MGT205 Assignment: Cultural Differences Between Nokia and Microsoft

This report delves into the cultural challenges that undermined the partnership between Nokia and Microsoft. It begins by highlighting the shift in the smartphone market and how the companies identified the need for software expertise, leading to their collaboration. The report explores key management challenges stemming from national culture differences, specifically focusing on the cultural dimensions as defined by Hofstede. It examines differences in power distance, individualism, masculinity, long-term orientation, and uncertainty avoidance, and how these impacted organizational cultures. The report then investigates communication issues arising from language barriers and cultural nuances, followed by an overview of negotiation strategies. The implementation of the partnership and its eventual outcomes are analyzed, along with the success of Microsoft in recent years. The report concludes with recommendations for improved cross-cultural management, emphasizing the need for clear communication, employee appreciation, and training programs.

Cultural
differences
NOKIA AND MICROSOFT

Introduction
 This presentation will be analyzing the cultural challenges the
partnership business usually face leading their failed business
operations.
 The case study is mainly focused upon partnership between
Nokia and Microsoft.
 Through proper initiatyives, these companies will be reviving
their places in the market by solving the cultural issues in the
management segment.

Issues with the companies
 The advent of smartphones after 2000 had shifted focus of the
customers from Nokia and gave all the facilities to the companies
like Apple and Samsung.
 The company identified the need for increase expertise in the
software system so it partnered with Microsoft.
 However this partnership did not sustain in the highly
competitive market of smartphones that led Nokia to leave the
market.

Key Management Challenge
 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.
 Due to this reason, the management of Nokia and Microsoft could
not convince the employees to contribute their skills for
developing the best practices.

Cultural differences and barriers
 According to the Hofstede cultural dimensions,
different countries have different cultures and
social values that create impact upon the
people living there.
 Therefore cultural differences have become
one of the concerning factors for the successful
partnership between Nokia and Microsoft,
 Nokia hails from Finland and Microsoft from the
USA hence the difference is obvious.

Cultural differences and barriers
 These graphs refer to the fact that the culture
of these two countries are completely
different from one another.
 This is reflected in the organizational cultures
of Nokia and Microsoft.
 This is the reason why the companies fail to
create a bond among the employees that
reflected in their operation

Cultural differences and barriers
 In the power distance index, the Finnish employees do not intend
to have centralized power to dominate.
 They are more independent, support equal rights and accessible
superiors.
 This informal attitude towards managers might have created
negative impact upon the US employees and led to clash.
 In the individualism dimension, collaborative and individualistic
outlook and operating methods have created gap among the
employees of Microsoft and Nokia.

Cultural differences and barriers
 In the masculinity dimension, US culture is more masculine
than that of the Finnish one.
 Here US organizational culture is highly competitive where the
people tend to strive in the society on the basis of higher status
(Quinones et al., 2016).
 The goal is to become winner at any cost which contradicts the
organizational culture of the Finnish employees of Nokia.
 In the long term orientation dimension, Microsoft shows
normative outlook where the Americans tend to analyze new
information for checking whether they are true. As opposed to
Nokia’s employees.

Cultural differences and barriers
 In the indulgence dimension, both the countries show similar
score.
 The people in both the countries tend to explore every happiness
in the without controlling their impulses and desires.
 In the uncertainty avoidance dimension also, the
organizational cultures of Nokia and US have shown similarities.
 This is due to the fact that both of these cultures show fair
degree of acceptance for the new ideas, intensions to try
something new and innovative.

Communication Issues
 The cultural diversity makes the communication process more
difficult as the mindset of the employees of the corporation are
different.
 Different cultures lead to have difference in the language,
symbols and signs which may be acceptable to one culture but
not supportive to the other.
 This leads to the development of the ethnocentrisms, opinions
and manners and prejudices.

Communication Issues
 First of all, the issues relate to the language of the
employees having two national background.
 The official languages of Finland are Finnish and
Swedish whereas the US employees talk in American
English.
 This is the reason why there is always a
communication gap among the employees from both
sides which create barrier for a perfect understanding
of the messages (Beugelsdijk, Kostova & Roth, 2017).

Negotiation strategies
 The negotiation is the main process through which the comaies operate
in the international business context.
 The theories of negotiations include decision analysis
 game theory
 behavioral decision making
 negotiation analysis.
 Negotiation analysis is also classified with
 the structural analysis
 process analysis, and strategic analysis
 integrate analysis
 behavioral analysis.

Negotiation strategies contd.
 The structural analysis mainly focuses upon the
perfect distribution of the empowering elements
among the two negotiating parties.
 All the elements constitute structure but have hard
and soft nature that mainly relates to the contracts,
norms and precedents.
 The strategic analysis initiates with the idea that both
of the parties sitting for the negotiation possess Veto
therefore both of these parties can cooperate or
defect (Sandin & Francis, 2018).

Negotiation strategies
 The key challenge is to discover the conditions
for fostering progress towards the solution to
dilemma of balancing desire for agreeing to
come out favorably (Wolf & Alwan, 2019).
 The process of negotiation hence considered
to unfold between the fixed two points,
starting point of discord and end point of
convergence .

Implementation
 The Negotiation process between Microsoft and Nokia was a
difficult one but the implementation is more difficult.
 In the case of Microsoft and Nokia, it was seen that Nokia will be
getting exposure in the smartphone market of it partners with
the company like Microsoft.
 Here the interest of Microsoft was also present because this also
wanted to enter the phone market other than only serving the
computer markets (Tjemkes, Vos & Burgers, 2017).

Microsoft in last 5 years
 The market share and
revenue have grown from
2015 sharply.
 In 2015 revenue was 93.58
billion USD in 2019, it
became 125.84 billion USD.
 The share price was 47.19
billion USD in 2015 and
grew to 158.96 USD in
2019 (Microsoft.com 2020).

Learning
 For the other companies, the partnership between Nokia and
Microsoft is an example.
 Both of these two companies wanted to get into the partnership
for overcoming the competition.
 They were successful to some extent but later ended in ruin.
 The negative aspect was that none of them thought of the
employees and the difference of culture and its impact upon the
successful operation of the companies.

Recommendations
 The credibility is an important area that lessens the
communication gap among the employees making them
convinced to reserve for higher level access and sharing of the
honest discourse for going long way.
 The management needs to clearly articulate the instructions so
that the employees can wind up improvising and become more
productive. This will also reduce the job turnover rates effectively
and reduce communication failure.

Recommendations
 The management of Microsoft needs to
communicate openly and appreciate upon the
overall performance of the employees
 Implement new training system so that the
skills of the employees filtered for innovation
and technological growth.
 Change policies so that the job satisfaction
level goes up in every branches of the
corporation.

References
 Microsoft.com (2020). Microsoft - Official Home Page. [online] Microsoft.com. Available at:
https://www.microsoft.com/en-in [Accessed 6 Jan. 2020].
 Quinones, A. E., van Doorn, G. S., Pen, I., Weissing, F. J., & Taborsky, M. (2016). Negotiation and
appeasement can be more effective drivers of sociality than kin selection. Philosophical Transactions of
the Royal Society B: Biological Sciences, 371(1687), 20150089.
 Sandin, R., & Francis, J. (2018). The Complexity of Executing International Negotiations while Maintaining
Business Ethics-Developing the value-based International negotiation model from an ethical perspective-
the Sanfran Ethical International Business Negotiation Model (SEIB NM): An exploratory case study within
the defence industry.
 Sandin, R., & Francis, J. (2018). The Complexity of Executing International Negotiations while Maintaining
Business Ethics-Developing the value-based International negotiation model from an ethical perspective-
the Sanfran Ethical International Business Negotiation Model (SEIB NM): An exploratory case study within
the defence industry.
 Tjemkes, B., Vos, P., & Burgers, K. (2017). Strategic alliance management. Routledge.
 Wolf, T., & Alwan, M. (2019). Business culture impact upon the individual involving in the international
business negotiation. Marketing, 32(4), 485-486.
 Beugelsdijk, S., Kostova, T., & Roth, K. (2017). An overview of Hofstede-inspired country-level culture
research in international business since 2006. Journal of International Business Studies, 48(1), 30-47.