Organization Change and Development

This study material discusses the process of organization change and development, focusing on the case of Nokia Corporation. It explores the problems and opportunities analysis, change intervention strategies, barriers to change, and the need for innovation and culture improvement. The material provides insights into the challenges faced by Nokia and offers solutions to address them.

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Organization Change and Development
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Table of Contents
Introduction.................................................................................................................................................3
Organization problems and opportunities analysis.....................................................................................4
Change intervention that will address the problem....................................................................................7
Barriers to change.......................................................................................................................................8
Lack of employee involvement................................................................................................................9
Poor culture planning..............................................................................................................................9
Shareholders resistance..........................................................................................................................9
Ethical issues.............................................................................................................................................10
Decision-making issues..........................................................................................................................10
Compliance and governance issues.......................................................................................................10
Diversity issues......................................................................................................................................11
Conclusion.................................................................................................................................................11
Bibliography...............................................................................................................................................13

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Introduction
Nokia Corporation or Nokia is a multinational technology, telecommunication, and
consumer electronics company based in Finland. The company was established in 1865 and it
has its headquarters at Espoo in Finland. As of 2017, Nokia had employed about 102,000
workers and had operations in over 130 countries. It also posted revenue of 23 billion Euros in
this period. Nokia is the 415th world largest organization according to revenue measured in 2016
by Fortune Global 500. Nokia has had a huge market share in the mobile phone industries right
from the late 1990s to early 2000s. In 1998, Nokia was the best-selling mobile phone brand in
the world. The profits of the company went up from 1 billion US dollars in 1995 to 4 billion in
2000. When Apple introduces the iPhone in 2007, about half of the world mobile phone market
was controlled by Nokia. One of the main problems that affected Nokia Corporation was its
failure to innovate (Masalin, 2014, pp.70). Apple introduced the smartphone will Nokia was still
stuck in budgetary phones. The quality of high-end devices declined significantly and six years
after the launch of the iPhone, Nokia had lost about 90 percent of its market share (Yun, Won
and Park, 2016, pp.7). The dismal performance by Nokia can be attributed to organization fear
and lack of communication between the management and the staff. After the advent of the
iPhone, the executives were adamant to acknowledged the inferiority of Symbian, Nokia
operating system, and institute organization changes the will increase innovation at the helm of
the company (Van Rooij, 2015, pp.220). Part of this fear was losing existing and potential
investors and shareholders by acknowledging the inferiority of the company to Apple. The
managers also failed to prioritize the critical functions of the company. Instead of allocating
resources for research and development of a new and better operating system, the management
decided to develop products for short-term market demands.

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Organization problems and opportunities analysis
The early success at Nokia was attributed to a young and energetic management team at
the helm during their period of Nokia glory. The team was visionary and leveraged competition
by producing innovative devices and digitalization that spread the Nokia brand across the globe.
However, in the mid-1990s, the constant decline in business operation indicated that the
company was on the verge of being a victim of its own success (Commons, 2018, pp.14). The
core business at Nokia was focused on incremental improvements, and in the year 1996, the
company launched its first smartphone, the communicator, followed by the first camera phone in
2001 (Hornstein, 2015, pp.295). The second generation smartphone by the company was the
popular Nokia 7650 mobile phone. Nokia problems started at the reorganization of the
management matrix in 2004 that saw the departure of key members of the executive team. The
middle managers selected had no capacity to decentralize critical programs. The company was
constantly locked into a never-ending conflict on product development with the managers
struggling to allocate the scarce resources to different functions within the company. This
conflictual culture slowed decision making and decrease employee morale (Vuori and Huy,
2016, pp.40). The managers were no longer tech-savvy or strategic in making innovative
decisions and this resulted in the proliferation of products of poor quality. One of the key
facilitators of the failure in Nokia was its Symbian operating system (Pisano, 2015, pp.50). Even
though the operating system had early given Nokia an advantage, it was a device-centric system
in what was becoming an application-centric world. The operating system was delaying the
release of new phones as the operating system had to be tested with each device and tweaked to
fit the features of the device. For example, in 2009, Nokia had over 60 version of incompatible
Symbian operating system (Leavy, 2014, pp.10). Nokia lacked the critical skills to adapt to the
application centered eco-system. By 2010, it becomes obvious that Nokia had failed to innovate

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to meet the new operating system standards set by Apple. In an attempt to revamp its mobile
phone industry, Nokia sold its phone department to Microsoft and this lead to the culmination of
its woes. This acquisition was met with much resistance from the employees and stakeholders
alike. The following grief model by Elizabeth Kubler-Ross can best describe the resistance
process.
Shock
Many customers and employees felt shocked when Nokia announced the acquisition by
Microsoft and abandon the Symbian platform (Coccia, 2018, pp.442). The stakeholders were
adamant on the usability of the phone and Microsoft operating system.
Denial
The customers, shareholders, suppliers and the employees did not believe the change was
possible. Many questions were posted on the company website.
Anger
Some of the employees boycotted work. There was a protest dubbed ‘#elopocalypse
spread out on Twitter.’ The stakeholders viewed Stephen Elop as a ‘Trojan horse’ from
Microsoft.
Bargaining
When the stakeholders realized that Nokia was serious on the Windows phone
acquisition, some users requested that the application they had bought in the Symbian platform
be transferred to Windows phone (Rivas and Jones, 2014, pp.8). Software developers from
Symbian also pleaded to be allowed to develop windows application.

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Depression
Some consumers at this stage shifted to Android and iOS platforms (Rusko, 2015, pp.30).
Other investors sold their shares and this lead to Nokia shares taking a plunge.
Testing
When the new windows phones, the Lumia 800 and Lumia 710, were introduced to the
market. Some consumers were curious about how they worked (Pai, 2015, pp.278). For example,
at that period Lumia was searched more on the internet than windows phone.
Acceptance
The new OS was more fluid than Symbian. The Lumia phones had a better camera and
were of better quality than the other Nokia phone models. Some Apple and Android users even
shifted to windows phone. For example, the lumia920 was among the most bought phone in
2012.
The need and opportunity for change in Nokia are the best captured in the leaked
‘burning platform memo.’ By CEO, Stephen Elop. According to the memo, Elop noticed that the
company fell behind by not making a critical decision. There was a lot of pressure coming from
Apple, and this disrupted the market completely by innovating a superior smartphone with a
powerful ecosystem (Zafar and Naveed, 2014, pp.238). Apple was producing phones at a very
fast space taking a huge chunk of the market from Nokia. According to Elop, Nokia poured
gasoline to their burning platform by lacking leadership, accountability, and innovation. The
company was not delivering innovation fast enough. The competitors were taking the entire
market share with powerful ecosystem based on superior operating systems. From this Nokia

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need to restructure its leadership and business culture. The company has to shift its focus to the
customer rather than the products. Nokia also lacked innovative culture and the decision made by
the incompetent managers were canceling each other. In identifying the need for change, Nokia
can use the ADKAR change model (Dana, Mukaj and Vishkurti, 2016, pp.875). This model
outlines the movement of strategic decision making in the company and gives attention to goals
and objectives. ADKAR model will enable Nokia to communicate effectively on the change path
it needs to take. The stakeholders will gain an insight into the position the company wants to
take. Nokia should change its leadership structure and allow an easy flow of communication
between departments. Nokia should also communicate the steps it wants to take in introducing
innovation culture at the organization.
Change intervention that will address the problem
Change management is the process of transforming an organization into the desired state.
It enables the stakeholders in the organization to embrace change that is required in the business
operations. Nokia needs to implement various strategies that will address the issue of market
decline (Worley and Mohrman, 2014, pp.220). This includes engaging all the stakeholders of the
company in the decision-making process. Nokia also needs to overhaul its management model to
enforce incremental change in all departments. There is a need for the company to scout for fresh
talent and change its organization to include innovation in its culture. Nokia needs to scrap off
the top-down communication method and employee transformative leadership which will
incorporate the employees in key decision making (Kim, 2015, pp.148). This will lead to
increase morale and satisfaction among the workers as they will feel integral in the organization
decision making. Change management is required in any organization to meet the dynamic
changing environment of the business. There is a need to include proper training when

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formulating change models. The most appropriate change model to institute in Nokia is the J. P
Kotler change management model. This model is also referred to as the eight-step model. In
implementing this model, Nokia has to define steps that the management should take in
instituting change. Nokia should undergo the unfreezing stage whereby, the process and
requirement of change are well explained to the employee and stakeholders and the effect
properly managed by the leadership of the company. The first step in the change implementation
is analyzing the urgency needed to effect change in the organization. This is followed by forming
up of structures that plan the change management effectively. The third step is for Nokia to
create an organizational vision (Laamanen, Lamberg and Vaara, 2016, pp.20). The fourth step is
the communication of the created vision to the stakeholders. This is followed by empowering
people to manage the effect of change. The sixth step involves developing a short term win for
the management to encourage the process of change. The seventh step includes the consolidation
of profits. The final step in this change model is the sustainment of the new change model
implemented.
Barriers to change
By understanding the issues and barriers that impact the implementation of a change
strategy can enable an organization to address the issues and create an effective change strategy.
Organization change at Nokia will help address the stagnation issues facing the company. While
change is necessary, at times it faces some resistance from the stakeholders (Megele, 2014,
pp.3). This is because change is complex, traumatic, and shatters the status quo of how the
organization used to operate. However, no matter the necessity of the change mechanism, it is
difficult for an organization to implement a change model if the barriers exist. It is, therefore,
necessary for any business management to address all the barriers facing a change intervention

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for effective implementation of a change model. Barriers of change at Nokia will create a gap in
the recommended change intervention model and eventually results in negative practices at the
firm. Some of the barriers that I might face in the implementation of the above change model
include
Lack of employee involvement
Most of the employees fear change as it disrupts the status quo in the organization. Most
of the employee view change as an intervention that might impact their working involvement and
results to such fear as job loss. For example, if I introduce the innovative culture at Nokia, some
of the employees might fear to lose their job to more vibrant and qualified individuals. I can
address this issue by ensuring that all the employees are involved in the change process. This is
through giving them platforms to raise their concerns and opinions and giving them, the
assurance that my change intervention is for the greater good of the organization. I will also
provide necessary resources for the change intervention such as training programs to orient them
to the new change model.
Poor culture planning
Poor planning in the implementation of the change mechanism can negatively impact the
change intervention. Some change intervention may affect the culture within the workforce by
not considering the diversity of the workforce. I can break this barrier by not overlooking the
feelings of the workforce. I will ensure I respect the culture of my diverse workforce.
Shareholders resistance
Investors and shareholders provide the capital for the running of the business. Certain
change models such as disruption of the operating system in Nokia and the introduction of a new
system may result in resistance from the shareholders. The shareholders may be concerned about
the fluctuation of the stock price and might view the change model as disruptive to their profit

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gains. I will address this issue by properly analyzing my change model to the shareholders. I will
make sure they understand that the change model is for the alleviation of the status of the
company that will consequently increase the stock price.
Ethical issues
Organizations have to develop ethics and code of conduct that promotes business conduct
and integrity. In my change intervention at Nokia Corporation, good ethical practices will
promote good decision making, compliance, and accommodate diversity for the workforce
(Rizwan, Umair, Fiaz and Rashid, 2014, pp.450). Some of the ethical issues that I may encounter
in the course of the implementation of the change intervention model include;
Decision-making issues
Poor and non-inclusive decision making may results in infringement of employee rights
and the values and the belief of the workforce. For example, the change of leadership structures
at Nokia may require me to lay off of some of the management teams and this may cause trade
union interventions and lawsuits (Winby and Worley, 2014, p.226). To address this, I will
properly explore ethical dilemmas and evaluate different courses of actions. I would test the
change model to ensure fairness in all aspects of the organization.
Compliance and governance issues.
The change strategy may result in the re-evaluation of certain law such as environmental
and employment laws. The new innovative culture may need evaluation to ensure it conforms to
sustainability practices. Some of the non-ethical issues that may arise include copyright
infringements and similarity in operating systems from competing companies. Additionally,
lawsuits may arise due to patent and protecting of intellectual practices. To address this, I will
ensure the new strategy conforms to the established laws. I will promote sustainability by

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ensuring the new model does not cause environmental degradation and it is energy efficient.
Additionally, I will ensure all my employees and management team conduct business in
accordance with policies and regulations.
Diversity issues
There are ethical concerns about diversity at Nokia. Critical concerns were raised
following the appointment of Stephen Elop as the new CEO. Elop is a Canadian and Nokia is a
Finland based company (Lamberg, Laukia and Ojala, 2014, pp.240). Diversity brings a
complexity of culture and this may impact employee relations. To address diversity, I will ensure
equal opportunities for all employees and emphasize values to maximize the potential of every
employee.
Conclusion
The decline of mobile phone productions cannot be captured by single or simple change
management structures. There were various factors that lead to the decline and ultimately poor
performance at Nokia. This included incompetent decisions by the management, dysfunctional
organization structures, deep internal rivalries, and growing bureaucracies. The above problem
identified in Nokia epitomizes common characteristics for many contemporary organizations.
Poor strategic organization models result in a decline in organization performance and poor
employee relations. The advent of vibrant technological companies such as Apple disrupted the
organization performance in Nokia through the integration of a better operating system in the
smartphone industry. The Symbian operating system used by Nokia could not match the efficient
iOS by Apple. Additionally, the acquisition of the mobile phone department by Microsoft further
cemented the woes of the company as it was faced with huge resistance from critical

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stakeholders and consumers alike. The above discussed Kotler change management model can
help Nokia to implement the organizational change by following the critical steps outlined.

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