forces for change & how those changes were
resisted, & also wants to describe several processes by which those
organizations can be changed. Next, I am going to be introduced how the
processes to diagnose & predict organizational changes & then go on to
examine organizational downsizing & business reengineering. Finally I
discuss the nature of organizational development that was achieved by these
companies.
INTRODUCTION
Way back when, senior executives in large companies had a simple goal for
themselves and their organizations: stability. Shareholders wanted little
more than predictable earnings growth. Because so many markets were
either closed or undeveloped, leaders could deliver on those expectations
through annual exercises that offered only modest modifications to the
strategic plan. Prices stayed in check; people stayed in their jobs; life was
good.
Market transparency, labor mobility, global capital flows, and instantaneous
communications have blown that comfortable scenario to smithereens. In
most industries and in almost all companies, from giants on down heightened
global competition has concentrated management’s collective mind on
something that, in the past, it happily avoided: change. Successful
companies, as Harvard Business School professor Rosabeth Moss Kanter
told in 1999, “a culture that just keeps moving all the time.”
This presents most senior executives with an unfamiliar challenge. In major
transformations of large enterprises, they and their advisors conventionally
focus their attention on devising the best strategic and tactical plans. But to

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succeed, they also must have an intimate understanding of the human side of
change management the alignment of the company’s culture, values, people,
and behaviors to encourage the desired results. Plans themselves do not
capture value; value is realized only through the sustained, collective actions
of the thousands perhaps the tens of thousands of employees who are
responsible for designing, executing, and living with the changed
environment.
Long-term structural transformation has four characteristics:
1. Scale (the change affects all or most of the organization).
2. Magnitude (it involves significant alterations of the status quo).
3. Duration (it lasts for months, if not years).
4. Strategic importance. Yet companies will reap the rewards only when
change occurs at the level of the individual employee.
Many senior executives know this and worry about it. When asked what
keeps them up at night, CEOs involved in transformation often say they are
concerned about how the work force will react, how they can get their team
to work together, and how they will be able to lead their people. They also
worry about retaining their company’s unique values and sense of identity
and about creating a culture of commitment and performance. Leadership
teams that fail to plan for the human side of change often find themselves
wondering why their best-laid plans have gone awry.
No single methodology fits every company, but there is a set of practices,
tools, and techniques that can be adapted to a variety of situations. By using
some tools in a systematic way, executives can understand what to expect,
how to manage their own personal change, and how to engage the entire
organization in the process.
Any significant transformation creates “people issues.” New leaders will be
asked to step up, jobs will be changed, new skills and capabilities must be
developed, and employees will be uncertain and resistant. Dealing with these
issues on a reactive, case-by-case basis puts speed, morale, and results at
risk. A formal approach for managing change beginning with the leadership
team and then engaging key stakeholders and leaders should be developed
early, and adapted often as change moves through the organization. This
demands as much data collection and analysis, planning, and implementation
discipline as does a redesign of strategy, systems, or processes. The change-
management approach should be fully integrated into program design and
decision making, both informing and enabling strategic direction. It should be

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based on a realistic assessment of the organization’s history, readiness, and
capacity to change.
Change management requires both an individual and an organizational
perspective
Individual change management Organizational change
management
Understanding how one person
makes a change successfully
Understanding what tools we
have to help
individuals make changes
successfully
Organizations don't change,
individuals do. No matter how large
of a project we are taking on, the
success of that project ultimately
lies with each employee doing their
work differently, multiplied across
all of the employees impacted by
the change. Effective change
management requires an
understanding for and appreciation
of how one person makes a change
successfully. Without an individual
perspective, we are left with
activities but no idea of the goal or
outcome that we are trying to
achieve.
While change happens one person
at a time, there are processes and
tools that can be used to facilitate
this change. Tools like
communication and training are
often the only activities when no
structured approach is applied.
When there is an organizational
change management perspective, a
process emerges for how to scale
change management activities and
how to use the complete set of
tools available for project leaders
and business managers.
An easy-to-use model for individual change
The first step in managing any type of organizational change is understands
how to manage change with a single individual. In essence, to make a
change successfully an individual needs:
• Awareness of the need for change
• Desire to participate and support the change
• Knowledge on how to change
• Ability to implement required skills and behaviors

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• Reinforcement to sustain the change
• Planning change management activities
• Diagnosing gaps
• Developing corrective actions
• Supporting managers and supervisors
When an organization undertakes an initiative, that change only happens
when the employees who have to do their jobs differently can say with
confidence, "I have the Awareness, Desire, Knowledge, Ability and
Reinforcement to make this change happen.
The 3-phase process gives structure to the steps project teams should take
PHASE 1 - PREPARING FOR
CHANGE
• Change characteristics profile
• Organizational attributes
profile
• Change management strategy
• Change management team
structure
• Sponsor assessment, structure
and roles
PHASE 2 - MANAGING CHANGE
• Communication plan
• Sponsor roadmap
• Training plan
• Coaching plan
• Resistance management plan

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PHASE 3 - REINFORCING CHANGE
• Reinforcement mechanisms
• Compliance audit reports
• Corrective action plans
• Individual and group
recognition approaches
• Success celebrations
• After action review
After discussing above mentioned theory, I can’t think of a better case study
than Nokia. For me research is an essential part of to know about their
advanced business. Nokia is a global brand, a market leader and a firm rich
in heritage. But it is now battling for survival in a strategic crisis caused by
a range of external and internal factors that are core to A2 and similar
business strategy specifications. In this study I have outlined some of the
main strategic issues facing Nokia and linked to recent supporting resources
which I want to mention in this case study.
THE SAD CASE OF NOKIA
Nokia suddenly noticed that they didn’t grasp this shift in power in the
marketplace, & they started to notice that they were steadily making less
money: they found making money more and more difficult. Even market
leaders found it more and more difficult to maintain their leadership position
in the marketplace.
v In 2004, Nokia was the world’s leading maker of mobile phones. They
were powerful. They were rich. They were impregnable. And here they
were living in this marvelous glass castle in their impregnable power
position.
Now a funny thing happened in 2004. A couple of Nokia workers made a
presentation to senior management of Nokia. They said, “We have an
interesting idea. We’ve come up with a new kind of phone. Unlike Nokia’s

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existing phones, it has a big bright color screen. It connects to the Internet
and it doesn’t have a keyboard like Nokia’s current phones. You operate the
phone with your fingers on a touch-screen. We think this could be a really big
idea.”
Nokia’s management looked at this prototype and they said: “That’s
interesting but this would be hugely disruptive to all of our big marketing and
product development plans. Everyone in the organization would object if we
disrupted those plans. And this is risky: it might not even work. So we’re
going to put this on a backburner, and we’ll continue with our big marketing
and product development plans.” And that’s what happened.
And so for the next three years, it looked as though Nokia had made the right
decision. For three years, Nokia and the top executives personally made a
ton of money.
v Then in 2007, something happened.
Out of nowhere, a firm that had never been in the mobile phone market,
Apple produced tith iPhone, a phone precisely the features that Nokia’s
management had opted not to pursue.
It thrilled customers around the world and devastated Nokia’s market share.
And it devastated the share value of Nokia. Since 2004, it has lost 80 percent
of its market capitalization. A catastrophic result.
Now the managers who made that decision in 2004 and some 25,000
employees of Nokia who have lost, or will soon lose their jobs.
This is a bad news for Nokia. So we see that the resistance to change gave
them a great trouble. Let see how can overcome such resistance & become
world’s 2nd largest mobile phone maker through this case study analysis that
I have done in this individual project.
LITERATURE REVIEW
KATRIN SIMO´ N-ELORZ, MIKEL OLAZARAN & ENEKA ALBIZU were worked
on The Reengineering and Organizational Change in Irizar S. Co-op which
describes that the management of change is one of the most frequent
situations for companies. The keys to success or failure are related to
organizational change managerial tools, organizational structure or
leadership and communication. They analyses the management of the

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change made by Irizar. Charismatic leadership and the workers’ commitment
in the project explain the evolution from financial problems to Business
Excellence in 10 years.
Qi Hao, Weiming Shen, Joseph Neelamkavil, Russ Thomas (Institute for
Research in Construction; National Research Council Canada; London,
Ontario) had done a thesis on CHANGE MANAGEMENT IN CONSTRUCTION
PROJECTS to described that how Decisions are made every day in
construction processes based on incomplete information, assumptions and
the personal experience of the construction professionals. In this project
they showed that Project changes and/or adjustments are inevitable as they
are a fact-of-life at all stages of a project’s life cycle. Managing changes
effectively is crucial to the success of a construction project.
They also showed that how Change management in construction requires an
integrated solution to discipline and coordinate the process, as a example
they gives , documentation, drawing, process, flow, information, cost,
schedule and personnel. The construction industrial needs an effective
construction change management process. This paper summarizes various
aspects of the existing construction change management processes.
OBJECTIVE
The purpose of this study is that organizations exist in ever-changing, turbulent
environments and are perpetually confronted by uncertainty. Organizational change
is necessary. However, it still remains the following problems.
• The organization always been forced to change to deal with the environmental
uncertainty.
• Organization, which might also change to survive, cannot continue.
• And also To know the Organizational Change Management and how it work in
an mobile phone manufacturing company & also in a same company which
already exist in every hand of India as well as world i.e., Nokia.
• Organizational Change Management tools are discussed here.
• Explain Organizational Change Management with its force & resistance.
Through this project, we see, how can they move with rapidly changing
times. From Rio de Janeiro to Nairobi, Berlin to Mumbai, mobile technology
is changing their world. How can they make the most of the opportunities in
their everyday lives? How can they keep a sense of identity as societies,
economies and governments change all around the world? They found people
everywhere connected by a shared excitement for its potential.

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METHODOLOGY
From various theory of change management, we can say that there is a close
relationship between organizational changes & development. Even
organizational development is totally depends on the implementation of
necessary theory of change management. Let me give you a case studies as
examples. The total studies are based on secondary data getting from
different website & journal & books of different authors.
So please forgive me if there is any wrong information about the focused
organization.
ANALYSIS
WHY DID NOKIA NEED TO CHANGE?
• Almost everyone who understands the challenges facing Nokia agrees
that change is unavoidable
• Nokia had missed the major change in its market - the Smartphone
revolution
• Nokia had continued to focus on mobile phone devices (hardware)
rather than mobile phone applications (software)
• The product life cycle of Nokia’s products had shortened dramatically
as others (Apple, Google Android) developed Smartphone platforms and

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an associated “ecosystem” of apps. The consumer transition from
traditional mobile phones to smart phones has been dramatic, and
caught Nokia off-guard
• Nokia has faced intense competition from mobile phone producers in
emerging markets who can make fast, cheap handsets at the lower
end of the mobile phone market
• Many in Nokia regret that the business had become too product-led
rather than customer-led; a missed opportunity
• Poor leadership and complacency (bred from success in non smart-
phones)
• The wrong culture over-consensual; lacking innovation and
entrepreneurial spirit
• Complex, overly-bureaucratic organizational structure with poor
accountability
• Nokia had become “clogged with bureaucracy”
• Decisions being made within the firm were often cancelling each other
out!
• A series of committees, boards and cross-functional meetings held-up
decisions
CHANGE MANAGEMENT IN NOKIA CORPORATION
Type
Julkinen osakeyhtiö
(Public)
Traded as
• OMX: NOK1V
• NYSE: NOK
Industry
Telecommunications
equipment
Internet
Computer software
Founded Tampere, Grand Duchy of

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Finland (1865)
incorporated in Nokia
(1871)
Founder(s)
• Fredrik Idestam
• Leo Mechelin
Headquarters Helsinki, Finland
Area served Worldwide
Key people
• Risto Siilasmaa
(Chairman)
• Stephen Elop
(President & CEO)
Products
• Mobile phones
• Smartphones
• Mobile computers
• Networks
Services
Maps and navigation,
music, messaging and
media
Software solutions
Revenue €30.176 billion (2012)
Operating
income
€ 2.303 billion (2012)
Net income €3.106 billion (2012)
Total assets €29.949 billion (2012)
Total equity €8.061 billion (2012)

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Employees 97,798 (2012)
Divisions
Mobile Solutions
Mobile Phones
Markets
Subsidiaries
Nokia Siemens Networks
(50.1%)
Navteq
Website Nokia.com
Nokia Corporation is a multinational communications and information
technology corporation founded in the United States that is headquartered in
Los Angeles, California, United States. Its principal products are mobile
telephones and portable IT devices. It also offers Internet services including
applications, games, music, media and messaging, and free-of-charge digital
map information and navigation services through its wholly owned subsidiary
Navteq. Nokia has a joint venture with Siemens, Nokia Siemens Networks,
which provides telecommunications network equipment and services.
THE NOKIA HOUSE, NOKIA'S HEAD OFFICE LOCATED BY THE GULF OF FINLAND IN KEILANIEMI,
ESPOO, WAS CONSTRUCTED BETWEEN 1995 AND 1997. IT IS THE WORKPLACE OF MORE THAN
1,000 NOKIA EMPLOYEES
At Nokia, They are committed to connecting people. They combine advanced
technology with personalized services that enable people to stay close to
what matters to them. Every day, more than 1.3 billion people connect to one
another with a Nokia device - from mobile phones to advanced smart phones
and high-performance mobile computers. Today, Nokia is integrating its

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devices with innovative services through Ovi (http://www.ovi.com/), including
music, maps, apps, email and more. Nokia's NAVTEQ is a leader in
comprehensive digital mapping and navigation services, while Nokia
Siemens Networks provides equipment, services and solutions for
communications networks globally.
Nokia has around 97,798 employees across 120 countries, sales in more than
150 countries and annual revenues of around €30 billion. It is the world's
second-largest mobile phone maker by 2012 unit sales (after Samsung), with
a global market share of 22.5% in the first quarter of that year. Nokia is a
public limited-liability company listed on the Helsinki Stock Exchange and
New York Stock Exchange. It is the world's 143rd-largest company measured
by 2011 revenues according to the Fortune Global 500.
Nokia was the world's largest vendor of mobile phones from 1998 to 2012.
However, over the past five years it has suffered a declining market share as
a result of the growing use of smart phones from other vendors, principally
the Apple iPhone and devices running on Google's Android operating system.
As a result, its share price has fallen from a high of US$40 in late 2007 to
under US$2 in mid-2012. Since February 2011, Nokia has had a strategic
partnership with Microsoft, as part of which all Nokia smart phones will
incorporate Microsoft's Windows Phone operating system (replacing
Symbian). Nokia unveiled its first Windows Phone handsets, the Lumia 710
and 800, in October 2011. After this move, sales were not impressive and
Nokia made 6-consecutive loss-making quarters from Q2 2011 to Q3 2012.
The Q4 2012 results saw Nokia return to profit generated mostly by Nokia
Siemens Network and helped by the sale of real-estate and the Vertu
business unit. Smartphone sales are still low with only 4.4 million Lumia and
2.2 Symbian sales and the smart devices business unit is still loss making
with a contribution of -264 million Euro to the total operating profit 439
million Euro.
THEIR VISION AND STRATEGY
Nokia’s mission is simple: Connecting People. Their goal is to build great
mobile products that enable billions of people worldwide to enjoy more of
what life has to offer. Their challenge is to achieve this in an increasingly
dynamic and competitive environment.

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Ideas, Energy, Excitement, Opportunities. In today's mobile world, it feels
like anything is possible - and that's what inspires them to get out of bed
every day.
FORWARD-LOOKINGSTATEMENTS
It should be noted that certain statements herein which are not historical
facts are forward-looking statements, including, without limitation, those
regarding:
A) The intention to form a strategic partnership with Microsoft to combine
complementary assets and expertise to form a global mobile ecosystem and
to adopt Windows Phone as their primary Smartphone platform, including the
expected plans and benefits of such partnership;
B) The timing and expected benefits of their new strategy, including
expected operational and financial benefits and targets as well as changes
in leadership and operation structure;
C) The timing of the deliveries of their products and services and their
combinations;
D) Their ability to develop, implement and commercialize new technologies,
products and services and their combinations;
E) Expectations regarding market developments and structural changes;
F) Expectations and targets regarding their industry volumes, market share,
prices, net sales and margins of products and services;
G) Expectations and targets regarding their operational priorities and results
of operations;
H) The outcome of pending and threatened litigation;
I) Expectations regarding the successful completion of acquisitions or
restructurings on a timely basis and their ability to achieve the financial and
operational targets set in connection with any such acquisition or
restructuring; and
J) Statements preceded by "believe," "expect," "anticipate," "foresee,"
"target," "estimate," "designed," "plans," "will" or similar expressions.
These statements are based on management's best assumptions and beliefs
in light of the information currently available to it. Because they involve risks
and uncertainties, actual results may differ materially from the results that
they currently expect.

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THE NEED FOR CHANGE
• Market changes (growth, competitors)
• Political & legal environment
• New business ownership (e.g. after an acquisition)
• New management or leadership (e.g. a new CEO)
• Economic conditions (e.g. downturn)
Identifying the need for cultural change is one thing – actually achieving it is
quite different! There is lots of evidence that changing a business culture is
one of the toughest management challenges.
CHANGES STILL NOW
ALWAYS ADAPTING
v Over the past 150 years, Nokia has evolved from a riverside paper mill
in south-western Finland to a global telecommunications leader
connecting over 1.3 billion people. During that time, we’ve made rubber
boots and car tyres. We’ve generated electricity.
We’ve even manufactured TVs. Changing with the times, disrupting the
status quo – it’s what we’ve always done. And we fully intend to keep doing
it.
THE STORY SO FAR
v In 1865, mining engineer Fredrik Idestam sets up his first wood pulp
mill at the Tammerkoski Rapids in south-western Finland.

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v A few years later he opens a second mill on the banks of the
Nokianvirta River, which inspires him to name his company Nokia Ab in
1871.
How apt that Nokia begins by making paper – one of the most influential
communications technologies in history.
THE GALOSHES REVOLUTION
v But in 1898, Eduard Polón founds Finnish Rubber Works, which later
becomes Nokia’s rubber business, making everything from galoshes to tyres.
Nokia rubber boots become a bona fide design classic, still on sale to this
day – though they no longer make them.
ELECTRONICS GO BOOM
v In 1912, Arvid Wickström sets up Finnish Cable Works, the foundation
of Nokia’s cable and electronics business.
v By the 1960s, Finnish Cable Works – already working closely with
Nokia Ab and Finnish Rubber Works – starts branching out into
electronics. In 1962, it makes its first electronic device in-house: a
pulse analyzer for use in nuclear power plants.
v In 1963, it starts developing radio telephones for the army and
emergency services – Nokia’s first foray into telecommunications. In
time, the company’s MikroMikko becomes the best known computer
brand in Finland. And by 1987, Nokia is the third largest TV
manufacturer in Europe.
THREE BECOME ONE
v Having been jointly owned since 1922, Nokia Ab, Finnish Cable Works
and Finnish Rubber Works officially merge in 1967. The new Nokia
Corporation has five businesses: rubber, cable, forestry, electronics
and power generation. But as the 1980s come into view, it’s an entirely
new industry that makes Nokia a household name around the
world.

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v By the late 1970s and early 1980s it seems everything – from Tom
Selleck’s moustache to JR Ewing’s list of enemies – is seriously big.
And as the mobile communications revolution starts to gather
momentum, the early handsets continue the trend.
The new Nokia Corporation is ideally placed to take a pioneering role in this
new industry, leading the way with some iconic – and by today’s standards,
very large – products.
THE MOBILE ERA BEGINS
v Nokia sets the ball rolling in 1979, creating radio telephone company
Mobira Oy as a joint venture with leading Finnish TV maker Salora.
1981 then sees the launch of the Nordic Mobile Telephone (NMT)
service, the world’s first international cellular network and the first to
allow international roaming.
v The NMT standard catches on fast and the mobile phone industry
begins to expand rapidly. In 1982, Nokia introduces the first car phone
– the Mobira Senator – to the network. That same year, the Nokia
DX200, the company’s first digital telephone switch, goes into
operation.
GOOD ENOUGH FOR GORBACHEV
v In 1984, Nokia launches the Mobira Talkman portable car phone.
Resembling a military field telephone, it’s a fairly cumbersome piece of
kit – but it’s a start.
v Then in 1987, Nokia introduces the Mobira Cityman, the first handheld
mobile phone for NMT networks. Despite weighing in at 800 grams and
a price tag of 24,000 Finnish Marks (around EUR 4,560), it goes on to
become a classic. The City man even earns a nickname, the “Gorba”,
after Soviet leader Mikhail Gorbachev is pictured using one to make a
call from Helsinki to his communications minister in Moscow.
Over the next decade, millions of consumers worldwide enjoy their very own
Gorbachev moment as the mobile revolution takes hold.
v In 1987, GSM (Global System for Mobile communications) is adopted as
the European standard for digital mobile technology. With its high-

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quality voice calls, international roaming and support for text
messages, GSM ignites a global mobile revolution.
As a key player in developing this new technology, Nokia is able to take full
advantage.
A NEW DIRECTION
v On July 1, 1991, Finnish Prime Minister Harri Holkeri makes the world’s
first GSM call, using Nokia equipment.
v And in 1992, Nokia launches its first digital handheld GSM phone, the
Nokia 1011.
That same year, new Nokia President and CEO Jorma Ollila make a crucial
strategic decision: to focus exclusively on manufacturing mobile phones and
telecommunications systems. Nokia’s rubber, cable and consumer
electronics divisions are gradually sold off.
NAME THAT TUNE
v In 1994, Nokia launches the 2100 series, the first phones to feature the
Nokia Tune ringtone. Based on Gran Vals, a classical guitar piece
composed by Francisco Tarrega in the 19th century, it is probably one
of the most frequently played pieces of music in the world. The Nokia
2100 series goes on to sell 20 million phones worldwide. Nokia’s target
had been 400,000.
v 1994 also sees the world’s first satellite call, made using a Nokia GSM
handset.
Hear Gran Vals, the inspiration for the Nokia Tune.
POINT TO BE NOTED
SNAKE BITES
v In 1997, everybody knows their Snake high score. An instant classic,
the addictive game is launched on the Nokia 6110 and by 2010 its
successors are available on an estimated 350 million mobile phones.

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ON TOP OF THE WORLD
v By 1998, Nokia is the world leader in mobile phones. The strategic
decision to focus on telecommunications, plus early investment in
GSM, has paid off.
v Between 1996 and 2001, Nokia’s turnover increases almost fivefold
from EUR 6.5 billion to EUR 31 billion.
And with the new millennium comes a host of new possibilities as the
internet goes mobile…
As the new millennium dawns, everything changes. New technology enables
the internet to go mobile, opening up a world of possibilities for mobile users.
No longer are phones just for phone calls.
MULTI-TASKING MOBILES
v In 1999, Nokia launches the Nokia 7110, a phone capable of
rudimentary web-based functions, including email. Then in November
2001 Nokia launches its first phone with a built-in camera, the Nokia
7650, and in September 2002 its first video capture phone, the Nokia
3650.
v However, it’s when Nokia launches its first 3G phone (third generation),
the Nokia 6650, in 2002 that things really take off. With 3G technology,
phones can now be used to browse the web, download music, watch
TV on the move, and more.
Mobiles will never be the same again.
ONE BILLION AND COUNTING
v In 2005, Nokia sells its billionth phone – a Nokia 1100 – in Nigeria, and
global mobile phone subscriptions pass 2 billion. Two years later,
Nokia is recognized as the 5th most valued brand in the world.
Things have come a long way since Fredrik Idestam opened his paper mill.

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TREADING LIGHTLY
v For years, Nokia has been working to make its business practices and
products as environmentally and socially responsible as possible –
from creating eco friendly handsets and establishing phone recycling
schemes to bringing the benefits of mobility to emerging markets. This
commitment to sustainability is recognized in a number of prestigious
rankings. For example, in 2009 and 2010, the Dow Jones Indexes ranks
Nokia as the world’s most sustainable technology company.
In contrast, Nokia’s position in the mobile market faces its toughest
challenge to date as competition intensifies in the burgeoning Smartphone
segment. Once again, the company’s ability to adapt is put to the test…
v By 2010, having dominated the mobile world for over a decade, Nokia
no longer has things all its own way. In the all-important Smartphone
market, competitors such as the iPhone and Android-based devices
now pose a serious challenge. Clearly, it’s time for a rethink…
The good news is this is nothing new for Nokia. Adapting and transforming
the business, finding innovative ideas and solutions, rolling up their sleeves
and getting on with things: it’s in the company’s DNA.
A FRESH FACE AT THE HELM
v In September 2010, Nokia appoints Stephen Elop as President and
CEO. Formerly head of Microsoft’s business division, following roles at
Juniper Networks and Adobe Systems Inc., Elop has a strong software
background and proven record in change management.
A MEETING OF MINDS
v In February 2011, Nokia announces it is joining forces with Microsoft to
strengthen its position in the Smartphone market. The strategic
partnership sees Nokia smart phones adopting the new Windows 7
operating system, with the Symbian platform gradually being sidelined.
The goal is to establish a third ecosystem to rival iOS and Android.

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“The industry has shifted from a battle of devices to a war of ecosystems.”
Stephen Elop, President and CEO, Nokia
LET BATTLE COMMENCE
v Nokia launches its first Nokia with Windows phones, the Nokia Lumia
800 and the Nokia Lumia 710, in October 2011
KEY CHANGES OF NOKIA
• Finnish conglomerate turned itself into the world’s leading mobile
phone company in the 1990s. So Nokia has already been through one
(successful) change programme, turning itself from an unfocused
conglomerate into a focused mobile phone producer. Can it change
again?
• Global market leader in mobile phones - but not smart phones.
• Still profitable, but revenues under pressure.
• September 2010: Appointed new CEO - Stephen Elop - to drive strategic
change.
PRESIDENT AND CEO OF NOKIA CORPORATION. MEMBER OF THE BOARD OF DIRECTORS
OF NOKIA CORPORATION. NOKIA LEADERSHIP TEAM MEMBER AND CHAIRMAN SINCE
2010. JOINED NOKIA 2010
• February 2011 - Elop issued the famous “burning platform” memo
bluntly explaining the serious strategic challenges facing Nokia.

25 | P a g e
• Elop outlined results of his strategic review on Feb 11, 2011 - making it
clear that Nokia had to undergo a substantial programme of change.
• Elop announced a strategic partnership with Microsoft in March 2011
to jointly develop smart phones using the Windows mobile platform
ditching Nokia’s previous investment in its homegrown Symbian
platform..
• Elop has swept away many elements of Nokia’s previous
organizational structure - a significant process of delay ring.
• Elop has refocused the business on leadership (managers taking
decisions and responsibility) and markets (innovation driven by people
competing in key mobile phone segments).
• Decision-making has been delegated to local/national teams rather
than relying on decisions by an overly-centralized senior management
team.
• Goals and incentives for the senior leadership team are now more
transparent.
• The new strategy brings clarity and a sense of direction to Nokia - but
will it be enough to achieve a successful turnaround?
• During 2012, Nokia has continued to pursue a retrenchment strategy in
the face of rapid declines in sales.
• February 2012, Nokia announced it was laying off 4000 employees to
move manufacturing from Europe and Mexico to Asia.
• March 2012, Nokia announced it was laying off 1000 employees from
its Salo, Finland factory to focus on software.
• June 2012: 10,000 further job losses announced and the closure of
facilities in Finland, Germany and Canada. Job cuts amount to a fifth of
the total employees remaining at Nokia.
• By June 2012, Nokia had lost more than $88bn in market value since
Apple introduced the iPhone in 2007.
CHANGE IN LOGOS
• Nokia Company logo. Founded in Tampere in 1865, incorporated in
Nokia in 1871.

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• Nokia Company logo from 1965.
• The brand logo of Finnish Rubber Works, founded in Helsinki in 1898.
Logo from 1965 to 1966.
• The Nokia Corporation "arrows" logo, used before the "Connecting
People" logo. Used from 1967 until 1991.
• Nokia introduced its "Connecting People" advertising slogan, coined by
Ove Strandberg and used since 1992.
• This earlier version of the slogan used Times Roman SC (Small Caps)
font.
• Nokia's current logo used since 2006, with the redesigned
"Connecting People" slogan.
• This slogan originally used Nokia's proprietary 'Nokia Sans' font,
designed by Erik Spiekermann. This was replaced in 2011 with the
'Nokia Pure' font designed by Dalton Maag.

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• The Nokia Siemens Networks logo since 2007
• Since 2010
CHANGE IN PHONE MODEL
• REDUCTION IN SIZE OF NOKIA MOBILE PHONES

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• THE NOKIA 3310 SOLD BETWEEN 2000 AND 2003,
IS ARGUABLY ONE OF THE BEST KNOWN MOBILE
PHONES
• THE NOKIA N95 SMARTPHONE RELEASED IN MARCH 2007 WAS HUGELY POPULAR
IN ITS DAY. IT IS CONSIDERED AS ONE OF THE BEST-KNOWN SYMBIAN SMARTPHONES.
IT CONTAINS A 5 MEGAPIXEL CAMERA AND SLIDING MULTIMEDIA KEYS. (S60 3RD)
• THE NOKIA N97 SMARTPHONE RELEASED IN JUNE 2009 CONTAINS A SLIDING
QWERTY. (S60 5TH)

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• THE NOKIA N8 SMARTPHONE RELEASED IN SEPTEMBER 2010 IS THE WORLD’S FIRST
SYMBIAN^3 DEVICE, AND THE FIRST NOKIA SMARTPHONE TO FEATURE A 12
MEGAPIXEL AUTOFOCUS LENS. (SYMBIAN^3)
• THE NOKIA 808 PUREVIEW, RELEASED IN FEBRUARY 2012 AS THE LAST SYMBIAN
SMARTPHONE, FEATURES A 41 MEGAPIXEL CAMERA AND A 1.3 GHZ CPU.
• THE NOKIA LUMIA 920, NOKIA'S 2013 CURRENT FLAGSHIP DEVICE.

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• THE NOKIA E55 FROM THE BUSINESS SEGMENT OF THE ESERIES RANGE
• THE NOKIA N900, A MAEMO 5 LINUX BASED MOBILE INTERNET DEVICE AND
TOUCHSCREEN SMARTPHONE FROM NOKIA'S NSERIES PORTFOLIO.
• THE NOKIA LUMIA 920 USING INDUCTIVE CHARGING
STRATEGIC CHANGES
v Build a new winning mobile ecosystem in partnership with Microsoft.

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v Bring the next billion online in developing growth markets.
v Invest in next-generation disruptive technologies.
v Increase our focus on speed, results and accountability.
OPERATIONAL CHANGES
Balancing its investment priorities, Nokia plans to rescale the company by
making additional reductions in Devices & Services. Nokia plans to pursue a
range of planned measures including:
• Reductions within certain research and development projects,
resulting in the planned closure of its facilities in Ulm, Germany and
Burnaby, Canada;
• Consolidation of certain manufacturing operations, resulting in the
planned closure of its manufacturing facility in Salo, Finland. Research
and Development efforts in Salo to continue;
• Focusing of marketing and sales activities, including prioritizing key
markets;
• Streamlining of IT, corporate and support functions; and
• Reductions related to non-core assets, including possible divestments.
Nokia adopted its current operational structure during 2011 and has three
businesses: Devices & Services, Location & Commerce and Nokia Siemens
Networks. As of April 1, 2011, Nokia’s Devices & Services business includes
two operating and reportable segments – Smart Devices, which focuses on
Smart phones and Mobile Phones, which focuses on mass market feature
phones – as well as Devices & Services Other. Devices & Services Other
includes net sales of Nokia’s luxury phone business Virtue, spare parts and
related cost of sales and operating expenses, as well as intellectual property
related royalty income and common research and development expenses.
Location & Commerce focuses on the development of location-based
services and local commerce. NAVTEQ, which Nokia acquired in July 2008,
was a separate reportable segment of Nokia from the third quarter 2008 until
the end of the third quarter of 2011. As of October 1, 2011, the Location &
Commerce business was formed as a new operating and reportable segment
by combining NAVTEQ and Nokia’s Devices & Services social location
services operations. For IFRS financial reporting purposes, Nokia has four
operating and reportable segments: Smart Devices and Mobile Phones within
Devices & Services, Location & Commerce and Nokia Siemens Networks.
Prior period results have been regrouped and recast for comparability

32 | P a g e
purposes according to the new reporting format that became effective on
April 1, 2011 and October 1, 2011, respectively.
As a result of the planned changes announcement, Nokia plans to reduce up
to 10,000 positions globally by the end of 2013. Nokia is beginning the
process of engaging with employee representatives in accordance with
country-specific legal requirements.
According to Elop ----------
"These planned reductions are a difficult consequence of the intended
actions they believe we must take to ensure Nokia's long-term competitive
strength, we do not make plans that may impact our employees lightly, and
as a company we will work tirelessly to ensure that those at risk are offered
the support, options and advice necessary to find new opportunities."
Taking into account these planned measures the company now targets to
reduce its Devices & Services non-IFRS operating expenses to an annualized
run rate of approximately EUR 3.0 billion by the end of 2013. This is an
update to Nokia's target to reduce Devices & Services non-IFRS operating
expenses by more than EUR 1.0 billion for the full year 2013, compared to the
full year 2010 Devices & Services non-IFRS operating expenses of EUR 5.35
billion. This means that in addition to the already achieved annualized run
rate saving of approximately EUR 700 million at the end of first quarter 2012,
the company targets to implement approximately EUR 1.6 billion of
additional cost reductions by the end of 2013.
As part of these planned changes, Nokia will closely assess the future of
certain non-core assets.
DRIVING CHANGE
“Our new strategy is supported by changes in Nokia’s leadership, operational
structure and approach. 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.
Nokia’s strategy is about investing in and ensuring Nokia’s future. “I have
incredible optimism,” said Stephen Elop, Nokia President and CEO, “because
I can see fresh opportunity for us to innovate, to differentiate, to build great
mobile products, like never before, and at a speed that will surpass what we
have accomplished in the past.

33 | P a g e
ISSUES FOR FAILURE
1. Is Elop’s strategic change too late? Will Apple and Google (Android)
have gained too much market share before Nokia can make a success
of its strategic partnership with Microsoft
2. Elop’s background - he is the first non-Finn to run the company in its
145 years of existence (a source of cultural conflict, or an advantage?).
3. Is the crisis at Nokia sufficiently serious / grave to ensure that all
necessary changes (including to the firm’s culture) are made in time?
4. Whether definitive agreements can be entered into with Microsoft for
the potential partnership in a timely manner, or at all, and on terms
beneficial to them.
5. Their ability to continue to innovate and maintain the vibrancy of their
Symbian-based smart phones during the negotiation of the
Microsoft partnership and thereafter.
6. The negotiation and implementation of the Microsoft partnership will
require significant time, attention and resources of their senior
management and others within the company potentially diverting their
attention from other aspects of their business.
7. In choosing to negotiate a partnership with Microsoft and utilize
Windows Phone as their primary Smartphone platform, they may forego
more competitive alternatives achieving greater acceptance and
profitability in the Smartphone market.
8. The Microsoft Windows Phone Smartphone platform may not be
preferred by application developers, content providers and other
partners impairing their ability to build a sufficiently competitive
ecosystem for their smart phones.
9. The Microsoft partnership may not achieve the stated goal of
producing smart phones which are differentiated from those of their

34 | P a g e
competitors and preferred by their customers and consumers in the
expected timeframe, or at all.
10. Their ability to change their business model, way of working and
culture sufficiently to work effectively and efficiently with Microsoft in
order to realize the stated benefits of the partnership in a timely
manner, or at all.
11. Their ability to effectively and smoothly implement their new
leadership and operational structure and to realize the anticipated
benefits in a timely manner.
12. The implementation of the Microsoft partnership and the new
operational structure may cause disruption and dissatisfaction among
employees potentially reducing focus and productivity in some or all
areas of their business; as well as the risk factors specified on pages
11-32 of Nokia's annual report Form 20-F for the year ended December
31, 2009 under Item 3D.
Risk Factors ------- Other unknown or unpredictable factors or underlying
assumptions subsequently proving to be incorrect could cause actual results
to differ materially from those in the forward-looking statements. Nokia does
not undertake any obligation to publicly update or revise forward-looking
statements, whether as a result of new information, future events or
otherwise, except to the extent legally required.
BARRIERS TO CHANGE
Barriers to Change
Traditional and set ways of doing
things
Fear
Loyalty to existing relationships
Failure to accept the need for change
Insecurity
Preference for the existing
arrangements
Different person ambitions
Loss of power
Loss of skills
Loss of income
The unknown
Inability to perform as well in the new
situation
Break up of work groups

35 | P a g e
CHALLENGES FOR CHANGE MANAGEMENT
The nature of the change, coupled with the complexity of the corporate
services implementation, give rise to a range of change management
challenges, including:
• Lack of visible sponsorship. The change is not perceived to be
important or even happening.
• Unclear, ineffective decision-making process. Reduced pace of
implementation; additional cost: time + rework; lack of vision, direction
and focus. Lack of buy-in; other priorities will be made.
• The right people aren't involved. Delayed decision making; no sense of
urgency; rework required by additional resources.
• Failure to remove organizational barriers. Project delays and could
ultimately fail.
• Not anticipating and pro-actively managing people issues. Increased
resistance; attrition; employee relations issues.
• Skills for new/changed jobs or roles are assumed and not
tested/assessed. Training effort insufficient additional effort
required/reduced service level; unmanaged staff expectations.
• Planned organizational rationalization is not achieved. Staffs are
retained without a real need.
• Finance/HR resistant to "letting go" of certain current responsibilities
which may in future be no longer theirs.

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• Reluctance to change behavior. "Temporary" double effort; benefits
aren't reached (as quickly). Underestimating the time and effort
required to "make the change stick."
• Lack of baseline/metrics/system to measure progress (how far have we
got, how far we still need to go?). No clear sense of how much has
been achieved; lack of momentum; project fatigue.
FAIL TO CHANGE IN NOKIA
• New leadership (internal causes of change): an outsider arrives to
shake up the way Nokia does business!
• Retrenchment (closing down Symbian): followed by strategic
partnership with Microsoft (another major internal cause of change)
• Strategic decision-making / corporate planning: Nokia’s decision-
making had become ineffective - too slow; inconsistent
• Technology (Smartphone ecosystems) as a source of change:
consumers no longer buying a handset; they are buying apps that run
on phones
• Culture as a constraint on change management: will Nokia’s
conservative, bureaucratic culture get in the way of rapid, fundamental
change?
• Changes in strategic direction: the change from a focus on products
(phones) to software applications (phone “ecosystems)
• Impact of competition from emerging markets: the effect of faster,
cheaper competitors
• Globalization of markets: Nokia’s new objective of supply “the next 1
billion mobile phone handsets” resulting from rapid demand growth in
emerging economies
• Business and the competitive environment: emergence of stronger,
more successful competitors (Apple, Samsung, RIM, Google, LG)
HOW TO MAKE CHANGE SUCCESSFUL?
Many of these may seem generic, but they have implications for managing a
corporate services initiative.
These include:
• Managing the effective planning of the potential redeployment,
relocation and release of staff.

37 | P a g e
• Scheduling change to minimize the impact on the business units to
enable maintenance of business as usual.
• Ensuring effective transition of individual business units to a new
structure.
• Engaging with impacted staff to involve them in the process of
transition.
• Managing effective two-way communication with all stakeholders
during the change.
• Embedding the cultural change and ways of working associated with a
shift to a more customer-focused support service.
CONCLUSION
The prevailing culture in a business is often challenged by change. Change
may, in fact, be a requirement in order to address:
• Improved business performance
• Declining profits and sales
• Inadequate returns on investment
• Low quality or standards of customer service
PROCESS OF INTEGRATION
• Identify different employee who require training.
• Conduct training needs assessment and skill gap analysis.
• Document requirements for the training team.
• Training development schedule.
• Customized Coaching Plan.
• Prepare managers and supervisors to coach their employees through the
change.
Management
• Initiation
• Planning
• Executing
• Controlling

38 | P a g e
• Closing
•
Reinforcing Changes
• Managing Change-Planning
• Managing Change-Execute
• Preparing for Change
• Closing/Monitoring Change
Fig: implementation of successful factors

39 | P a g e
LIMITATIONS
As stated in the above, the conclusions of this study cannot be generalized
to all industries or corporate sectors & all the data collected from individual
websites of given organization. So the results are restricted to the secondary
data only
REFERENCE
v Organization behavior of Stephen P. Robbins, Timothy A. Judge, Seema
Sanghi, 13th edition.
v Lee, Kenneth (1998). Trouncing the Dow: A value-based method for
making huge profits. McGraw-Hill.
v "Materials and substances". Nokia Corporation.
http://www.nokia.com/environment/we-create/materials-and-
substances. Retrieved 12 August 2010.

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v "Eco declarations". Nokia Corporation.
http://www.nokia.com/environment/we-create/devices-and-
accessories/eco-declarations. Retrieved 27 July 2009.
v "Nokia Remade Concept Phone goes Green". Mobiletor. 9 April 2008.
http://www.mobiletor.com/2008/04/09/nokia-remade-concept-phone-
goes-green/. Retrieved 14 May 2008.
v "Provision of Lawful Intercept capability in Iran" (Press release). Nokia
Siemens Networks. 22 June 2009.
http://www.nokiasiemensnetworks.com/global/Press/Press+releases/ne
ws-archive/Provision+of+Lawful+Intercept+capability+in+Iran.htm.
Retrieved 14 July 2009.
v Kamali Dehghan, Saeed (14 July 2009). "Iranian consumers boycott
Nokia for 'collaboration'". The Guardian (London: Guardian News and
Media Limited). http://www.guardian.co.uk/world/2009/jul/14/nokia-
boycott-iran-election-protests. Retrieved 27 July 2009.
v http://www.hs.fi/talous/Lex+Nokian+käytöstä+ilmoitettiin+ensimmäistä
+kertaa/a1361762941046 .
v Virki, Tarmo (18 January 2010). "SCENARIOS-What lies ahead in Nokia
vs Apple legal battle". Reuters.
http://www.reuters.com/article/idUSLDE60H05R20100118?type=market
sNews. Retrieved 25 January 2010.
v "The war of the Smartphones: Nokia's new patent suit against Apple".
Snartphone Reviews. 6 January 2010. http://pda-phone-
reviews.in/latest-news/nokias-new-patent-suit-against-apple/. Retrieved
25 January 2010.
v "Nokia's Patent Settlement With Apple Won't Help Much". 14 June
2011. http://www.informationweek.com/news/personal-tech/smart-
phones/230600172. Retrieved 29 June 2011.
v Nokia: Is A Slimmed-Down, More Agile Business Starting to Sing? [25
Feb 2013].

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v Nokia and Strategic Change - the Essential A2 Business Case [14 Jun
2012].

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