To improve is to change; to be perfect is to change often.

Winston Churchill (1874-1965) British Politician

 WHY NOKIAS ORGANIZATIONAL CHANGES IS NECESSARY ?

Q3 2011 Market Share 2012 Market Share 2013 Market Share

23.9 24.6
22
18.7 19.1
13.9
8.3 7.5
3.2
S A MS U N G NOKIA APPLE

Source: Gartner (2014)

 MAJOR ORGANIZATIONAL CHANGES IN NOKIA

1990 2006 2007 2011 2013

Core Strategy Mapping Capabilities Joint Venture Joined Microsoft Moved to Microsoft
ANALYSIS OF THE PRESENT CRISIS
And Identifying the change triggers

Our investigation shows that Nokia is facing some

serious difficulties and Nokia must go through some
massive organizational changes to respond to the
perils.
How were the responses?
We asked some cellphone users a few key questions and Nokias miseries got revealed

Nokia once was a tech giant ,

but now?That story is only a
history.

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.
Currently Using First Phone

29% 71% 70%

Nokia Others Nokia

Brands
Symphony 32% Nokia has lost a huge
Samsung 13% portion of its loyal
Sony 10% users
iPhone and others 16%
Operating Platform Preference
People like user friendly , bug free, touch based operating systems

7% 13%
79.3 %

Windows
iOS Android
Mobile OS
iOS is popular for its great Android is regarded as Windows mobile OS is not
touch sensitive interface most user friendly, much appreciated by users
and smoothness of universal and easy to use and they use it just
application running with nice use of colored because they come with
themes Nokia
 Microsofts Acquisition of
Nokia
And the reactions

41% It will be a success

It will be a failure
55% Uncertain

4%

The majority believes that tagging with Microsoft is a

wrong decision
 Key change triggers
A glimpse of the factors that are indicators for bringing change
Rise of touch-based
modern smartphones
Nokia failed to respond to
growing touch based
smartphones while HTC,
iPhone took the full advantage
Monopoly
The Finnish phone maker
launched phones with
innovative features and
different form factors to
quickly respond to the
markets needs, which led it to
become the largest handset
manufacturer in the world
 Market disruption
brought by the Apple
iPhone
In January 2007, Apple launched
the iPhone, a revolutionary
smartphone that packs with a large
capacitive touch screen that
supports multi-touch gestures.

Bureaucracy
An ex-manager in Nokia estimated
that Nokia used to have over 300
Vice Presidents and Senior Vice
Presidents around the globe
Sources of Resistance to Change

Inside the Resistance to Outside the

organization: organization :
Employees resistance Change Markets resistance
Employees Resistance

Losing job
Fear of employee Changes in job role

Disagreement with Holding their excellence as the cause of failure

management Getting into the partnership with Microsoft

Wave of Key personnel

Skilled employees
resignation Lay-off by Microsoft

Uncertainty avoidance
Cultural difference Masculine vs. Feminine
Markets Resistance

Alliance of Nokia and Microsoft

Customers Embracing Windows as operating
resistance platform

Fear of losing business of international

Network operator calling
and Intels resistance Choosing MS as strategic partner

Software developers Principles of open source vs.

and shareholders proprietary platform
resistance Decrease in the value of market share
Kubler-Ross Five Stage Model

Kubler-Ross described five stages of grief in her 1969

book "On Death And Dying that are just as relevant to
the normal range of feelings people have when they
are dealing with change on an individual level or in the
workplace.
The Grief Cycle 5 Stages of Grief

Stage Interpretation
Denial is a defensive response. It is the conscious or unconscious
Denial refusal to accept facts, information or reality relating to the
situation.

When people deal with emotional upset they can get angry with
Anger
themselves or with other people.

Bargaining People facing change often seek to negotiate a compromise.

During periods of change people may feel there is little purpose in

Depression
their work.

Eventually people pass through the period of depression and begin

Acceptance
to accept the their loss or change in circumstance.
The stakeholders reactions on Nokias strategy change can be
reflected on the Kbler-Ross grief model:

February-March 2011
Thousand of
employees walked out
of office Users: Can I reuse the apps I
Protest from consumer purchase in my Symbian phone on
Bad comments on my windows phone
Nokia Facebook page
Anger Nokia : no
Developer: can I use QT to write
Emotional Response

windows phone apps

Nokia: No

Bargaining
Lumia phones lunched
February 11 ,2011 in Q4 2011:
announcement Users : I like the
Users: So now fluidity and the great
Switch to these Lumia
windows phone camera on the Lumia
devices are out. phone! I will buy
Abandon Let me try them
Symbian one.
out and see how Profitable Q4 2012
Shock I feel
Acceptanc
Test e
Depressio
Denial n
Initially, some consumes Nokia share price dropped
and even some employees significantly
did not believe the change Many long time Nokia users and
was true developers are disappointed and
Time switched to android
EVALUATING NOKIAS STRATEGY CHANGE
KOLB AND FROHMANS CHANGE MODEL

Scouting Entry Diagnosis

Planning Action Evaluation

Termination
Conclusions and Recommendations

Quality offline maps

Camera innovations

Superior hardware design

Intuitive user interface decision

Solid manufacturing capabilities

Dominance of feature phone markets

Great patent portfolios

THANK YOU ALL