Contemporary Issues in Business and Management - Essay Example

? Contemporary Issues in Business and Management Table of Contents Introduction 3 Nokia: A Brief Overview 3 Contemporary Issues 4 Business Environmental Issue 5 Corporate Culture Issue 6 Addressing the Issues 7 Business Environment Issues 8 Corporate Culture Issues 8 Conclusion 9 References 10 APPENDIX 12 Reflection 12 Introduction It is an undeniable fact that a business does not exist or operate in vacuum rather it operates in an environment that directly influences the operation of the company (Gitman and McDaniel, 2008). The environment in which an organization persists is often referred to as the external business environment. The external business environment includes demographic, social, cultural, political, legal, economical, technological, and environmental factors. The environment in which an organization operates, significantly impacts every aspects of the business. The business strategy, marketing strategy as well as the operational strategy of a company is highly dependent on its external business environment. In addition, the internal functions of the business are also impacted to a large extent (Lamb, Hair and McDaniel, 2010). In the same way, corporate culture is also a crucial factor for a business to operate efficiently in the market place. According to Daft (2009), corporate culture acts as the most important mechanism for attracting, retaining and motivating the talent. In the similar manner, different scholars have laid emphasis to the fact that a company’s value is dependent upon the way people are treated in an organization (Daft and Marcic, 2010). In this study, we will try to uncover the importance of business environment and corporate culture in an organization. The company chosen for conducting the study is Nokia and according to the report Nokia is currently dealing with issues pertaining to external business environment and corporate culture. This study will also underpin how the company is dealing with these prevailing situations. Now getting further deep into the study, a brief overview of Nokia is presented below. Nokia: A Brief Overview Nokia is a Finland based multinational company that operates in the field of information and communication technology. The company was founded in the year 1865 and is presently headquartered at Keilaniemi, Espoo, Finland. The founders of the company were Leo Mechelin and Fredrik Idestam. From the date of its incorporation, the company has always tried to offer customers with high product value (Bontje Musterd and Pelzer, 2011). In addition, the company also aims to connect the whole world with their technology offerings. Such intentions also reflect in their tagline which states “connecting people”. The principal products of the company are portable IT devices and mobile telephones. Apart from that, Nokia also sells different type of games, application, media, music, and messaging platform through the company’s OVI platform. Similarly digital map and navigator services are also provided without any cost through Navteq, which is a wholly owned subsidiary of Nokia. The company is divided into three divisions namely mobile phones, mobile solutions, and markets. The mobile solutions division is responsible for overseeing Nokia’s portfolio of mobile computers and Smartphone, whereas the mobile phone division is responsible for administering the product portfolio of mobile phone. The market division looks after the supply chain and distribution activities (Yahoo Finance, 2012). The company has also entered into various strategic alliances which helps them to cater to diversified customer base and large geographical locations. Vertu, Navteq and Nokia Siemens networks are some of the strategic alliances of the company (Plunkett, 2009). Some of the major competitors of the company are Samsung, Apple, HTC, Motorola and the local players of the market (where Nokia is having its operations). Until 31 December, 2011, the company had an employee strength of 130, 050. As of financial year 2011, the company had staggering net revenue of €38,659 billion (Nokia, 2011). Studies reveal that due to increased competition and turbulences in the business environment, an organization has to deal with A number of reports reveal that a company has to deal with several issues that arise due to turbulent business environment. The issues mainly generates in the form of economic downturn, political instability and cultural differences among others. In the next part, the study will underpin the issues faced by Nokia and will also reveal how the company dealt with these contemporary issues. Contemporary Issues It is proven fact that any company operating in an environment, has to deal with several types of issues. The issues rise from different spheres of the business environment and the level of impact depends upon the intensity of the problem. According to Jones and Mathew (2008), an organization has to deal with several external factors, but to prosper and survive the company has to adapt itself to the situation raised. The author also highlighted that companies should make alteration to its culture and structure throughout its life cycle. Moreover, if a company succeeds to manage those changes effectively, it will be able to differentiate itself and confirm growth in the market place. Apart from that the author also portrayed that it is important to identify the persisting issues so as to get least impacted. Thus from the findings, it can be stated that every company should adapt itself to a changing and uncertain environment and try to prevail over the organizational inertia, which persistently intimidates the capability of the organization to adopt in the changing business environment. Nokia is also dealing with some contemporary issues. Some of the common areas of concern for the company are counterfeit products, turbulent environment, declining sales, unsound corporate culture and also high attrition rate. However among its existing issues the two most viable ones are the subjects related with the corporate culture and business environment. The two issues that have been identified as the most important issues are discussed below: - Business Environmental Issue Nokia has presence in large number of countries of the world and the external business environment of one country differs from the other. The differences mainly come in the form of culture, political and legal frameworks, environmental and social differences and also the technical infrastructure of the host country. Therefore from the aforesaid fact it is clear that the company is dealing with different laws and different environmental condition. This phenomenon forces the company to modify its strategies according to the area of operation. In addition, such factors at times hindered the business operation of Nokia. Moreover, since Nokia is a global brand it has to remain updated about the happenings of the countries where it operates. Therefore, remaining aware of the external environment will facilitates the company to prosper in the international market. Now according to the requirements of this study, Nokia is dealing and facing strong issues in the field of external business environment. The company is getting affected by all the elements of an external business environment. Some countries have certain laws pertaining to the mobile phone standards and features. For example the government of many countries do not allow the mobile companies to provide GPS system into the mobile, citing security concerns. In addition, there are a number of technical constraints in the target countries due to which Nokia is unable to offer a range of application that requires high end technical infrastructure. For example, Nokia is unable to offer 3G based applications due to unavailability of 3G network in several countries of the world. Similarly due to cultural differences among the countries, the company gets affected. Most importantly, the social factor can be considered as one of the deciding factors for a company’s success in the market place. Also it determines the acceptance of a product in the market. Hence it forces the company to manufacture the phones as per the guideline of the telecom regulatory authorities of the respective countries. Apart from the product related concerns, the internal operations of the company is also getting adversely affected by the impact of external environment. Due to governmental regulations, the company has to follow the employment rules and other health and safety measures of the country of operation. At times, the external factors have also led the company to witness public relations (PR) crisis. In addition, the aforementioned issues also increase the operating cost of the company and therefore to a large extent, the external environmental factors affected the company. Therefore considering all the findings from the study it can be stated that the contemporary issue pertaining to external business environment is relevant to Nokia. Corporate Culture Issue Corporate culture is crucial towards creating and developing an organizational atmosphere that fosters innovation and learning. In addition, corporate culture also plays an important role in holding the employees together and generating a sense of harmony throughout the organization (Kono and Clegg, 1998). According to Layode, organizations that possesses strong organizational culture fosters the employees to perform well, makes employees feel valued and also enhances its chances of retaining and attracting the performing employees (Ndumanya, 2012). In general the organizational culture is divided into four major groups. They are adaptability, achievement, consistency and involvement. All the four cultures depict different characteristics and features. The companies which follow adaptability culture detects any changes at a rapid pace, and also construe and respond to the environmental changes at a fast pace. The achievement culture makes an organization aggressive, competitive and makes them to focus only on personal achievements. The companies which follow involvement cultures portray features such as cooperation, employee focus, caring as well as a family-like feel. On the other hand companies which follow consistency culture are rule bound, methodological as well as rational. Now several reports reveal that Nokia is facing issues in upholding its corporate culture. According to the CEO of Nokia, the company is facing many issues because of the fiercely insular culture (Johnson, 2011). This has led to the loss of brand reputation, market share and also resulted into declining sales. The unsound corporate culture of Nokia has restrained them in many ways. One of the most prominent examples about the unstable culture of the company is its decision of not upgrading the operating system of the mobile phones. This phenomenon clearly reflects the company’s unstable culture. In the age where competitors of Nokia such as Samsung, and Apple are upgrading to sophisticated operating system, Nokia failed to incorporate the change into their organization. Some marketers portray that the negative approach of the company towards incorporating change within the organization is one of the prime reasons for Nokia’s reduced market share. The inability to implement change in the organization reflects the unstable corporate culture of Nokia. Although the company claims that, it emphasizes on flexibility and speed of decision making to impose changes, but in reality the company failed to implement it. The company also believes in equality and openness within the organization which can nevertheless be referred to as a positive aspect of Nokia’s business (Nokia, 2012). Therefore considering all the findings from the study it can be stated that the contemporary issue pertaining corporate culture is relevant to Nokia. Addressing the Issues It is important for every company to address the persisting issues cleverly. However if the company fails to deal with crisis situations, it may not be able to operate effectively and even at times may force the company to close down the operation. Now in the context of the study, Nokia is facing issues in the field of external business environment and also corporate culture. The next segment will illustrate how the company has dealt or is presently dealing with the identified contemporary issues. Business Environment Issues The external business environment issues are primarily affecting Nokia’s market value and also increasing the operating cost of the company. Now in order to deal with these areas of concern, the company has chosen or rather implemented a strategy which ensures they get least impacted by the external environment. Earlier the company used to function with overall product from single market, but now the company concentrates on the global market and remain focused towards a particular segment. This strategy has helped the company to reduce cost and also market only those products that satisfies the legal regulations of the host country. One of the biggest problem that the company has been facing since long is related to the price of mobile. The phones of Nokia are priced high, which curtails certain section of the society to afford a Nokia phone. The society comprises of individuals who belongs to high income group, middle income group as well as low income group. However Nokia failed to target the low income group population due to its costly ranges. Now in order to deal with this concern, the company has launched several low end products, by which they can target individuals who belong to the lower income group (Srivastava and Verma, 2012). Apart from that the company has also taken specific steps to overcome any concerns of environments. Nokia once faced huge PR crisis due to faulty batteries. Therefore in order to ensure such thing do not takes place again, Nokia has decided to go through a pilot study prior to launching any new products. The pilot study however is carried out internally i.e. with the feedbacks of the employees. The aforementioned strategies are employed by Nokia to deal with the prevailing issues pertaining to the external business environment. Corporate Culture Issues In order to deal with the issues pertaining to the corporate culture, Nokia has strived to transform their company into flat and networked organization. In addition, the company has also ensured flexibility in the decision making process. Apart from that the company has also taken several initiatives to deal with the unsound corporate culture. One of the most viable decisions of the company was the emphasis on employee participation and management leadership. In addition, Nokia has also focused hard on the customer satisfaction process to ensure repeat sales. The implementation of new operating system (windows) in the mobile phones of the company is a step forward towards modernization and also a product to compete with the android OS. Nokia has also substantially increased the expenditure on the research and development programs and encouraging employees to be innovative (Ammon, 2009). Hence like these ways, Nokia is dealing with the issues pertaining to the corporate culture of the organization. Conclusion The study was about identifying the importance of external business environment and corporate culture for an organization. The report was also about how these factors impacts in the decision making process, operation and other aspects of the business. For this study Nokia was chosen to evaluate the importance of the aforementioned areas in an organization. In addition, through this research report what are the issues that Nokia is facing and how the company is dealing with it are also uncovered. The study reflected that Nokia is getting highly impacted from the instable corporate culture and turbulent external environment. It mainly comes in the form of increased cost, strategic changes and at times caused PR crisis. In addition, due to instable corporate culture the company has faced difficulties to maintain harmony within the organization and also failed to incorporate changes. On doing research about how the company dealt with those situations, it revealed that the company has taken certain strategic initiatives. For example the company now utilizes focus strategy and launched several low ranged products. However it is recommended to the company that they should analyse the environment deeply and consider the cultural difference prior launching any new product in the market. References Ammon, F., 2009. The Eastern European Expansion of the Eu: Are International Enterprises Only Competitive by Offshoring? Munich: GRIN Verlag. Bontje, M. A., Musterd, S., and Pelzer, P., 2011. The Inventive City-Region: Creative Knowledge Strategies for European City-Regions. Surrey: Ashgate Publishing, Ltd. Daft, R. L., 2009. Organization Theory and Design. Connecticut: Cengage Learning. Daft, R. L., and Marcic, D., 2010. Understanding Management. 7th ed. Connecticut: Cengage Learning. Gitman, L. J., and McDaniel, C., 2008. The Future of Business: The Essentials. 4th ed. Connecticut: Cengage Learning. Johnson, B., 2011. Nokia Crisis Highlights Internal Struggle. [online] Available at: [Accessed 17 December 2012]. Jones, G. R., and Mathew, M., 2008. Organizational Theory, Design, and Change. 5th ed. New Jersey: Pearson Education Inc. Kono, T., and Clegg, S., 1998. Transformation of Corporate Culture: Experiences of Japanese Enterprises. Berlin: Walter de Gruyter Lamb, C. W., Hair, J. F., and McDaniel, C., 2010. MKTG. 4th ed. Connecticut: Cengage Learning. Ndumanya, N., 2012. How Organizational Culture Affects Business Performance. [online] Available at: [Accessed 17 December 2012]. Nokia, 2011. Nokia in 2011. [pdf] Available at: [Accessed 17 December 2012]. Nokia, 2012. Our People & Culture. [online] Available at: [Accessed 17 December 2012]. Plunkett, J. W., 2009. Plunkett's Infotech Industry Almanac 2009. Texas: Plunkett Research, Ltd. Srivastava, R. M., and Verma, S., 2012. Strategic Management: Concepts, Skills and Practices. Haryana: PHI Learning Pvt. Ltd. Yahoo Finance, 2012. Nokia Corporation (NOK) –NYSE. [online] Available at: [Accessed 17 December 2012]. APPENDIX Reflection The last assignment which I did was based on international marketing. The topic of my assignment was Advantages and Disadvantages of Implementing a Global Strategy. The objective of my study was to underpin the pros and cons of different international market entry strategy. Through that report I have also tried to gain insights of the different foreign market entry modes. In addition, I have also tried my level best to understand the risks associated with foreign market entry. After submitting the report, I received the valuable feedback from my mentor about the quality of the assignment and the areas where I need to concentrate more. According to my mentor, the report which I did before was of average quality. The tutor has given clear feedbacks in every department and that helped me a lot for the current assignment titled Contemporary Issues in Business and Management. The tutor has pointed out that I have satisfactory level of knowledge about the area of study. However I made few mistakes which can be resolved. In terms of application, analysis and evaluation of the assignment, the tutor has clearly highlighted that I lack expertise in these areas and needs serious improvements. Apart from that the other aspects such as creation or synthesis of new ideas, development and self management, and communication level was also poor. From the comments of the tutor I have identified that I lack communication skills and I have also failed to express my views properly in the paper. Nevertheless the most important feedback that I received from my tutor is that, I did not answer the actual question of the research and I did not responded directly to research objective. Additionally, I have also failed to provide examples and cite sources where I needed to be. With these statements from my tutor I got a clear idea about the areas where I need to focus more and work hard. The comments have greatly helped me to accomplish the current assignment. It has made me more careful and attentive. The feedback of my tutor has also assisted me to rectify the mistakes which I made in the earlier assignment. For example, in this project I have only concentrated on the objective of the research and tried to remain in context with the research question. This has also assisted me to cite proper sources wherever needed and follow a particular citation style. In addition, the comments fostered me to learn the basics and structure my research in such a way that I create a quality report and deliver it on time. I have taken the comments positively, which motivated me to complete the new assignment as per the instructions. Also it has taught me about how to monitor a project and focus only on the research object. Hence from an overall viewpoint, it can be stated that the feedback which I got from the tutor, highly motivated me to accomplish this new assignment. Read More