Change Initiative – Implementation, Evaluation, and Sustainability of Nokia Corporation
Current Issues in Nokia and their Outcomes
With a world market that is more competitive and more globalized, perhaps because of rapid innovation, a majority of companies are either forced to innovate or face liquidation. Although competition cuts across all industries, tech firms are the most affected, meaning that they have to be on their toes in terms of research and development to keep pace with emerging firms or older ones that are increasingly upgrading their services and products. Nokia is one of the oldest and largest firms that has faced stiff competition from new entrants since 2010, especially Apple’s iPhones, Samsung, Huawei, and many other small players. Nokia’s phone division collapsed because of the company’s decision to disregard the changing market demand for easy-to-use and cheaper Android smartphones. By refusing to scrap the old-fashioned Symbian OS, Nokia recorded operating losses of about €487 million in 2011 (Statista, 2020). The company sold to Microsoft its phone division in 2012, a factor that has significantly impacted its net sales and profitability. In 2012, the company recorded sales of €12.71 billion, which is a drop from the €51.06 billion and €50.71 billion it recorded in 2006 and 2007 during its peak years. The company has never recovered from the 2012 shock. In 2019, the company recorded sales of €23.32 billion. Ultimately, Nokia’s phone division was sold to Microsoft in 2013 for a reported $7.2 billion. However, the company can purchase back its phone division from Microsoft and implement some of the changes proposed in this report. Need help with your assignment ? Reach out to us. We offer excellent services.
External and Internal Driving Forces Contributing to the Issues and the People Affected
A combination of external and internal factors significantly contributed to Nokia’s downfall. Internally, because of poor management and leadership, senior leaders failed to lay out effective strategies that could have saved the firm from collapse. According to Lamberg et al. (2019), the company’s dominant leadership style, termed ‘strategic agility’ played a central role in its failure to implement modern technologies, with the management refusing to heed the call of junior staff members to adopt the Android OS but rather opting to stick with the Symbian OS. Nokia’s top leaders lacked unity, strategic sensitivity, as well as resource fluidity. There were fierce internal power wrangles, which resulted in sluggish and regressive decision-making. Externally, increased competition and disruptive technology changed market dynamics against Nokia. Customers were getting tired of Nokia’s old-fashioned Symbian operating system and its applications. Instead, customers were increasingly warming up for Android-powered smartphones and iPhones.
Different stakeholders were heavily affected by the fall of Nokia. Firstly, a huge chunk of employees was dismissed after the company’s fortunes started dwindling. In 2012, the giant tech firm announced the decision to release more than 10,000 employees and close three facilities by 2013 (O’Brien, 2012). Besides, Stephen Elop stepped down in 2013 after the company sold its phone division to Microsoft. Investors also felt the pinch of the firm’s declining fortunes, with share prices falling to $2 in 2012.
The Stakeholders Involved and How They Will Be Affected by the Change Imitative
For Nokia to regain its market share as a big player in the tech industry, prudent measures must be taken using the McKinsey 7S model. The first step, however, will be to buy back its phone division from Microsoft, especially considering that it has been performing poorly since 2013. Different stakeholders will be affected by the new change initiative. The first bunch of people that will be affected will be company employees, who will enjoy job security. By 2013, the organization had closed three phone manufacturing plants and laid off more than 10,000 workers. Investors will also be affected by the new change model, with prices of shares likely to increase beyond the current $2.66 (Yahoo Finance, 2020). Shareholders are also likely to benefit from increased sales and revenues as annual dividends are likely to skyrocket. Suppliers will also have a new lifeline, with the company likely to s
My Role and Responsibility as a Change Leader and the Leadership Theory That Will Be Used to Guide the Change Process
Change leaders play a vital role in ensuring that change initiatives are successfully identified, implemented, supported, and sustained. Therefore, choosing the right leadership theory is a prerequisite because it will serve as a blueprint that guides the change process. In Nokia’s case, the transformational leadership theory will aid in bringing the needed attitude and behavioral change, creating a positive attitude among leaders and employees (Ghasabesh & Provitera, 2017). As a transformational change leader, my support and commitment are central to the achievement of the required change. Therefore, it is my duty and responsibility to act as the firm’s role model by showcasing the right positive attitude and behavior that every leader and employee is expected to emulate. I must also be a motivator by encouraging workers, investors, and the management to trust the change initiative. They need to develop the belief that the firm will soon get better by turning around the losses into profits. Moreover, it is my task to make the right risks and difficult decisions, such as the option to purchase back Nokia’s phone division from Microsoft.
The Change Agents Needed, and Their Roles, to be Recruited in Order to Successfully Implement the Change
Nokia needs several change agents to help it rise again from its knees. Firstly, the company needs a prudent, innovative, straightforward, and forward-looking Chief Executive. I will recruit current CEO Rajeev Suri with a Steve Job-like innovative mind. This will enable the company to focus on developing fresh technologies at all times, without waiting for disruptive technologies from other emergent firms to bring competition. The new CEO must also introduce new Android-powered smartphones to the market. Secondly, I will recruit a new research and development (R&D) team comprising skilled software developers. The company must be able to create new products that compete with Apple, Huawei, Samsung, and other global brands.
Strategies using the McKinsey Model
McKinsey 7S Framework is a tool that was developed by Tom Peters and Robert H. Waterman in the 80s to analyze different types of changes initiated in an organization. The seven Ss are classified into four primary soft S (shared values, staff, style, and skills) elements and three Hard S (systems, strategy, and structure) elements (McDonald, 2014). The following are some of the strategies based on McKinsey’s Framework that Nokia needs to implement to address the current issues. Firstly, the firm must create organizational ‘shared values’ to unite its staff and encourage collaboration, which is one of the reasons the company collapsed between 2010 and 2012. It can do this by creating a vision, mission, and company objectives. Secondly, the firm must employ new experienced and ‘skilled’ ‘staff’ members, including a new CEO and software engineers. The company can also nurture its own ‘skills’ by deciding to train its own workers. Furthermore, the company must introduce a Transformational leadership ‘style’ and ‘strategy’ to replace the current Autocratic, strategic agility model. This will encourage open communication and good decision-making. Lastly, in terms of ‘systems’ and ‘structure,’ Nokia must hire a new R&D team and new software developers to assist in developing new Android-powered smartphones.
Potential Barriers to Change and Possible Ways of Overcoming Them
Planning, initiating, implementing, and sustaining change in an organization is always very difficult because of a few hitches or setbacks. For Nokia, these potential barriers might emanate from internal sources or outside the company. Internally, lack of financing might pose the biggest hurdle as shareholders might refuse to buy back or pump more funds into the phone division, especially considering how the company’s stock prices plummeted in 2012 to about $2, which was a twenty-year low mark. Secondly, the firm might lack the required expertise and skills to develop new Android-powered smartphones, which might have even contributed to the firm’s fall in 2012. Externally, stiff competition from now-established firms like Huawei, Apple, Samsung, and Oppo might impact Nokia’s market penetration and market share. New regulations, especially privacy rules, might derail the creation and operation of the new phone division.
The Evaluation Methods Needed to Determine the Level of Success of the Change Initiative
Different methods can assist in determining whether the new Android-powered phones are successful or not. Ideally, the use of key performance indicators (KPIs) can help Nokia measure whether the new changes are improving the firm’s performance or not. In particular, evaluating sales and marketing metrics, such as market share, customer attrition, as well as quarterly or annual revenues and profits can help the company tell whether the new initiatives are impactful or wasteful (Marr, 2012). For example, in 2019, Nokia recorded annual sales of €23.32 billion (Statista, 2020). It can use this figure to estimate whether or not the new initiatives have improved these sales in 2020 and 2021.
Strategies to Support Change or Continuous Change
According to Ghasabesh & Provitera (2017), creating and implementing change in an organization is not as difficult as sustaining it because employees sometimes can be receptive to the new initiatives, or the structural or management model cannot permit it to thrive. However, Nokia can do certain things to support or sustain the new changes by completely overcoming resistance. Firstly, as a change initiator, I will have to completely understand the source and nature of the resistance, whether employees, managers, or sponsors, before addressing it. Also, and most importantly, before the change is initiated, it is vital to communicate to all employees and stakeholders about the reason and need for change. They must understand that the company needs to return to profitability (Silver et al., 2016). The third way of mitigating resistance is getting everyone involved in the change process as early as enough and often. Also, it is imperative to support the change by giving workers an opportunity to raise their concerns. There is also a need to remain flexible and patient during the change process. Reassuring sponsors and employees is also a prerequisite because they might get worried or concerned during the initial days of the change process.
How the Change Plan Supports the Organizational Mission/Goal, Addresses Stakeholder Concerns, and Will Contribute to Equitable Distribution
By and large, my proposed changes will not only support Nokia’s mission and goal but will also address stakeholder concerns as well as contribute to the equitable distribution of resources in society. Nokia’s mission is to ‘Connect People’ via technology, the internet, and phones (Nokia, n.d.). On the other hand, the primary concern of the firm’s stakeholders is to create sustainable technology that is profitable in the long run. Therefore, reviving Nokia’s phone division will support the company’s mission to ‘connect’ people as well as boost stakeholder interests in boosting annual sales and revenues. Moreover, the firm will contribute to the equity distribution of resources by creating sustainable employment.
References
Ghasabesh, M. S., & Provitera, M. J. (2017). Transformational leadership: Building an effective culture to manage organizational knowledge. The Journal of Values-Based Leadership, 10(2), 1-19. Retrieved from https://pdfs.semanticscholar.org/dd7c/e38da908a1db02d569bb5a7a68b1cc1a8eab.pdf
Lamberg, J., et al. (2019). The curse of agility: The Nokia Corporation and the loss of market dominance in mobile phones, 2003-2013. Journal of Business History,
Marr, B. (2012). Key performance indicators (KPI): The 75 measures every manager needs to know. London: Person UK.
McDonald, D. (2014). The Firm: The Story of McKinsey and Its Secret Influence on American Business. Simon and Schuster.
Nokia. (n.d.). What we do. Retrieved from https://www.nokia.com/about-us/what-we-do/
O’Brien, K. J. (2012 June 14). Nokia to cut 10,000 jobs and close 3 facilities. New York Times, https://www.nytimes.com/2012/06/15/technology/nokia-to-cut-10000-jobs-and-close-3-facilities.html
Silver, S. A., et al. (2016). How to sustain change and support continuous quality improvement. CJASN, 11(5), 916-924. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4858491/
Statista. (2020). Nokia’s net sales from 1999 to 2019. Retrieved from https://www.statista.com/statistics/267819/nokias-net-sales-since-1999/
Yahoo Finance. (2020). Nokia Corporation (NOK). Retrieved from https://finance.yahoo.com/quote/NOK/
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Question 
You will utilize your change model for this assignment. Review the feedback submitted by your instructor on your previous change model assignment. Make any changes or modifications necessary for the submission of this assignment.
Implementation, Evaluation, and Sustainability of Nokia Corporation
Evaluate the performance of your organization or department. Identify an area that would significantly benefit from initiating a change. Write a paper (1,500-1,750 words) in which you describe the particular area you propose to address through a change initiative. Include the following for your company:
1. Discuss the issues in this area and the current outcomes as a result of the issues.
2. Describe the external and/or internal driving forces, contributing issues, and the people affected.
3. Evaluate the stakeholders involved and discuss how they will be affected by your change initiative.
4. Clarify your role and responsibility as a change leader. Discuss the leadership theory (or theories) you will use to guide the change process.
5. Discuss the change agents you need to recruit in order to successfully implement your change. Describe the roles of these change agents.
6. Utilize your change model to develop strategies: (a) Explain the relevance of this model to your organization, and (b) Present the strategic aspects using your model. Be sure to clearly define the purpose of each aspect, the people involved, and the actions that need to be taken.
7. Identify or predict the potential barriers to change. Discuss possible ways to overcome these obstacles, including methods for dealing with emerging or unforeseen circumstances that could impede implementation.
8. Describe the evaluation methods you will use to determine the level of success of your change initiative. Discuss what metrics or measurable determinates you will use.
9. Propose strategies to anchor change or support continuous change.
10. Establish how your change plan supports the organizational mission/goal, genuinely addresses stakeholder concerns, and will serve as an equitable contribution to the community or society overall.