The Competitiveness of Nokia Corporation - Case Study Example

Managing Change Nokia, which has been the seller of the highest number of mobile phones in the world, is facing serious threat from its rival with its revenues declining; this struggle of the Nokia mobile manufacturing company has coincided with the increased uptake of smart phones in the world. One of the contributing factors to the decline of Nokia is its lack of innovation in developing new products and the entrance of the android operating system for smart phones in the market. This has forced Nokia to collaborate with Microsoft to help in boosting its revenue and try to penetrate the North American and other developed mobile markets that has a small percentage uptake of Nokia mobile phones. However, in order for the company to remain competitive it has to adopt a change management structure that will see it recover on the market share that it has lost to other companies such as Samsung, Apple and other smart phone manufacturing companies. This essay will discuss the change management and how it can be used to improve the competitiveness of Nokia corporation. Change is the process through which the business patterns and trends deviate from the norm and take another path, for instance the clients’ demand may change from certain specification inherent in a product to wanting a similar product but with different specifications. The process of change is key in driving creativity and innovations of a business and varies with the demands that an environment a business is operating requires, change will be key to new ways that make the interactions in an environment easier and better. Change in an organisation can take various forms , some of these forms that the change take include: tuning type of change that involve those changes that increase the efficiency of an organisation and reduce operational costs, they include activities like improving policies, improving procedures and methods, introducing of new technologies, improving processes aimed at cost reduction among others. Another form of change is the recreational change that entail transformation of a whole organisation through changing its core elements simultaneously, this gives an organisation a new look and leads to readjusting of the goals that had been set in the organisation. The third type of change is the reorientation where an organisation changes its direction of operation or business by supplying the market with new products or diversifying its business activities. The fourth type of change that can be analysed is the adaptation, which entails an organization continuing with its line of operation where there is improvement in the organisation that increases efficiency. Other types of change that exist include the continuous change where there is gradual change in an organisation that can lead to transformation of the organisation and the discontinuous change where changes happen at once (Todnem By, 2005) Several factors that affect change in the life of an organisation; these factors can be divided into external factors that are beyond an organisation’s control and internal factors, which occur within the organisation. The external factors that affect change in an organisation include technology; when technology changes, organisations have to adopt the new technologies otherwise they become less competitive since the old technologies become less cost effective. Change in legal and political environment also affects an organisation to change, for instance change of the laws or leadership may come with a new way of doing things that may force the organisation to change. The market conditions like the behaviour of other firms or that of the buyers may change, this requires a firm to change its ways of operation in order to remain competitive in the market. Social changes such as the way people’s preferences change may force an organisation to change in order to meet the needs and demands of its clients. Diagnosing the need for organisational change is dependent on whether the change is external or internal, there are various models that can be used to diagnose the need for change in an organisation that include; total and component model that looks at the specific areas in an organisation to detect where the changes should apply (Reynolds & Holwell, 2010). Open system theory that operates on the premise that a change in one part of an organisation can cause changes to other parts. Others are contingency theory that looks at how the various processes and departments within an organisation are related and the Korter’s theory look at the relationship s between the environment that the organisation operates within and how it affects the various organisation processes. Implementation of change depends on the factors that cause the change and the parts of the department that is affected by those changes; implementation of change is carried through several steps. They include unfreezing which involves identifying and stopping the factors that cause the organisation not to change, changing the areas that maintained the status quo and then refreezing the areas of the business that have been adjusted to allow for growth. The process of change management involves several steps, they include, first is understanding the strategic context that a business operates in, this involves both external and internal environment (Fitzgerald et al, 2006). In the internal environment, the first activity that a business does is the identification of the core purpose of the business, values and goals which it intends to achieve (Bisbe & Melaquero, 2012). These then helps the management to come up with an overall vision of the organisations and the direction it will take. In defining the purpose of the organisation, Nokia should find the reasons why it was formed or what its operations gives out as end products, this involves finding the values that the business regards as critical to its success and are held irrespective of the norms in the organisation or the management style being used. The visionary goals of the organisation is the outlook of the company in future, that is how the company will be in the future and includes the achievements it hopes to have achieved by that time, these goals should be set on a period of 3 to 10 years (Slack, 2006). In the external environment, Nokia corporation should surveys the market for its products and the rivals in the market, here, they will be seeks to understand their target market and why it is necessary for the business to centre its operations on them, this activity is known as the stakeholder value proposition (Smith, 2007). In order to carry out this activity, the corporation can use several tools that have been created that include Porter’s five forces framework. In the internal environment analysis, it will analyse its strengths and weaknesses where it evaluates its internal performance and the resources that it uses in the discharge of its responsibilities. This process will enable the corporation to understand the effectiveness of its production process, how productive and creative the employees are and how these can impact on the performance of the business (Penger & TekavčIč, 2009). Model of the business is the next stage that the company should undertake in change management, in this step the business organisation puts together all the key elements of the business strategy and visualises it. Using the Kaplan and Norton’s method, the result of this step will be strategy map while using the Marr’s methodology then the result will be value creation map and value creation narrative (Macmillan & Tampoe, 2000). Both of these methods used in this stage produce almost the same results with them communicating the business strategy excellently and giving the tools to measure the progress of the organisation against its business strategy, in addition, these methods enable a business organisation to relate it’s strategies to the various activities within it (MacPhee. 2007). The use of these methods in the case of Nokia corporation will help in creation of a strategy that will ensure its lost market share by being ahead of its rivals in creativity and introduction of customer focused products in the market. The company should focus on remodelling a business that involves setting several measurable goals that include both the operational goals and the strategic ones, the goals set are then measured and monitored through the use of several indicators that are known as key performance indicators (Slack, 2011). For the process of data collection and measurement to be efficient and free of errors, it is required that the business organisation should try as much as possible to use automation methods. The raw data that is collected should never be used to make decisions in the business since it is most likely that the management will use only the data they think is relevant to their case which in essence may not give the real picture of the situation, therefore leading to wrong conclusions. Data should be analysed first before it is used for any decision-making process so as to avoid ambiguities, special attention should also be given to the data analysis and collection process to ensure that the quality of the information that is produced can be guaranteed to the management and usable in decision making (Oakland & Tanner, 2007). The information that should be presented to the management should be in two levels, operational information is used by the management to measure the performance of the organisation against the set goals that were to be achieved within the current timeframe (Kondalkar, 2009). This information is used in making the necessary adjustments to the various processes of the organisation but it can also be used to measure the current performance with respect to what the company targets to achieve in the future. In the process of change management, Nokia corporation should also be involved in strategy evaluation. The following steps can be identified; the first step is fixing the benchmark of performance, in this step the management need to put into considerations the special requirements that are necessary for performance of a specific task; the key performance indicator will be helpful in identifying these requirements. In accessing the performance of the organisation, it is of paramount importance that the evaluators use both the quantitative and qualitative aspects of the organisation, the qualitative aspects include the skills and productivity of employees, flexibility and the limits of risk taking among others, the quantitative aspects include the return on investments, net profit and employees’ turnover among others. The second step is the measurement of performance, which should be carried out after the benchmark performance levels have been established. The benchmark performance that has been identified is used to compare the performance of all other periods, however in the measurement some factors are hard to measure such as the managerial contribution to the process or divisional performance, therefore relevant variables have to be identified for objective measurement of the above factors (Keller & Aiken, 2009). These measurements must be done at the right time otherwise their importance will reduce; such performance information as the financial position of the business which include balance sheets should be prepared annually at the end of each financial year for them to be useful in performance measurement. The third step is analysing the variance where the evaluators look at how much the actual performance has deviated from the benchmark performance. A negative variance shows that the business has fallen below its set targets and therefore the management should look into the causes of the discrepancy and act accordingly to improve the performance. After the evaluators have identified the extent of the discrepancy, they go ahead and analyse the factors that may have caused the deviation. If they find out that the performance of the organisation does not match with the potential of the organisation, they management may consider revising down the standards or as a measure of last result, reformulate the whole strategy to match the potential of the organisation. A key benefit that will accrue to Nokia corporation for embracing change management is that they will be able to adjust their operations to fit into the future and therefore anticipate it (Hauc & Kovač, 2000). This will ensure that they will be able to predict the trends in the mobile industry and therefore channel the resources towards meeting the market needs hence increased competitiveness. References Bisbe, Josep & Melaquero, Ricardo. 2012. “using strategic performance measurement systems for strategy formulation: does it work in dynamic environment?” Management Accounting Research. 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