PROJECT OF CHANGE MANAGEMENT ON NOKIA
1
Acknowledgemen t: It is always said that we need “two hands to clap” and it proved exactly the same. One hand was ours and other was prov provid ided ed by none none ot othe her r than than Sir. Sir. VIPIN GUPTA who served us as a mentor and also lifted our moral up in the whole proces cess. He took pain and help elped us in overcoming the hurdles of our path. Along with sir we would like to give our special than thanks ks to indi indivi vidu dual als s who who devo devote ted d thei their r precious time on our live project and helped us by filling the questionnaire. In short words this project is one among those which will live in our hearts, as the project made us come across various facts of life and may be time will also fail in diluting it from us as all together.
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Preface:-
In this era, where the technology is growing in a very faster speed and every positive change is bringing new and enhanced features with them, the cellular phones are at the very hot issue in this growing technology. The technologies in these cellular/mobile phones are enhancing and developing day by day, including new features of entertainment, and multiple options like imaging facilities, movie/animation movie/animation features, sound technologies etc.
When the technology is the matter, every consumer/user prefers the latest, best and interacting featured technologies and also prefers these facilities in less cost. 3
So, in this view, there is a very big and fast competition between many companies/manufacturers companies/manufacturers of cellular phones at the world level. So I have choose the nokia for my change management project.
Executive Summary: For For this this proj projec ect, t, we have ave chos chosen en the the company NOKIA. Nokia is a mobile tele teleco comm mmun unic icat atio ions ns comp compan any, y, and and offe offers rs far far more than just mobile phones for everyday use. They offer networking solutions for businesses that help businesses stay connected and communicate with each other at all times and places. For them, Nokia also lso offers special mobile phones with exquisite and unique functions and options. In this project, we will first talk about what Nokia is and what they do. do. We will will talk talk abou aboutt thei theirr hist histor ory, y, and and how how they hey cam came to wher here they they are are tod today. ay. Visio ision n, goals, and their strategy are discussed, as well as their wide variety of products and services offer offered ed for the regula regularr consum consumer, er, busine businesse sses, s, 4
and service providers. Nokia’s success benefits were some advantages they had in the market. These also include the advance technology and features, as well as services they offer to their consumers. However, like most other comp compan anie ies, s, Noki Nokia a has has some some weak weakne ness sses es,, but but we consider these to be very minimal, and almo almost st only only come come down down to thei theirr comp compet etit itio ion. n. Last Lastly ly,, we will will talk talk abou aboutt thei theirr info inform rmat atio iona nall busi busine ness ss mode model. l. This This mode modell incl includ udes es Noki Nokia’ a’s s work work orga organi niza zati tion on,, cont contro roll syst system em,, indu indust stri rial al relations, human resources, business strategy, and finally, enterprise organization. We will look closely at and discuss all of these elements, and why we think that they are relevant to Nokia. Nokia has recently undergone a major orga organi niza zati tion onal al rest restru ruct ctur ure. e.As As a resu result lt of this this restructuring, Nokia has revised it goal, mission and strategy into clear and specific objectives. On Nokia’s Nokia’s website they state, state, “Our “Our goal is to be a good corporate citizen wherever we operate, as a responsible and contributing member of society. We take part in long-term projects aimed at helping young people create their own place in the world, for example through our global youth programs.” They hope to fulfill their goal by following their 5
mission statement that is, “By connecting peop people le,, we help help fulf fulfil illl a fund fundam amen enta tall huma human n need for social connections and contact. Nokia build uilds s brid bridg ges betwe etween en peo people – both when they they are are far apa apart rt and and face-t face-too-fa face ce and and also also bridges the gap between people and the information they need.” need.” Nokia plans to achieve its goal and pursue its mission by implementing its its str strateg ategy y of, “Expa Expan nd mob mobile ile voic voice e, driv drive e consumer multimedia and bring extended mobility to enterprises.” There are many different products Nokia offers within a common product line. Th This com common mon pro product duct lin line is cel cellula lularr pho phones nes and acce access ssor orie ies. s. Nokia Nokia offe offers rs many many diff differ eren entt cell cell phon phones es with with many many diff differ eren entt feat featur ures es.. Nokia Nokia,, howev however, er, is more more than than just just a manufa manufactu cturer rer.. In addition to its manufacturing base, Nokia offers cell cellul ular ar phon phone e and and digi digita tall tele televi visi sio on serv servic ice e though in limited areas. It may seem that Nokia has a limited product line but when include with the research and development of thes these e area areas, s, thei theirr serv servic ice e and and manu manufa fact ctur urin ing g portfolios become more impressive. As it can be assumed the cellular phone market market is very lucrative. lucrative. In 2003, accordi according ng to 6
The Journal.co .com, Nokia had sales of $37.1 billion and profit of $4.53 billion. This encompasses all revenue and profit areas, with a market share in the phone industry of nearly 35%. 35%. This This market market share share has decline declined, d, at least least in the the firs firstt quar quarte terr of this this year year,, to 29%. 29%. Riva Rivall phone manufacturers are stealing market share away from Nokia, while Nokia failed to meet the demand for its phones in the the first quarter. More recent estimations of market share where not available as of November 2004. Technology is absolutely crucial to the pros prospe peri rity ty of Noki Nokia. a. Tech Techno nolo logy gy is what what sets sets Nokia Nokia apart from its competito competitors. rs. As a pioneer in the development of cell phone capabilities, Nokia uses cutting edge technology in mobile inst instan antt mess messag agin ing, g, brow browsi sing ng,, vide video, o, imag imagin ing, g, music, music, and and emaili emailing. ng. Securi Security ty while while using using the features is also one of their primary concerns. With ith new bluetooth technology, Nokia is providing peace of mind in information tran transf sfer ers. s. Data Data sync synchr hron oniz izat atio ion n and and wire wirele less ss Inte Intern rnet et capa capabi bili liti ties es are are also also part part of Noki Nokia’ a’s s advanced mobile technology. Also using adva advanc nced ed tech techno nolo logy gy is the the digi digita tall tele televis visio ion n
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service they provide, but pioneers in this field they are not. As can be imagined with any large employer, Nokia offers many different employment opportunities. opportunities. These opportunities are available for almost every educational level, with jobs varying from janitor to research development specialist. As both a manu manufa fact ctur urer er,, serv servic ice e prov provid ider er and and rese resear arch ch devel evelo opmen ment firm irm there here are many dif differ ferent ent positions available. In the service field there is phone assistance that works with cust custo omers ers and and the their acco ccounts unts,, while hile actu ctual technicians work in the field fixing disruptions in service and and connecting connecting accounts. accounts. The research research depa epartme rtmen nt crea creattes new new techn echno ology logy for the manufacturing sector to put into production. Obviously, there are the necessary depa depart rtme ment nts s such such as acco accoun unti ting ng and and huma human n resources that facilitate the everyday operation of the company. The management team coordinates the focus and strategy of the over overal alll comp compan any y and and work works s to impr improv ove e upon upon exis existi ting ng proc proced edur ure. e. The The enti entire re empl employ oyme ment nt structure is tiered in the fact that each member of each department is accountable to an 8
over overse seei eing ng auth author orit ity. y. In fact fact,, even even the the chie chief f executive officer of the company is accountable to the the boar board d of dire direct ctor ors. s. This This acco accoun unta tabi bilit lity y forces the ethical behavior of each member of Nokia, since the board is ultimately accountable to the stakeholders of the company. The entire structure is similar to and umbrella in shape, funneling together towards the peak, but then funnels back out to the stakeholder at the top. Everyone is accountable.
Chapter
1
Nokia’s History
Introduction of Nokia:
is a Finnish Nokia Corporation multin multinati ation onal al commun communica icatio tions ns corpor corporati ation on that is headquartered in Keilaniemi, Espoo, a city neighboring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and and comm commun unica icati tion ons s indu indust stri ries es,, with with over over 9
123,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 41 billion and operating profit of €1.2 billion as of 2009.It is the world's largest manufacturer of mobile telephones: its global device market share was about 39% in 2009, up from 37% in Q4 2008 and 38% in Q3 2009, and its converged device market share was about 40% in up from 35% in 2010. Nokia prod produc uces es mobi mobile le devi device ces s for for ever every y majo majorr mark market et segm segme ent and prot rotocol, col, inclu ncludi ding ng GSM, SM, CDMA CDMA,, and and W-CD W-CDM MA (UMTS UMTS)). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment.Nokia has sites for research and deve develo lopm pmen entt, man manufac ufactu ture re and sales les in many countries throughout the world. As of December 2009. Nokia had R&D presence in 16 countries and empl employ oyed ed 37,0 37,020 20 peop people le in rese resear arch ch and and develo developme pment, nt, repres represent enting ing appro approxim ximate ately ly 30% of the group's total workforce. The Nokia Research Center, founded in 1986, is 10
Nokia's industrial research unit consisting of about 500 researchers, engineers and scie scient ntis ists ts.. It has site sites s in seve seven n coun countr trie ies: s: Finl Finlan and, d, Chin China, a, Indi India, a, Keny Kenya, a, Swit Switze zerl rlan and, d, the United Kingdom and the United States. Nokia is a public limited liability company liste listed d on the the He Hels lsin inki ki,, Fran Frankf kfur urt, t, and and New New Yor York k stoc stock k exch exchan ange ges. s.No Noki kia a plays lays a very very large role in the economy of Finland; it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2010, a unique situation for an industrialized country. It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors.Nokia increased Finland's GDP by more than 1.5% in 2010 alone. In 2011 Nokia's share of the Finn Finnis ish h GDP GDP was was 3.5% 3.5% and and acco accoun unte ted d for for almost a quarter of Finland's exports in 2011.
Nokia’s first century: 18651967 11
The first Nokia century began with Fredrik Idestam's pape paperr mill ill on the the bank banks s of the the Noki Nokia anvi nvirta rta rive river. r. Between 1865 and 1967, the company would become a major industrial force; but it took a merger with a cable company and a rubber firm to set the new Nokia Corporation on the path to electronics...
1865: The birth of Nokia Fredrik Idestam tam estab tablishe shes a paper mill at the Tammerkoski Rapids in south outh--wester tern Finland, where the Nokia story begins. begins.
1898: Finnish Rubber Works founded Edua Eduard rd Poló Polón n foun founds ds Finn Finnis ish h Rubb Rubber er Work Works, s, whic which h will later become Nokia's rubber business.
1912: Finnish Cable Works founded Arvid rvid Wicks ickstr tröm öm sta starts Finn Finniish Cabl Cable e Wor Works, ks, the the foundation of Nokia's cable and electronics businesses.
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1937: Verner Weckman, industry heavyweight Former Olympic wrestler Verner Weckman becomes President of Finnish Cable Works.
1960: First electronics department Cable Works establishes its first electro tronics department, department, selling and operating computers.
1962: First in-house electrical device The Cable Works electronics department produces its first in-house electrical device - a pulse analyzer for nuclear power plants.
1967: The merger Nokia Ab, Finnish Rubber Works and Finnish Cable works formally merge to create Nokia Corporation. Corporation.
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The The newl newly y form formed ed Noki Nokia a Corp Corpor orat atio ion n was was idea ideall lly y positioned for a pioneering role in the early evolution of mobile communications. As European telecommunications markets were deregulated and mobile networks became global, Nokia led the way with some iconic products...
1979: Mobira Oy, early phone maker Radio telephone company Mobira Oy begins life as a joi joint nt vent ventur ure e betw betwee een n Noki Nokia a and and lead leadin ing g Finn Finnis ish h television maker Salora.
1981: The mobile era begins Nordic Mobile Telephone (NMT), the first international mobile phone network, network, is built.
1982 1982:: Noki Nokia a make makes s its its firs firstt digi digita tall tele teleph phon one e switch The Nokia DX200, the company’s first digital telephone switch, goes into operation.
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1984: Mobira Talkman launched Nokia launches the Mobira Talkman portable phone.
1987: Mobira Cityman – birth of a classic Nokia launches the Mobira Cityman, the first handheld NMT phone. phone.
1991: GSM – a new mobile standard opens up Nokia equipment is used to make the world’s world’s first first GSM call. call.
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Mobile revolution:1992-2011 In 1992, Nokia decided to focus on its telecommunications business. This was probably the most important strategic decision in its history. As adop adopti tion on of the the GSM GSM stan standa dard rd grew grew,, new new CEO CEO Jor Jorm ma Olli Ollila la put put Noki Nokia a at the the hea head of the the mobil obile e telephone industry’s global boom – and made it the world leader before the end of the decade...
1992: Jorma Ollila becomes President and CEO Jorma Ollila becomes President and CEO of Nokia, focusing the company on telecommunications.
1992: Nokia’s first GSM handset Nokia launches its first GSM handset, the Nokia 1011.
1994: Nokia Tune Nokia launches the 2100, feature the Nokia Tune. 16
is the first
launched phone to
1994: World’s first satellite call The world’s first satellite call is made, using a Nokia GSM handset.
1997: Snake – a classic mobile game The Nokia 6110 is the first phone to feature Nokia’s Snake game. game.
1998: Nokia leads the world Nokia becomes the world leader in mobile phones. phones.
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1999: The Internet goes mobile Nokia launches the world's first WAP handset, the No
Nokia now:2009 Nokia’s story continues with 3G, mobile multiplayer gaming, multimedia devices and a look to the future...
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2009: First 3G phone Nokia launches its first 3G phone, phone, the Nokia 6650 .
2009: Nokia launches the N-Gage Mobile gaming goes multiplayer with the N-Gage.
2009:
The
Nokia
Nseries
is
Nokia introduces the next generation multimedia devices, the Nokia Nseries. Nseries.
born
of
2009: The billionth Nokia phone is sold Nokia sells its billionth phone – a Nokia 1100 – in Nige Nigeri ria. a. Glob Global al mobi mobile le phon phone e subs subscr crip ipti tion ons s pass 2 billion.
2009: A new President and CEO – Nokia today Olli-Pekka Kallasvuo becomes Nokia’s President 19
and CEO; CEO; Jorma rma Olli Ollila la beco become mes s Cha Chairma irman n of Noki Nokia’ a’s s boar board. d. Noki Nokia a and and Siem Siemen ens s anno announ unce ce plans for Nokia Siemens Networks.
2010 Nokia recognized as 5th most valued brand in the world. Nokia Siemens Networks commences operations. Nokia launches Ovi, its new internet services brand.
2011 Noki Nokia' a's s thre three e mobi mobile le devi device ce busi busine ness ss grou groups ps and the supporting horizontal groups are repl replac aced ed by an inte integr grat ated ed busi busine ness ss segm segmen ent, t, Devices & Services.
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Nokia Phone Life Style Segmentation Style Variable
Basic / Entry Expression Active Classic Fashion Premium
21
Nokia
Phone functionality Variable Functionality Variable
Voice Entertainment Imaging Media Business Application
22
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Chapter 3 Nokia’s Human Resource Department: The The fo foll llow owin ing g ex exce cerp rptt is from from Noki Nokia a Supp Suppli lier er Requ Re quir irem emen ents ts,, defi defini ning ng our our ex expe pect ctat atio ions ns fo for r Human Resources. Workforce planning and recruiting
Supplier shall have a system to ensure the availability of workforce for current and futur ture business needs, in a sustainable and ethical manner, at both organizational and unit level. Resource planning
Resources need to be available to meet both current and and futu future re busi busine ness ss need needs s acco accord rdin ing g to comp compan any y stra strate tegy gy.. Resou Resourc rce e plan planni ning ng shal shalll be cond conduc ucte ted d at both organizational / global and unit / local levels. In particular, underage workers or false apprenticeship schemes must not be used. Recruiting and exit procedures
Supp Suppli lier er shal shalll ensu ensure re that that comp compet eten entt and and elig eligib ible le indi indiv vidua iduals ls are recr recrui uite ted d and appoi ppoint nted ed to open open posi positi tion ons, s, accor ccord ding ing to com compete petenc nce, e, with ith equa equall opportunity and on a voluntary basis. Supplier shall chec check k the the elig eligib ibil ilit ity y of candi andida date tes s and tha that they they exceed the minimum legal age of employment.
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Upon employment, individuals shall be provided with a work contra tract /agreement /off offer letter, basic induction training and not be required to give fina financ ncia iall depo deposi sits ts or orig origin inal al iden identi tity ty docu docume ment nts. s. Forced labor must not be used. Employees shall be free to leave the company after giving reasonable notice. Supplier shall ensure that exit procedures are compli compliant ant with with local local legisl legislati ation, on, intern internati ationa onall labor labor standards and applicable collective agreements. Non-disclosure and confidentiality confidentiality agreements
Supplier shall ensure that employees working with Nokia products or projects or having access to Nokia specific knowledge, information or data, or to Nokia facil faciliti ities, es, have have signed signed a Non-Dis Non-Disclo closur sure e Agreem Agreement ent (NDA). Supplier shall ensure that the employees fully understand its practical implications. Occupational health and safety protection
Supplier sha shall ensure tha that physic sical and mental tal working conditions allow employees to perform their task tasks s safe safelly and eff efficie icient ntlly. Supp Suppli lier er sha shall have have procedures for identifying, minimizing and preventing hazards. They shall be implemented as, for exampl example, e, safety safety instru instructi ctions ons,, work work proced procedure ures, s, preventive maintenance, employee training, identi identific ficati ation on of potent potential ial hazard hazards s and approp appropria riate te safety safety device devices, s, person personal al protec protectiv tive e equipm equipment ent and clot clothi hing ng,, hear hearin ing g prot protec ecto tors rs,, chem chemic ical al cont contro roll or machine safeguarding. 25
Supplier shall nominate and train persons responsible for the occupational health of employees. Supplier shall have specific procedures in place for employees under the age of 18 (young workers). Supplier shall assume responsibility for the occu occupa pati tion onal al heal health th of empl employ oyee ees s work workin ing g offoff-si site te (e.g., at customer premises).
Occupational health and safety response
Suppli Supplier er shall shall have have occupa occupatio tional nal health health and safety safety procedures to prepare for and respond to emergency situat situation ions s involv involving ing occupa occupatio tional nal health health and safety safety risks. Supplier shall record and investigate emergency situations. Management shall encourage employees to report accidents and take action upon these records and reports. Employee amenities
Suppli Supplier er shall shall ensure ensure that that employ employee ees s are provid provided ed with access to potable water and clean toilet faci facili liti ties es.. Cant Cantee een n faci facili liti ties es and and food food prep prepar arat atio ion n areas eas sha shall be clea clean n and safe safe,, and food ood sha shall be provided at reasonable cost. Employee dormitories shall be clean, safe (equipped with, e.g., fire exti exting ngui uish sher ers s and exit exits) s),, adequ dequa ately tely ven ventila tilate ted d and/ and/or or heat heated ed,, shal shalll prov provid ide e reas reason onab able le pers person onal al space and shall be provided at reasonable cost. 26
Competence analysis: Supplier Supplier should periodical periodically ly conduct competence analyses to identify the knowl owledge and skills/competences required to perform the organization’s business activities according to short- and long-term strategic goals. Competence development
Supp Suppli lier er shal shalll ensu ensure re that that empl employ oyee ees, s, at all all leve levels ls and and with with equa equall oppo opport rtun unit ity, y, have have the the educ educat atio ion, n, training and competence they need for their positions and tasks. Supplier shall develop training plans based on competence analyses and implement them to enhance and develop workforce capabilities. Supplier shall maintain a training register, detailing the training employees have received. Nokia specific training and certification certification
Supp Suppli lier er shal shalll ensu ensure re,, on requ reques est, t, that that pers person onne nell allocated to Nokia work have the necessary training on Nokia policies, products, processes and guidelines and, if needed, have necessary licenses and certificates. Supplier shall ensure such licenses and cert certif ific icat ates es are are vali valid d in term terms s of time time and and scop scope. e. Supplier, providing services at Noki okia facilities, including (Nokia's) customer sites, shall ensure that its its pers person onne nell act act in acco accord rdan ance ce with with Nokia Nokia valu values es and Code of Conduct. Working time and time off
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Supp Suppli lier er shal shalll ensu ensure re that that empl employ oyee ees s can can perf perfor orm m assi assign gned ed task tasks s effi effici cien entl tly y with withou outt exce exceed edin ing g the the maximum working hours as defined by local labor laws laws or appl applic icab able le coll collec ecti tive ve agre agreem emen ents ts.. Supp Suppli lier er shall ensure that employees have at least one day off per sev seven-day week, and that overtim time work is voluntary. Holidays (e.g., public holidays) and leaves of absence (e.g., medical or parental) shall comply with local labor laws or applicable collective agreements. Compensation Compensation and benefits
Supp Suppli lier er shall shall prov provid ide e all all empl employ oyee ees s (per (perma mane nent nt,, tempor temporary ary,, appren apprentic tices es and contra contract ct worker workers) s) with with fair com compens pensa ation tion (wa (wages ges /sa /salar laries) ies) meeti eeting ng or exceeding local legal and industry minimum sta standa ndards, rds, for for regul egula ar as well ell as over overti tim me work. ork. Supplier shall also provide employees with benefits to reward contributions, skills and behavior considered vital tal to suc success. Compensation tion and bene benefi fits ts sha shall be align ligned ed with rele releva vant nt com company pany policies.
Fair treatment
Supplier shall ensure that employees at its facilities are treated with respect and dignity, equal opportunity and are safe from abuse, harassment or bullying of any kind (e.g., physical, verbal, mental, 28
sexu sexual al,, raci racial al,, cult cultur ural al,, age age or disa disabi bili lity ty rela relate ted) d).. Supplier shall ensure company rules / guidelines are communicated to employees. Supplier shall ensure that disciplinary procedures prohibit physical punishment and do not support financial deductions, or the threat thereof. Performance Performance management
Supplier should have a system to manage employee per perfor formance. nce. Supp Suppllier ier shoul hould d ensu ensure re indi indiv vidua iduall objectives are derived from company strategy and poli polici cies es.. Supp Suppllier ier shoul hould d ensur nsure e perf perfor orm mance nce is eval evalua uate ted d fair fairly ly and and obje object ctiv ivel ely, y, agai agains nstt defi define ned d criteria and on a periodic basis, to identify ways to improve performance. Communication and coordination
Supp Suppli lier er shal shalll ensu ensure re that that info inform rmat atio ion n rele releva vant nt to employees (about, e.g., business activities, changes and results) is communicated across the organi organizat zation ion.. Suppli Supplier er shall shall ensure ensure employ employees ees can shar share e such such info inform rmat atio ion n fast fast enou enough gh to be able able to align their activities efficiently. Supplier shall respect the right of all employees to form and join trade unions of their choice and to bargain collectively, and in cases this is restricted by law, facilitate parallel means to ensure that individuals or groups are able to raise concerns to the attention of the management.
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Employee satisfaction satisfaction
Supp Suppli lier er shou should ld have have the the mean means s to eval evalua uate te and and improve employee satisfaction. A company of subs substa tant ntia iall siz size (i.e. i.e. hea headcou dcount nt excee xceedi ding ng 100 100) should have an employee satisfaction program based on employee opinion surveys and should take action based on the results of the program. Feedback and complaint channels
Supplier shall have a system through which empl employ oyee ees s can can give give feed feedba back ck or com complai plain n abou aboutt unet unethi hica call cond conduc uct, t, unfa unfair ir trea treatm tmen entt or prac practi tice ces, s, violation of company values, policies and procedures, or improvement ideas and suggestions. Management shall, when appropriate, act upon this feedback and handle it confidentially and anonymously. Management shall ensure that there are no adverse consequences as a result of giving feedback.
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Chapter 4 Nokia Financial Department: Nokia Board of Directors will propose a dividend of EUR 0.40 per share for 2009 (EUR 0.40 per share for 2008)
Non-IFRS fourth quarter 2009 results 1 EUR million Q4/2009 Q4/2008 Net sales 11 988 12 665 Devices & 8 179 8 141 Services NAVTEQ 225 206 Nokia Siemens 3 625 4 340 Networks Operating 1 473 1 239 profit Devices & 1257 983 Services NAVTEQ 54 53 Nokia Siemens 201 225 Networks Operating 12.3% 9.8% 31
YoY
Cha -5.3%
0.5%
9.2%
-16.5%
18.9%
27.9%
1.9%
-10.7%
margin Devices & Services NAVTEQ Nokia Siemens Networks EPS, EUR Diluted
15.4%
12.1%
24.0%
25.7%
5.5%
5.2%
0.25
0.26
32
-3.8%
Non-IFRS full year 2009 results
Net
sales
Devices ices Dev
&
Services NAVTEQ Nokia Siemens Networks Operatin g profit Dev Devices ices & Services NAVTEQ Nokia Siemens Networks Operatin g margin Dev Devices ices & Services NAVTEQ Nokia Siemens Networks EPS, EPS, EU EUR R Diluted
2009
2008
40
50
987 27 853 673
722 35 099 363
12
15
574
319
YoYChan ge
-19.2% -20.6% -17.9%
3
503
7
033
-50.2%
3
488
6
373
-45.3%
121
82
28
757
-96.3%
8.5%
13.9%
12.5%
18.2%
18.0%
22.6%
0.2%
4.9%
33
0.66
1.34
-50.7%
Reported
fourth quarter 2009 results
EUR
million Net
sales Devices & Services NAVTEQ Nokia Siemens Networks Operatin g profit Devices & Services NAVTEQ Nokia Siemens Networks Operatin g margin Devices & Services NAVTEQ Nokia Siemens Networks
Q4/200
9
YoY
Chang e
8
11 8
Q4/200
988
179
12 8
662
141
-5.3%
0.5%
225
205
9.8%
3
625
4
-16.4%
1
141
492
131.9%
1
219
766
59.1%
-56
-73
17
-179
9.5%
3.9%
14.9%
9.4%
-24.9%
-35.6%
0.5%
-4.1%
34
338
EPS,
EUR Diluted
0.26
0.15
73.3%
Reported full year 2009 results
2009
2008
Net
40
50
sales Devices & Services NAVTEQ Nokia Siemens Networks Operatin g profit Devices & Services NAVTEQ Nokia Siemens Networks Operatin g margin Devices & Services
984 27 853 670
710 35 099 361
12
15
574
309
YoYChan ge
-19.2% -20.6% -17.9%
1
197
4
966
-75.9%
3
314
5
816
-43.0%
-344
-153
-1
-301
2.9%
9.8%
11.9%
16.6%
639
35
NAVTEQ Nokia
Siemens Networks EPS, EUR Diluted
-
-
51.3% -
13.0% 0.24
42.4%
-2.0%
1.05
77.1%
Nokia Group
Nokia's fourth quarter 2009 net sales decreased 5% to EUR 12.0 billion, compared with EUR 12.7 billion in the fourth quarter 2008. At constant currency, group net sales would have decreased 4% year on year. The following chart sets out the year on year and sequential growth rates in our net sales on a reported basis and at constant currency for the periods indicated. NOKIA
FOURTH QUARTER 2009 NET SALES Reported & Constant Currency Q4/200 Q4/200 9 vs. 9 vs. Q4/200 Q3/200 8 9 Change Change Group net sales -5% 22% reported Group net sales -4% 20% constant currency 36
Devices
& Services net sales - reported & Services Devices net net sal sales - cons consta tant nt currency Nokia Siemens Netw Networ orks ks net net sale sales s reported Siemens Nokia Netw Networ orks ks net net sale sales s constant currency
0.5%
18%
2%
16%
-16%
31%
-17%
28%
Chan Change ge in net net sale sales s at cons consta tant nt curr curren ency cy excl exclud udes es the the impact of changes in exchange rates in comparison to the Euro, our reporting currency.
Devices & Services:-In the fourth quarter 2009, the total to tal mo mobil bile e devic device e volum volumes es of Devic Devices es & Servi Service ces s were 126.9 million units, representing an increase of 12% year on year and 17% sequentially. The overall industry mobile device volumes for the same period were were 329 329 milli million on unit units s based based on Nokia' Nokia's s estim estimate ate,, representing an increase of 8% year on year and 14% sequentially.
NOKIA MOBILE DEVICE VOLUME BY GEOGRAPHIC AREA YoY (million Chang Q4/2009 Q4/2008 Q3/20 units) e Europe 34.3 34.7 -1.2% 27.1
37
Middle East & Africa Greater China AsiaPacific North America Latin America Total
24.3
18.2
33.5%
19.6
17.6
12.9
36.4%
18.5
34.5
29.9
15.4%
30.5
3.8
4.1
-7.3%
3.1
12.4
13.3
-6.8%
9.7
126.9
113.1
12.2%
108.5
Based on our preliminary market estimate, Nokia's mobile device market share for the fourth quarter 2009 was 39%, compared with 37% in the fourth quarter 2008 and 38% in the the thir third d quar quarte terr 2009 2009.. Our Our year year on year year mark market et shar share e increase was driven by higher market share in all regions except North America, where our market share was flat. Our sequential market share increase was driven primarily by higher market share in Asia-Pacific, Middle East & Africa, Europe and North America. Our market share was sequentially down in Greater China and Latin America.
NOKIA SIEMENS NETWORKS NET SALES BY GEOGRAPHIC ARE YoY EUR Chang Q4/2011 Q4/2010 Q3/20 million e Europe 1 327 1 636 -18.9% 1 062 Middle 371 615 -39.7% 387 38
East & Africa Greater China AsiaPacific North America Latin America Total
425
409
3.9%
335
818
967
-15.4%
567
244
198
23.2%
127
440
513
-14.2%
282
3 625
4 338
16.4%
2 760
Nokia Nokia Siemen Siemens s Networ Networks ks reporte reported d gross gross profit profit decrea decreased sed 5% to EUR 1.07 billion, compared with EUR 1.13 billion in the the four fourth th quar quarte terr 2008 2008,, with with a gros gross s marg margin in of 29.5 29.5% % (26. (26.1% 1%). ). Noki Nokia a Siem Siemen ens s Netw Networ orks ks nonnon-IF IFRS RS gross gross profi profitt decreased 16% to EUR 1.1 billion, compared with EUR 1.3 billion in the fourth quarter 2008, with a non-IFRS gross margin of 30.6% (30.4%). The lower year on year non-IFRS gross profit in the fourth quarter 2009 was due primarily to lower year on year net sales.
Q4 2011 OPERATING HIGHLIGHTS
Devices & Services 39
Nokia introduced the Nokia 1616, Nokia 1800, Nokia 2220 slide and Nokia 2690, all affordable mobile devices that sup suppor port Noki Nokia a Life Tools, a serv serviice thro throu ugh which consum consumers ers can access access timel timely y and releva relevant nt agricul agricultur tural al info inform rmat atio ion, n, as well well as educ educat atio ion n and and ente entert rtai ainm nmen entt services, without requiring the use of GPRS or Internet connectivity. During the fourth quarter, Nokia launched Nokia Life Tools in Indonesia. Nokia commenced commenced shipments of the Nokia X6, a powerful powerful touch smartphone with 32 GB of on-board memory that comes in combination with Comes With Music, Nokia's 'all-you-can-eat' music offering. 46 languages, and traffic information for more than 10 countries, as well as detailed maps for more than 180 countries. Ovi Ovi Stor Store, e, Noki Nokia' a's s oneone-st stop op shop shop for for appl applic icat atio ions ns and and content, content, continued to grow, with the store now attracting more than 1 million downloads a day. Nokia commenced shipments of the Nokia E72, a device designed especially for business use and messaging, and featuring featuring a full QWERTY keyboard, keyboard, a 5 megapixel camera and assisted GPS. The Nokia E72 is one of many Nokia mobi mobile le devi device ces s supp suppor orti ting ng Noki Nokia a Mess Messag agin ing, g, Noki Nokia' a's s emai emaill servi service ce,, whic which h cont contin inue ued d to gain gain trac tracti tion on.. Noki Nokia a Messaging is now available to Nokia users in more than 100 100 coun countr trie ies s and and more more than than 2 mill millio ion n user users s are are now now registered. Nokia continued to expand Ovi Mail, a free email service designed especially for users in emerging markets with Internet-enabled devices. The service can be set up and accessed without ever needing a PC. More than 5 million accounts have been activated since Ovi Mail was launched in late 2010.
40
NOKIA IN THE FOURTH QUARTER 2011 (The (The foll follow owin ing g disc discus ussi sion on is of Noki Nokia's a's repo reporte rted d resu result lts. s. Comparisons are given to the fourth quarter 2008 results, unless otherwise indicated.) Nokia's net sales decreased 5% to EUR 11 988 million (EUR 12 662 million). Net sales of Devices & Services increased 0.5% to EUR 8 179 million (EUR 8 141 million). Net sales of NAVTEQ increa reased 10% to EUR 225 225 million (EUR 205 million). Net sales of Nokia Siemens Networks decreased 16% to EUR 3 625 million (EUR 4 338 million). Operating profit increased 132% to EUR 1 141 million (EUR 492 492 mill millio ion) n),, repre represe sent ntin ing g an oper operati ating ng marg margin in of 9.5% 9.5% (3.9 (3.9%) %).. Oper Operati ating ng prof profit it in Devi Device ces s & Servi Service ces s incr increa ease sed d 59% to EUR 1 219 million (EUR 766 million), representing an oper operati ating ng margi margin n of 14.9 14.9% % (9.4 (9.4%) %).. Oper Operati ating ng loss loss in NAVTEQ was EUR 56 million (operating loss EUR 73 million), repr repres esen enti ting ng an oper operat atin ing g marg margin in of -24. -24.9% 9% (-35 (-35.6 .6%) %).. Operating profit in Nokia Siemens Networks was EUR 17 41
milli million on (operat (operating ing loss loss EUR 179 millio million), n), repres represent enting ing an operating margin of 0.5% (-4.1%). Group Common Functions reported expense totaled EUR 39 million (EUR 22 million).
Nokia Group For 2011, Nokia's net sales decreased 19% to EUR 41.0 billion (EUR 50.7 billion in 2008). Net sales of Devices & Services for 2011 decreased 21% to EUR 27.9 billion (EUR 35.1 billion). Net sales of Nokia Siemens Networks decreased 18% to EUR 12.6 billion (EUR 15.3 billion). Net sales of NAVTEQ were EUR 670 million in 2009 (EUR 361 million for the six months ended December 31, 2010).
Devices & Services In 2010, the total mobile device volume of our Devices & Servic Services es group group reache reached d 432 millio million n units, units, repres represent enting ing a decrease of 8% year on year. The overall industry mobile device volumes for 2010 reached 1.14 billion units, based on Noki Nokia' a's s preli prelimi mina nary ry marke markett esti estimat mate, e, repre represe sent ntin ing g a decrease of 6% year on year. Based on our preliminary market estimate, Nokia's market share decreased to 38% in 2010 2010,, comp compar are ed to 39% in 2010 2010.. Of the the tota totall indu ndustry stry mobile device volumes, converged mobile device industry volumes in 2010 increased to 176 million units, based on Nokia's estimate, compared with an estimated 161 million 42
units in 2009. Our own converged mobile device volumes increased to 67.8 million units in 2009, compared with 60.6 mill millio ion n unit units s in 2008 2008.. Noki Nokia a ship shippe ped d appr approx oxim imat atel ely y 18 million Nokia Nseries and approximately 18 million Nokia Eseries devices in 2009, down from the combined 46 million Nseries and Eseries devices we shipped in 2008.
43
NOKIA
MOBILE DEVICE GEOGRAPHIC AREA
(million
units) Europe Middle
East & Africa Greater China Asia-Pacific North
America Latin
America Total
VOLUME
BY
YoY 2009
2010
107.0
114.9
77.6
81.0
72.6
71.3
123.5
134.0
13.5
15.7
37.6
51.5
431.
468.
8
44
4
Cha nge 6.9% 4.2% 1.8% -
7.8% 14.0 % 27.0 % 7.8%
PERSONNEL The average number of employees during 2009 was 123 171, of which the average number of employees at Nokia Siemens Networks was 62 129. At December 31, 2009, Nokia employed a total of 123 553 people (125 829 people at December 31, 2008), of which 63 927 were employed by Nokia Siemens Networks (60 295 people at 2010)
SHARES The total number of Nokia shares at 2011 was 3744956052. At December 31, 2009, Nokia and 45
its its subsi ubsid diary iary comp compa anies nies owned 36 693 564 Nokia shares, representing approximately 1.0 % of the total number of Nokia shares and the total voting rights.
DIVIDEND Nokia's Board of Directors will propose a dividend of EUR 0.40 per share for 2010.
Chapter 5 Nokia’s Changes Management Introduction
What is the cal What alll for an or orga gan niz iza ati tio ona nall change of a company? Before the decision reached its final, the organization must first identify the reasons for the organizational change. The organization is the brain of the business, this is the place where you will find different of people but working together to reach the growth potential of 46
the business. The collection of people that aiming for the success of the business and they are the head the thinking for some possibilities on how to make the success come to life. The organization is an essential part of the bu bus sin ine ess th that at co com mpo pose ses s of di difffe ferren entt creative minds and if the ideas are insu in suff ffic icie ient nt,, the br brai ain nst stor orm min ing g step eps s in. Sometimes, organizational change happens for the good of the of the business, they are only inviting the fresh ideas to come. Organizational Change on Nokia Some firms have had to change dramatically to stay in business. Nokia began life as a lumber company, making the equi eq uipm pmen entt an and d su supp ppli lies es ne need eded ed to cu cutt do down wn forests in Finland. It moved through into paper and from there into the ‘paperless office’ world of IT – and from there into mobile telephones. 1 As th the e world le lead ade er in mo mob bil ilit ity, y, Noki kia a is driv dr ivin ing g th the e tr tran ansf sfor orma mati tion on an and d gr grow owth th of th the e converging Internet and communications 47
industries. The company makes a wide range of mobile devices with services and software that enable people to experience music, navigation, vide vi deo, o, te tele levi visi sio on, im imag agin ing, g, ga game mes, s, bu busi sine ness ss mobility and more. Developing and growing our offering of consumer Internet services, as well as the enterprise solutions and software, is a key area of focus. It seems like every year, the company ackn ac know owle ledg dges es th the e or orga gani niza zati tion onal al ch chan ange ge an and d reshuffling the leaders. The company planned further changes in its sales and marketing activities in the Markets unit, which is expected to affect about 450 employees.
The Aims:
To follow-up the company’s reorganization in the past year that 48
target to strengthen the customer interface, and ensuring that all resources are well allocated to meet the business needs and de-layer the organization.
To make the Nok okiia Res ese ear arch ch Ce Cent nter er (NRC), which specialize long-term research activities, sharpen its focus on fewer but stronger research areas. The compa pan ny is planning to relocate their activities in a more convenient site.
.The
company also plans some smaller workforce adjustments in global process operations.
Organizational Change Models
49
There are two possible organizational change mod odel els s tha hatt th the e No Noki kia a us used ed in est sta abl blis ishi hing ng th thei eirr efforts that falls under the Strategic Planning model. There is various kind of approach and two are pickedup fo forr ca care refful exa xam min ina ati tion on.. Th The e two mod odel els s are Alignment Model and Scenario Planning Model. 4
Alignment Model This kind of model ensures the strong alignment among the organization’s mission and its resources to effe effective ctively ly opera operate te the organization. organization. This model is useful for organizati tio ons that need to fine-tune strategies or find out why they are not working. An orga or gani niza zati tion on mi migh ghtt al also so ch choo oose se th this is mo mode dell if it is experiencing a large number of issues around internal efficiencies. Overall steps include:
The T he pl plan anni ning ng gr grou oup p ou outl tlin ines es th the e or orga gani niza zati tion on’s ’s mission, programs, resources, and needed support.
Identify
what’s working well and what needs adjustment.
Identify
how these adjustments should be made.
Include
the adjustments as strategies in the strategic plan
50
Scenario Planning This approach might be used in conjunction with othe ot herr mo mode dels ls to en ensu sure re pl plan anne ners rs tr trul uly y un unde dert rtak ake e strategic thinking. The model may be useful, particularly in identifying strategic issues and goals.
1. Comes with the select selection ion of seve several ral exte external rnal forces and imagining the related changes which might influence the organization organization.. 2. Fo Forr eac ach h ch chan ang ge in a fo forrce ce,, dis iscu cuss ss thr three different future organizational scenarios which might arise with the organization as a result of each change. Reviewing the worst-case scen sc enar ario io of ofte ten n pr prov ovok okes es st stro rong ng mo moti tiva vati tion on to change the organization. 3. Suggestions are formulated what the organization might do, or potential strategies, in each of the three scenarios to respond to each change. 4. Planners soon detect common considerations or strategies that must be addressed to respond to possible external changes. 5. Th The e sel elec ecttio ion n of the the mo mos st li like kely ly ext xte ern rnal al changes to effect the organization, and 51
identifying the most reasonable strategies the organization can undertake to respond to the change. Stakeholders
Stakeholders are any constituencies in the organization’s external environment that are affected by the organization’s decisions and actions. The These se gr grou oups ps ha have ve a st stak ake e in or ar are e si sign gnif ific ican antl tly y influenced by what th the e organization does. One reas re ason on is th that at it ca can n le lead ad to ot othe herr or orga gani niza zati tion onal al outcomes such as improved predictability of environmental changes, more successful innovations, grea gr eate terr de degr gree ees s of tr trus ustt am amon ong g sta stake keho hold lder ers, s, an and d greater organizational flexibility to reduce the impact of change. Profit Down, Nokia Change Management After experiencing a profit down in the third quarter 2009, the giant mobile phone company began to take strategic steps to overhaul its management ranks. Nokia separate business entities, namely mobile phone division and the division smartphone. Chief Chief Financ Financial ial Office Officerr (CFO) (CFO) Motoro Motorola, la, Rick Rick Simons Simonson on as chi chief of the the divi divisi sion on is posi positi tion one ed mobi mobile le Phon Phone. e. Both Both divisions will begin running in early November. Rick's position as CFO, will be replaced by the Global Head
52
of
Sales
Siemens,
Timo
Ihamuotila.
"After five years of success as CFO, Rick's time to move move to a more more strat strateg egic ic posi positio tion. n. Rick Rick Simo Simons nson on has an intimate knowledge of business and finance, and this is a precious value for Siemens business," said Nokia CEO, Olli-Pekka Kallasvuo. Rick Rick Sim Simonso onson n join joine ed with ith Nokia okia sinc since e 2001 and occupies the position of CFO since 2004. At its new venue, as head of the Mobile Phones division, Rick will ill be ful fully respo espons nsib ible le for for the the sust susta aina inabili bility ty of products outside the smart phone Earlier, Nokia reported a decline in profits that they produce in the third quarter of 2009. Nokia profit falls to 391 million pounds, equivalent to Rp5, 96 trillion (Rp15.243 per pound) compared to the same quarter last year, which reached 1.3 billion pounds. Even the sales growth of Nokia fell 20 percent year on year to 9 billion pounds. This report has been commissioned by top management at Nokia to produce an implement plan concentrating on people's aspects of implementation of the new environmental initiative of reducing its carb carbon on foot footpr prin intt by intr introd oduc ucin ing g a comp compan any y wide wide cent centra rali lize zed d mana manage geme ment nt info inform rmat atio ion n syst system em and and poli policy cy focu focuse sed d at redu reduct ctio ion n in pape paperr and and prin printi ting ng usa usage. ge. Ther Theref efor ore e the the spec specif ific ic obje object ctiives ves of this his report can be highlighted ted as to understand the dynamics of environmental initiative for the organization, to analyze the impact of this initiative on the attitude and behaviour of employees, and to recom ecomm mend end an impl imple ementa entati tion on pla plan focus ocuse ed at 53
soft softer er aspe aspect cts s of orga organi niza zati tion on for for the the succ succes essf sful ul change management.
Conclusion
The Nokia is really connecting its people le,, though there are employee ees s that will affected by the organizational changes. An effectiveness of an organizational change is satisfying the 54
stakeh stak ehol olde ders rs go goal al’s ’s an and d int inter erest ests. s. Th The e effe ef fect ct of or orga gani niza zati tion onal al ch chan ange ge in th the e view of the stakeholders is inconceivably high. The possibilities of the success and loss plays in the middle of the company, not until every propose sed d projects was deplo loy yed. No matter how many times a company imposed organizational change; the success for the new plan will be useless if the appointees were not cooperating
Conclusion As Nokia is the the leading manufacturer of mobile phon phones es whol whole e over over the the worl world, d, its its new new stra strate tegy gy of dive divers rsif ific icat atio ion n in Noki Nokia a Mobi Mobile le Netw Networ ork k will will be at great success, also customers are loyal to Nokia and Nokia has positioned itself properly in the minds of
55
all the customers. It will be easier for Nokia to attract its its exis existi ting ng cust custom omer ers. s. Besi Beside des s this this Noki Nokia a with with its its latest technology and strong networks is laying more stress on rural areas where till now no network has satisfied rural people. Noki Nokia a main mainta tain ins s disti distinc ncti tive ve adva advant ntag age e over over thei theirr current and futur ture competit tition without patent protection But But on the the oth other Ha Hand nd the the prod produc ucts ts from from the the Finnish company, Nokia, are some of the very best in the world, but the company stil till hasn’t found a profitable way to market its goods. The very reason that other mobile phone companies are fast eating up Nokia’s market share is their superior (yet simple) marketing practices. Motorola and Samsung must now be in the FUW (frequently used words) list in Nokia’s board meet meetin ings gs.. Thes These e comp compan anie ies s have have made made Noki Nokia a pay pay dearly for its undeveloped approach in marketing its phones. The aggressive marketing practices followed by Motorola have hit Nokia very hard and it is losing very crucial global market share every month to its American competitor. Hence if Nokia doesn’t take much care of this matter he will face tough time in the Future.
56
Suggestion For improvement Nokia
Nokia Nok
Should Encourage Diagonal Alliance. nee need to brea reak out of Cit Cities ies to Rural ral
areas. Focus Nokia
on youth i.e. imaging and games. need to reframe its Strategy for US
market. It
need needs s to crea create te affo afford rdab able le alte altern rnat ativ ive e of
Black Berry. Nokia
should reduce its prices According to its
Competitors. Nokia Nok
shou hould enha enhanc nce e its its voic voice e and sou sound
Quality. 57
It
should reduce heavy wait of cell phones.
Also
concentrate on the size of cell phones.
Nokia
must analyze its cell phones style and
designs.
58
