Nokia Microsoft Report 2022

Running head: NOKIA MICROSOFT
NOKIA MICROSOFT
Name of the student:
Name of the University:
Author Note:

NOKIA MICROSOFT1
Introduction:
The aim of this report is to discuss the actual situation of partnership between Nokia and
Microsoft and how this partnership is bringing positive change in the business of both of these
two companies. This paper will be analyzing the cultural challenges the partnership business is
facing and how these companies will be reviving their places in the market by solving the
cultural issues in the management segment.
Nokia has been in the dominating position during the 1990s to early 2000s due to
extremely overwhelming design of mobile phone and exclusive services. This company had the
reputation of producing high standard and reliable mobile phones for the customers in all over
the world. Despite the fact that the phones of this company were internet enabled and
programmed, it could not survive in the market of the developed countries firstly and then in the
developing markets. Nokia used to provide the best quality production and service but after
Apple introduced iPhone, the trend of using mobile by the customers had changed completely.
The advent of smartphones snatched the mobile market from Nokia and gave all the facilities to
the companies like Apple and Samsung. Nokia with its simple mobile phones could not face this
changing competitive climate hence faced a tremendous failure in the stock market.
The company needed time and effort to understand the current trend of the demands of
the customers so first changed the CEO of the company so that the change in the process can get
fresh air to survive. The company identified the need for increase expertise in the software
system. As Nokia is famous for its exclusive design and hardware, hence it started to depend
upon the partnership with the software expert Microsoft. Nokia with collaboration of Microsoft
and launched Nokia Lumia. This new product however brought fresh impetus in the share but the

NOKIA MICROSOFT2
expectation did not meet properly. This was the question of popularity of both the companies
hence Microsoft directly acquired the mobile phone division of Nokia to compete with Apple
and Samsung. This led Microsoft to acquire the divisions like mobile phones and smart devices,
design team, licensing agreements, and approximately 32,000 new employees of Nokia. This
Nokia-Microsoft partnership had more negative effect rather than positive as more than 20,000
skilled employees of Nokia faced job cuts (Tjemkes, Vos & Burgers, 2017). Within one year,
this partnership was destroyed and Microsoft did not intend to produce any new mobile phone.
The main issue of this partnership failure is however the inability to understand the market trends
but along with this, the company’s inability to manage the cultural differences among the
employees (Dolata, 2017). The cultural barriers of these two companies had led the destruction
of this partnership and eventually the company like Nokia.
Key Management Challenge:
As the national culture directly connects the organizational culture of the companies, the
companies face tremendous pressure in managing the employees with different mindset and
values. According to the Hofstede cultural dimensions different countries have different cultures
and social values that create impact upon the people living there. Hence the companies when
partnering with any other brand form different culture need to have proper understanding of the
values, beliefs and communication system so that the culture does not create impact upon the
successful operation of the companies.
Cultural differences and barriers:
The companies partnering in the mobile phone market here are Nokia and Microsoft.
Nokia hails from Finland and Microsoft from the USA. The first one is a country from Europe
that culturally different from theta of US. This is the reason why the companies fail to create a

NOKIA MICROSOFT3
bond among the employees that reflected in their operation. According to the Hofstede cultural
dimensions, there are six dimensions on which the organizational culture of Finnish company
Nokia and the US based corporation Microsoft contradicted vehemently.
Figure 1. Hofstede cultural dimensions
(Source: Hofstede-insights.com 2019)