Change and Leadership: Cases Study of Nokia Corporation

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Change and Leadership: Cases Study of Nokia Corporation
Introduction
In the present word, change has become inevitable to individuals, teams, organizations and all
kind of businesses resulting from the rising markets and opportunities caused by globalization
across the business world. Many businesses are embracing change to adapt to the changing
environment and to attain sustainable competitive advantage for their businesses (Anderson &
Anderson, 2010). However, in different organizations, change has proved successful while in
others change has failed. Among the factors determining the success of change in an organization
is the effectiveness of the leadership in place in a given organization. The styles and approaches
of leadership employed in different organization result to change success or failure (Herold et al.
2008). In the recent past, some of the leading corporations in technology underwent significant
change with the aim of adapting to the rapidly changing environment in which the market leaders
including Samsung, Google and Apple among others set the rules through introduction of
innovations that resulted to a long term market change. Among the organizations that struggled
in competing in the market regardless of its many years in leadership in the market was Nokia
(Doz &Kosonen, 2010.). This paper describes the process of change in Nokia in regard to the
launching of the Burning platform memo by Elop, the Nokias CEO, following the companys
experienced situation in 2012 mainly after the launch of IOS, Apple and Android phone. The
Nokias change plan brought out assessment that innovation was the main approach and
technique that could enable the company to attract back its customers by switching to the
Windows phone platform. The report includes the appraisal of the change suitability with a
discussion of leadership styles linked to the change processes and procedures
Background
Nokia is among the oldest technological corporations that are still inexistence on business and
has tried and worked various multiple markets inclusive of cables, rubber, forest products as well
as the markets latest mobile device (Thomson Reuters, 2012). The corporation itself is popular
and the companys products have gained popularity and they are widely used worldwide. Nokia
offers a range of diversified products has undergoes through a range of scale of operations which
has resulted to significant changes within the organization. In 2012, Elop launched a memo that
explored the companys drawbacks root causes leading to Nokias products decreased sales.

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This was unusual for Nokia, a company well known in the telecommunication industry (Ahonen,
2012). The past studies recorded income statements that was an evidence that Nokia had the
markets significant position but with time some disagreements and calamities strongly interfered
with its position making the company to experience decreased sales. Since Nokias downfall in
2010 was majorly caused by the launch of iOS and Android phones (The Wall Street Journal,
2013). Study by (Ziegler, 2011) shows that Nokia was the worlds marketer leader as well as the
global leading brand but its position was affected by the new brands and phones instigation that
made the company to hardly battle for its markets survival.
Internal and External influences of Nokias Change
Nokia faced challenges and influences from both internal and external forces since the
companys downfall began from the markets shifting of the customers; behavior. Generally, the
smartphones industries launch totally affected the companys reputation and position (TechEye
Network., 2013). The memo by Elop, the companys CEO recorded that the apples IPhone
instigation and shipment in 2010 resulted to the companys downfall. The memo declared that
Nokia was finding it difficult to march its competitors market position since their products
resulted to a rapid behavior shift and consumers concerns shift which led to the decline of the
preference of Nokia products across the world (Nokia Corporation., 2012). Other external factors
included similar phones quick launching that gave an assurance of the application software
development in both phones and mobile. Therefore, the continued progression caused reduction
in Nokias customers since the company also suffered a challenge which also affected customers
in the countries where Nokia had a strong influence including Germany, Indonesia and Russia
and therefore they started a shift of their preferences to other competitive brands (Nokia
Corporation., 2013). Besides, other than Apple, there were other new markets entrants that
made Nokia have difficult times due to tough competition.
The external influences demanded the internal environments change to ensure the maintenance
of the markets equilibrium. Therefore, the company needed better leadership maintenance to
drive and manage change in the company (Mcallister, 2013). Basically, Nokia lacked leadership
and accountability for internal maintenance as evident from the decision they made during the
first iPhone launch which depicted that the Nokias experience of burning platform resulted from
the service by the internal environment gasoline which consequently resulted to the companys

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annual profits reduction (Nokia Corporation., 2013). Therefore, the 2010 the situation in Nokia
Corporation demanded an alignment of a proper plan with the aim, of directing the organization
in further movement for the desired goals accomplishment.
The Nokia Change: Switching to Windows Phone Platform
Based on the discussed case study, Nokia needed a change that could enable it to manage and
maintain its market position. The case study depicts various reasons that led to change demand
for Nokia including; the market development in innovation direction; the smartphone revolution
and the missing shipment; effectiveness and product life development; poor accountability and
leadership management; and strategic decisions development for similar products launch. The
identified were among the factors that drove the company towards implementing change of
which some of them would result to various challenges in the organization. However, during the
implementation of this change, Nokia encountered problems resulting from change resistance
and other reasons. Pearson (2013a) explains that change can at times result to various challenges
and problems that may require solutions for better strategies execution since change at times
shatters the corporations processes leading to worse situations for the company. Among the
challenges and problems resulting from change in an organization may include; failure of the
company to understand the problem; poor or lack of management and proper leadership to
address the change; underestimating the situation gravity; seniors and employees
misunderstanding on implementing change; opinion differences and leadership differences
leading to disagreement and agreements with the change to be implemented; and workforce
maintenance and decision maintenance that may arises when implementing change.
Change Management Model
Implementing change can result to various challenges and problems that need to be addressed
and taken care of, and therefore in the Nokias case, Kotters model of change Management was
found to be influential as it involves strategies and practices that can be applied by a company
for effective maintenance and management of change in an organization. Created in 1966 by
John Kotter, the Harvard Universitys professor, Kotters model comprises of eight different
stages which represents the actual processes that need implementation for managing and
executing a fruitful change (Cameron & Green, 2012). These processes are explained below (See
figure 1).

Figure 1: Kotter's Model of Change (Appelbaum et al. 2012)

The first stage of this model is the understanding of the change exigency which involves
identifying of the change emergency since it helps in change processes acceleration (Appelbaum
et al. 2012). However, the weight of the change to be implemented in Nokia required in-depth
analysis and investigation for proper quotation of the change urgency. Therefore, the assessment
of competitive companies and market helped in the management of the change processes and
procedures. Consequently, the identification of the change urgency enhanced the change
implementation progression. After identifying the change urgency, there is a need to maintain the
change dedicated team which is the second phase of Kotters model of change management. This
step gives a depiction that fir change management, the company requires the workforce to be
managed for the change so that the functions and operations of the company are limited to the
depicted change only (Kotter & Schlesinger, 2008). In Nokias situation, the company needed its
workforce proper and effective maintenance that could only work for the suggested change
development. The idea for change establishment is the third stage of Kotters model. It involves
identifying and developing a clear idea that important in the suggested change execution. In its
situation, Nokia required a clear vision execution on implementing change. Innovation

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maintenance was a clear vision and approach of Nokia Corporation as it was the actual factor
requiring change.
Necessitate of Change sharing is an important step in the Kotters model of change
management. This stage involves communicating the suggested change within the company
(Fernandez & Rainey, 2006). In a similar manner, Nokia communicated the change internally to
create an awareness to the employees through which they suggested further improvement to the
change processes and procedures. In implementing change, the staff needs to be empowered for
change. This is the fifth phase of the Kotters model which is useful in staff empowerment to
attract their contribution in the actual change development (Kotter, 2012.). Similarly, Nokia
incorporated its staff culture empowerment which helped them to effectively manage the change.
Objectives settlement represents the sixth stage of Kotters model of change management. As a
major step, Nokia executed the change objectives settlement for its gradual management.
Maintaining Persistency is another essential step of implementing and managing change. Nokia
effectively maintained persistency with the companys functions and operations to effectively
manage the change. The company achieved this by fine results extraction through short
objectives accomplishment. The lasting change implementation is the final stage of Kotters
model of managing change (Smith, 2011). This requires the actual change implementation which
was exhibited by Nokia through innovation execution of its products.
The greatest Kotters model strength lies in its two stages, that, creation of a sense of change
urgency and creation of a coalition to guide change implementation. This is because of the
organizational leaders and managers lurch into an organizational upheavals programme without
a proper conviction to the people on the genuine nature of the required change to be implemented
(Herold et al. 2008). Other leaders have a notion that they are capable of driving change by their
own personality force instead of attracting and embracing the perception and genuine
engagement of broader team of individuals with the understanding of the need for change.
Rarely will a single individual have all the insights and skills required to successfully implement
and manage the change needed in an organization hence the need for team work. Therefore, this
is the core reason as to why change leadership group is crucial as a coalition guide as
demonstrated in the Kotters model of change. The Kotters approach also offers a resourceful
checklist of the most of the things needed in thinking about change implementation and

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management. The fifth stage of Kotters model of change requires the placing of the right
systems prior to change implementation to ensure proper alignment of the systems with the new
change Pearson (2013a). The creation of short term objectives is a winning strategy as since
many individuals may lose faith in the process of the whole change which also turns out to be
crucial and insightful to the change leaders.
On the other hand, there are several demerits of the Kotters model of change. This model is top
down in nature, given that its creator had much experience in working with companies which
implementing and managing big change projects, and that most of his experience was with large
organizations across the world (Appelbaum et al. 2012). Therefore, in case of implementing a
change in company where peoples expectation is more of participative or bottom up change
approach, the most appropriate and useful technique would be appreciative enquiry. Further,
Kotters model of change is mechanistic. Companies cannot be regarded as just machines since
they also incorporate communities of individuals. Following it checklist, the approach is useful
as it entails the change step by step description though less helpful than the systems theory by
Peter Senge. Finally, despite the strong nature of Kotters approach in change initiation, its
principle weakness lie in step seven that consolidates gains and encourages more change
production (Mcallister, 2013). Therefore, the model fails to provide a consolidated way of
change sustenance and specific guidance on managing change.
Nokia Organizational Development Strategies and Leadership Styles
Given that the Nokia Corporation faced the problem of innovative smartphone instigation, the
situation and condition demanded Nokia to implement the change internally. The change
execution within the companys internal environment was basically influenced the Nokias
external pressure (Intel Corporation., 2012). Groves (2007) States that any form of change
requires proper management and leadership for fruitful results and outcomes production since a
change can never impact a company unless it is properly managed. However, use of the above
Kotters model of change management helped in proper procedures and processes management
of Nokia. The management of a given change requires an initiated solution from the development
technique of an organization. Further, change management in a company requires strategies and
techniques development in an organization with the aim of maintaining the change effectively

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(Ziegler, 2011). Figure 2 below illustrates the organizational strategies for change implemented
by Nokia.

Figure 2: Organizational Development Strategies for Change (Ziegler, 2011).

In order to effectively implement and mange change, Nokia employed various strategies
including directive strategy, expert strategy, participative strategy, negotiating strategy and
educative strategy. According to Jones (2010), directive strategy entails developing of seniors
and authority as they are recognized to as the actual people that require change adjustment and
declaration. Basically, attunement of the seniors with change automatically prepares the
subordinates for the change execution within an organization. The Nokias downfall was
contributed to by poor accountability and leadership among the companys seniors and therefore
in this case, directive strategy was effective in change management. The company provided the
authority to the seniors to help in imposing change after developing a clear vision which an
effective approach as it reduced resistance for Nokias suggested change (Thomson Reuters,
2012). The use of expert strategy as a strategy for change management and development involves
interlinking with the technical and IT development as it is involved in technical aspects

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preparation shifting with the change (Choi & Ruona, 2010). Given that the Nokia Corporation
needed a speedy change in bringing technological change in its products, expert strategy
management was crucial and beneficial to the company. The strategy solved the related to
technology by charging the R&D and department with the responsibility to manage the change
within the organization.
The people are important components of any given company and therefore involving them in
change implementation is equally necessary. Their resistance or involvement in a change
implementation indicates their perception for the change to be implemented (Weiner, 2009.).
Therefore, participative strategy is an important development strategy in an organization as it
attracts other peoples sharing and participation during change implementation. This strategy
positively worked for Nokia given that its scenario and position needed team work and sharing
of ideas. Issues identification and discussion with the individuals affected or involved in the
change is important as is useful in maintaining the workforce fine environment to perform their
duties and responsibilities. Negotiating strategy entails specific people and departments
discussions on the impact of the change to be implemented in order to allow adjustment
establishment (Armenakis & Harris, 2009). Given the varying opinions of Nokia stakeholders,
the company employed negotiating strategy with the aim of reducing the resistance that could
occur in the implemented change direction. Further, Nokia employed educative strategy to enable
people individuals understand change via education and training relating to the change to be
implemented and also for the change successful execution within the company position (TechEye
Network., 2013). Nokias circumstances and conditions needed a shifting of the beliefs and
values among the individuals affected and involved in the change for easy acceptance and
adjustment to the change. Communication development, training and persuasion helped Nokia to
attract the peoples interest with which the company enhanced its performance and productivity
on the society (The Wall Street Journal, 2013). These strategies enabled Nokia to effectively
implement and manage change thus attracting its past position since these strategies effective
management and implementation contributed into successful change implementation in Nokia.
Generally, transformational and participative leadership styles were implemented in Nokia which
resulted to the successful change implementation in the company. Transformational leaders are
guided by vision as their vital trait of leadership. They stand out from other leaders due to their

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speedy and effective ability of assessing the current situation of the company and quick
formulation of an improvement or growth vision (Hoel et al. 2010). They also share their vision
with other leaders and mangers in the company as well as the employees to ensure all internal
stakeholders are on board with the formulated vision hence a participative leadership style. Elop,
the CEO of Nokia effectively employed transformational and participative leadership styles
which resulted to success in implementing the proposed change as he saw a big picture of the
company from the challenging situation and condition of Nokia (Nokia corporation, 2013).
However, transformational leadership style has several principal drawbacks. The success of this
leadership style is based on the ability of the leader to inspire the workforce in putting and doing
their best in all that they do. Some leaders may lack such ability resulting to the failure of
achieving the advantages of transformational leadership (Vinkenburg et al. 2011). Nokia leaders
had the ability to drive change as most of them had the experience from the recent recession that
had taken place in 2007 which they engaged in recovering and therefore, from the experienced
gained, implementing and managing the current change was not a problem.
Conclusion
In summary, it can be seen that Nokia suffered tremendous challenges and issues resulting from a
series of smartphones launch which led to the deterioration of the company as the worlds global
brand leader in the market. Other than the instigation of smartphones and innovation execution,
the other form of misfortune to Nokia arose from the entry of new products into the markets
which shifted the preference of consumers from Nokia products resulting low sales. The
tremendous Nokia drawbacks demanded effective change to make it attain its past market
position as a global leader in the telecommunication industry. It needed a speedy and effective
strategy to retain and maintain its customers through implementation of a critical change that
could help in providing its proper position execution in the market. The Nokias action plan
brought out assessment that innovation was the main approach and technique that could enable
the company to attract back its customers. Basically, significant change was important as the
Nokias market value recorded a continuous decrease while estimated impact was observed both
from external and internal disorder. However, an appropriate change execution helped in Nokias
position, management resulting from the employed and developed specific change criterion. The
Kotters model of change used proved effective in additional to the organizational developmental

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strategies for change including directive strategy, expert strategy, participative strategy,
negotiating strategy and educative strategy. These approaches were proper in the change
execution as they provided an opportunity to Nokia to re=establish its market position.

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