ORGANIZATIONAL CHANGE: A STUDY ON NOKIA

1. PRESENTED BY
ANJU DONY(M150011MS)
DEEPAK VENUGOPAL(M150002MS)
MARIA FRANCIS(M150032MS)
PRAJNA S(M150025MS)

2. Year 2006:
Nokia is on a high. It enjoys 60% share of India's mobile
market and is the undisputed lead.
Year 2007:
June 29
 Apple launches iPhone 3s.
 Redefines smart phone and challenges category leaders
like BlackBerry and Nokia.

3. Year 2008
March
Micromax sets up handset business in India.
September
Samsung launches Omnia.
Becomes dominant in touch
screen phones globally.

4. Year 2009
June
Android enters Indian market with HTC Magic at Rs 29,990.

5. Year 2010
June
 Samsung launched Galaxy S in India at Rs 31,500, its first
smart phone.
 Later, Galaxy-3 (Rs 12,300) & Galaxy-5 (Rs 10,200).
 Samsung's smart phone sales surge.

6. August 30
 Nokia launches C1 & C2—dual SIM phones.
 Nokia market share in India for 2010 (Jan-Sept),
according to IDC, crashes to 32.9%

7. Year 2011
February
 Nokia announces Microsoft patnership, but it takes 8-9 months
to unveil products.
 Meanwhile, Samsung consolidates position while Micromax,
Karbonn, Lava, Spice launch cheaper smartphones.

8. March
 iPhone 4. The iPhone changed the industry in more ways than
one: apps, superlative design and accessories.
 But Nokia is still struggling to find traction with Windows.
June
 Nokia launches dual-SIM phones, becomes no.1 player in this
space, but it is 18 months late. This delay cost Nokia.

9. November
Samsung's Galaxy Note, iPhone 4S launched.
December
 Nokia's Lumia 800 (Rs 29,000)
 Lumia 710 (Rs 19,000) launched.
 Samsung's cheapest Galaxy at `7,830; strengthens position in
the low-end smartphone space.

10. Year 2012
January
Nokia fights back. Launches first Asha, 200 for Rs 4,400. It is its
first QWERTY dual-SIM device. Strong product, but dual-sim
market is past its peak.
June
Full-Touch Asha 305 launched. Nokia claims it's largest-selling
smartphone; but rivals and some tracking agencies don't
consider Asha a smartphone.

11. September
Nokia Market share is 22.2 % and 19.2% in smartphones.
November
iPhone 5 launched.
December
Samsung's India Galaxy sales count crosses 1 crore.

12. Year 2013
Nokia's market share dwindles down to 7-9% as per IDC Asia
Pacific Mobile Tracker in Q4 2012.
March
Lumia 520 (Rs 10,000) launched but Samsung, Micromax move
ahead.

13.  Apple redefined smart phones with touch screen and
Blackberry with email. Android proved that software matters
more than hardware.
 Nokia was slow to respond to these trends.
 In India, local brands stole the lead on dual SIMs, low-end
Qwerty and long-battery-life phones.
 In a nutshell, that's how Nokia, which enjoyed a 60% market
share in India, ended 7-9% as per IDC Asia Pacific Mobile
Tracker in Q4 2012.

14.  In 2008, brands like Samsung, HTC, and Sony found roots
to extend their market.
 Samsung's Android phones are user friendly and budget
friendly too.
 When every manufacturer is busy in making touch screen
mobiles, Nokia felt that touch wouldn't have a scope in
the near future but customers overwrote their
expectations.
 Nokia's entrance into Windows platform is quite late
 Finally Nokia gave up for a 7.1 billion to Microsoft.

15.  The company made the biggest mistake to take a leap of
faith in Windows in 2011. At that point of time, the
company already was in declining condition and trusting
Windows which was new in the field to regain its status
was the biggest mistake the company made.
 All these phones which the company launched were
comparable to other competitor devices but OS was the
problem which lead to ultimate collapse of company.

16. iOS is popular for its
great touch sensitive
interface and
smoothness of
application running
People like user friendly , bug free, touch based operating systems
79.3 %
7% 13%
iOS
Android is regarded as
most user friendly,
universal and easy to
use with nice use of
colored themes
Android
Windows mobile OS
is not much
appreciated by users
and they use it just
because they come
with Nokia
Windows Mobile OS

17. Microsoft’s Acquisition
of Nokia
And the reactions…
The majority believes that tagging with Microsoft
is a wrong decision
55%
4%
41%
0%
Userb Data It will be a
success
It will be a
failure
Uncertain

18.  Stiff competition from Samsung and Apple.
 Lack on focus on innovation was the second big
reason of collapse.
 Nokia seemed to be lagging in the race. Where
Samsung from nowhere entered the race and focused
on innovation as its core competence to gain the
market share, Nokia was very late to realize this fact.

19. 29% 71% 70%
Nokia
Symphony 32%
Samsung 13%
Sony 10%
iPhone and others
16%
Others
Brands
Nokia has lost a huge
portion of its loyal
users
Nokia

21.  Nokia not only failed to realize competition from Apple,
Samsung, Sony, Blackberry in high end smart phones,
they also failed to notice the stiff competition in the lower
segments of phones.
 The company which used to have epic models like
Nokia 1100 suddenly started losing at lower ends too.
 Very lately company realized this thing and launched their
Asha series but by that time they had already lost the
game.

22.  Apple was the first phone to use the strategy of umbrella
branding using iPhone as an umbrella brand and then building
subsequent models each year.
 Samsung was quick in identifying this concept and they started
building their high end phones with Galaxy S series.
 Nokia on the other hand used to have used an umbrella brand
in the N series and recently the Lumia series, but they failed
to create buzz among customers which Apple created.
 The company which is missing the constant innovation has the
high probability of getting punished from the customer.

23. Source: Gartner (2014)
23.9
18.7
3.2
22
19.1
8.3
24.6
13.9
7.5
SAMSUNG NOKIA APPLE
Q3 2011 Market Share 2012 Market Share 2013 Market Share
In the third quarter of 2007, Nokia's market share was 48.7
percent. By the third quarter of 2013 the company's market
share had slipped to just 3.5 percent - Statista,The Statistics
Portal.

24. The Finnish phone maker
launched phones with
innovative features and
different form factors to
quickly respond to the market’s
needs, which led it to become
the largest handset
manufacturer in the world
A glimpse of the factors that are indicators for bringing change
Monopoly
Nokia failed to respond to
growing touch based
smartphones while HTC,
iPhone took the full
advantage
Rise of touch-based
modern smartphones

25. In January 2007,
Apple launched the
iPhone, a
revolutionary
smartphone that
packs with a large
capacitive touch
screen that supports
multi-touch gestures.
Market disruption
brought by the Apple
iPhone
An ex-manager in Nokia estimated
that Nokia used to have over 300
Vice Presidents and Senior Vice
Presidents around the globe
Bureaucracy

26. Resistance to
Change
Inside the
organization:
Employees’ resistance
Outside the
organization :
Markets’ resistance

27. 1.Cultural Effect
Nokia was a Finnish company. Finnish culture does not
promote uncertainity. The employees were not comfortable
with the appointment of a non- finnish CEO. This had
happened first time in the history of the company. Cultural
difference made it difficult for everyone to adjust.
2. Giving up old projects fully
Before 2011, Nokia paired with Intel’s Linux based platform
Memo and Moblin to develop MeeGo. With the new CEO
joining, this project was earlier on hold and later shelved.
Employees had been working on this project and had
invested time and effort. The sudden change was not
welcomed by the employees.

28. 3.New strategy developed without employees concerns
The speed of changes was also a problem. Appointing a
new non-finnish CEO and projects changing,
collaborating companies chaning. In all this,
employees opinion and concerns were over shadowed.
Statements from employees say that MeeGo was a very
feasible project, however, it was cancelled.
4.Waste of existing knowledge
Employees were working on MeeGo and had the
needed expertise. With change in projects, there was a
waste of the knowledge that the programmers already
had. Also new projects and work required the
company to invest in training for new skill.

29. 5. Holding employees responsible
for failure
The CEO’s letter was not
supporting nor calming for the
employees who were in this
turmoil of changes. Elop’s letter
indicated that employees were
themselves the reason for the
downturn of the company.`

31. • Losing job
• Changes in job roleFear of employee
• Holding their excellence as the cause of failure
• Getting into the partnership with Microsoft
Disagreement with
management
• Key personnel
• Skilled employees
• Lay-off by Microsoft
Wave of
resignation
• Uncertainty avoidance
• Masculine vs. FeminineCultural difference

32. • Alliance of Nokia and Microsoft
• Embracing Windows as operating
platform
Customer’s
resistance
• Fear of losing business of international
calling
• Choosing MS as strategic partner
Network operator
and Intel’s resistance
• Principles of open source vs.
proprietary platform
• Decrease in the value of market share
Software developer’s
and shareholder’s
resistance

33.  As Nokia now needs to invest in the cutting edge
technology that is disruptive, it requires new
platforms, more innovation.
 The innovation is needed in its development tools and
to provide developers with incentives.
 The organisation needs to be more open, flexible and
transparent and this is a huge change.

34.  Education and Communication: If Nokia employees
are educated about the change beforehand, then this
will allow them an opportunity to understand as to
why the change is required and hence by educating
and efficiently communicating there will be less
resistance.
 If we involve employees in the change effort then are
more likely to understand the change than to resist it.
 Another way by which the change resistance could be
minimised is by support from managers towards
their staff. By mentoring and supporting during the
change process, managers could help employees deal
with fear and anxiety during a transition period.
`

35.  Nokia managers could reduce resistance
by offering incentives to employees and
the future benefits that the effective change
would bring.
 Another method of combating resistance is
by coercion .Nokia managers could
effectively force employees into change by
making clear that resisting change could
lead to losing jobs and that could be one of
the last resort to strategically manage the
change resistance

36. Stage Interpretation
Denial
Denial is a defensive response. It is the
conscious or unconscious refusal to
accept facts, information or reality
relating to the situation.
Anger
When people deal with emotional upset
they can get angry with themselves or
with other people.
Depression
During periods of change people may
feel there is little purpose in their work
Bargaining People facing change often seek to
negotiate a compromise
Acceptance
Eventually people pass through the
period of depression and begin to
accept the their loss or change in
circumstance.
The Grief Cycle — 5 Stages
of Grief

37. EmotionalResponse
Time
Shock
Denial
Anger
Bargaining
Depression
Test
Acceptance

38.  Awareness
 Desire
 Knowledge
 Ability
 Reinforcement
 The incumbent management
of Nokia would need to be
aware of what the
consequences.
 Need to have long term
thinking rather than short
term thinking.
 Data Driven Decision
making is required to get the
list of expectations and
a clear vision of where to
lead.

39.  Nokia believe that working
with Microsoft, have help
them to excel by leveraging
their expertise in hardware
optimization, software
customization, and language
support.
 Choosing another platform.
 Searching a new market to re-
establish the brand.
 Awareness
 Desire
 Knowledge
 Ability
 Reinforcement

40.  Knowledge of market trends,
shift in user preferences and a
need to offer affordable devices
in various markets.
 Nokia need to lift their
platform with strategic alliance
with Microsoft.
 Need to explore better
platforms.
 Awareness
 Desire
 Knowledge
 Ability
 Reinforcement

41.  Offering employee development
plan such as skills training and
supervisory skills can increase
the ability of workers.
 Nokia can leverage the expertise
of Microsoft in talent
management and employee
performance management.
 Microsoft will provide developer
tools, making it easier for
application developers to
leverage Nokia in global scale.
 Awareness
 Desire
 Knowledge
 Ability
 Reinforcement

42.  Monitor progress, encourage
and direct employees.
 Schedule regular meetings to
discuss how things are going.
Review any quantity and quality
measures that are relevant.
 The higher management needs
to setup mechanisms to keep the
change in place.
 Awareness
 Desire
 Knowledge
 Ability
 Reinforcement

43.  Nokia needs a change, at this present day of all
innovative ideas. There are various models used to
implement change and strategy effectively within an
organization. Most commonly used is Kurt Lewin's
model of change also known as three-step model. Kurt
Lewin's model of change demonstrates planned
change approach. Change at Nokia will be planned
change process developed to get long term effects and
can be mapped with Kurt Lewin's model of change, as
follows;

45.  The advantage you have yesterday, will be replaced by
the trends of tomorrow. You don’t have to do anything
wrong, as long as your competitors catch the wave and
do it RIGHT, you can lose out and fail
 Nokia spent a huge sum in R&D but failed to convert
that research into technology that customers wanted
to buy

46.  Step1: Unfreezing: This is the first step in Lewin's
model of change. It seeks to destabilize (unfreeze) the
statusquo.
 There was a need for change in the strategy,
organizational structure and operations in Nokia.
 The main change that was required was in technology.
 So Nokia basicaly had to sell the idea of a necessary
change to it’s employees

47.  Step2: Transition or Change: This is the second step in
Lewin's model of change. It involves identifying and
evaluating various types of changes and implementing
the necessary change
 According to Kurt Lewin, once the status quo is
unfrozen, a successful change strategy needs to be
implemented, which reduces the resistance.
 Change in Nokia – Training employees was the change
implemented but it was late and inadequate

48.  Step3: Refreezing: "This is third step in Lewin's model
of change. It seeks to stabilize new behaviours.
 After implementation of new strategies, people start
becoming more attuned to new ways of doing things
and these are indications that they are accepting new
strategy. In the meanwhile there is need to stabilize
the environment and to refreeze state.
 In Nokia, Stephen Elop ensured that the changes
implemented were stabilized till achieving long term
results/benefits

49.  Nokia needs a change, at this present day of all
innovative ideas. There are various models used to
implement change and strategy effectively within an
organization.
 Most commonly used is Kurt Lewin's model of change
also known as three-step model.
 Kurt Lewin's model of change demonstrates planned
change approach. Change at Nokia will be planned
change process developed to get long term effects and
can be mapped with Kurt Lewin's model of change, as
follows;

50. Thank you