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.