Raising capital and loans from foreign capital markets has a number of benefits and a few disadvantages as well. 1. Our Group Leadership team is responsible for the operative management of Nokia. Signal word. Responsible for the operative management of Nokia. Despite the company being the largest phone company in the world, the company is facing a number of strategic issues that if not addr… Organisation Structure Of Nokia Company. Despite these tough circumstances Nokia continued to expand product development and introduced new products in the mobile device markets, new systems and networks from Nokia Siemens Partnership and navigation phones under the NAVTEQ division. ⏰ Let's see if we can help you! The return on equity declined significantly during 2008. Nokia is an international phone company that is currently leading in the phone segment of the electronic market in the world; the company’s organizational structure has enabled it to command the success it has attained. It is a method of optimal brand strength by creating additional sales. Organizational theory emphasizes that every organization has potential to become competitive in its industry if it organizes the assets, both physical and intangible, that it has. As of October 1, 2009 the organizational structure at Nokia was extremely mobile and flexible. New York: McGraw-Hill Irwin. • It has introduced various innovative measures in its people process that helped achieve a positive employer image, create a platform for growth and development. The services department creates and designs internet services that enhance the consumer experience when Nokia phone users interact with the web. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. For full functionality of this site it is necessary to enable JavaScript. Nokia’s strategy is about investing in and ensuring Nokia’s future. The people who helped Nokia to become the best company were no longer there. Overall companies are suggested to find an optimum equity and liability combination by working out the WACC at different levels. The company currently enjoys a market share of about 37% and aims at increasing the market share to over 40% by the end of 2011; however, the company is facing a number of strategic issues, which has made its profits and sales reduce in the recent past and overtaken by Apple Inc. products. Similarly the company faces challenges from Samsung and Motorola in the touch screen phone markets and the latest Android based phones that offer efficient and extremely user friendly interface to consumers. - Nokia fired a number of R&D employees in order to cut costs as of just weeks ago (Pepin G. 2009). It ensures that the business is run in the right way, and thus determines the current as well as the future state of the business (Bateman & Snell, 2011). In 2014, Nokia employed 61,656 persons all over the world. According to the auditors and company information strict guidelines are followed in terms of code of conduct and ethical behavior of each employee. About 1% of the shares were owned by Nokia Corporation during 2009. The major problem faced by Nokia mobile devices sales was the fact that as macroeconomic aggregates plummeted world wide; people were laid off, disposal incomes squeezed and purchasing power declined in some regions because of currency depreciation, all these factors led to the decrease in demand for Nokia phones. The diagram below is an illustration of a tall organizational structure similar to that of Nokia. Though this cost is offset by the point that today’s financial markets are so dependent on each other that market risks are almost similar in virtually all countries and their stock markets. Safety alert symbol. • Nokia’s organizational structure is fluid, flexible and driven by the mentors in the organization, which is task or project-oriented. This is one of the reasons for how internal working affected their company. This is because countries such as India and China are experiencing large demand for mobile phones due to the rapid growth and development of infrastructure especially network infrastructure. New York is the financial capital of the world’s largest economy and having the ability to raise funds in such a market builds great reputation for a company apart from substantial capital. IvyPanda. This again explains the difficulty the company faced during 2008 in terms of low sales volumes, depressed prices and difficult financial conditions. Nokia Weakness. We will write a custom Essay on Nokia Organizational Structure specifically for you for only $16.05 $11/page. The group has a policy of not hedging 2-year or beyond forecasted foreign currency cash flows. The main areas that need to be looked into include the strategic alliances division, innovation and invention section of the company, and the organizational culture adopted by the Company. In terms of hedging and controlling the foreign exchange risk I think the financial managers did a good job by employing a prudent policy of hedging all those cash inflows and outflows which were due within 2 years period. As of October 1, 2009 the organizational structure at Nokia was extremely mobile and flexible. Qualitative means the right number of employees and qualitative means employees with right skills. Nokia shifted to the matrix structure. Because Nokia owns substantial assets in foreign markets therefore the company has to hedge and protect itself against the potential of currency adjustments in the negative direction. SDRs provide a substantial capital inflow in lieu of a stable and known cost of capital that gives the firm’s financial cost structure sustainability and consistency. Nokia. Study for free with our range of university lectures! It reported annual revenues of around €12.73 billion by conducting sales in more than 151 countries. Managing human resources has been an ignored area in traditional business management, however with modern strategic management; managers increasingly understand that the success of their organization is highly dependent with how well they manage their human resources. It is important to note here that China and India; the fastest growing economies in Asia are leaders for Nokia sales; secondly the list also contains growing markets such as Brazil and Russia. For instance the return on equity was around 53% during 2007; that is a phenomenal return for shareholders from a company that competes in such a tough competitive environment. The above graph shows that profitability peaked during the 2007 period and steadily declined thereafter this also shows the difficult financial and economic environment that was weathered by the corporate sectors of different economies. In 2009, out of the total sales from the company Europe accounted for 36%, China’s share was 16%, Middle East & Africa 14%, North America 5%, Asia-Pacific 22% and Latin America 7%. The SWOT of Nokia discusses the strengths, weaknesses, opportunities and threats of Nokia which is one of the leading mobile handset manufacturer in the industry. Retrieved from https://ivypanda.com/essays/nokia-organizational-structure/. the hedging cost is lower or market liquidity is favorable. Bridging organization theory and supply chain management: The case of best value supply chains. Business. If we closely analyze the net debt to equity ratio for the 5 year period we see that initially in the years 04, 05 06 and even 07 the company had surplus assets over total debt. (2019, December 6). (2019) 'Nokia Organizational Structure'. The database is updated daily, so anyone can easily find a relevant essay example. April 2014 für insgesamt übe… The company charter, article of association and Finnish Companies Act determine the roles and responsibilities of all directors and executive members. 6 December. Unfortunately, your browser is too old to work on this site. The corporate development department looks for future growth opportunities and it also plans for future strategic actions that will give the company a competitive advantage against competitors. McFarland, R., Bloodgood, J. and Payan, J.(2008). The expectations of the company for 2010 are considerably flat in terms of the performance of its various divisions. Through the 19th century the company expanded, branching into several different products. We also see that the company gave dividends in all the last six years under discussion; this also shows consistency and the right mindset of financial managers who rightly understand the need to rollout dividends in order to ensure continuous investments from investors in the near future. Indicates the severity of the hazard. "Nokia Organizational Structure." Nokia has a human resources management department with the role of ensuring staff needs have been addressed effectively, the department has the role of ensuring that the company has the right number of human capital at the right time at an appropriate cost. In the recent past, the phone industry has experienced a massive development, other companies like Apple Inc. and Samsung have pioneered however, Nokia, and it have not pioneered the development. Finally, the last major division is NAVTEQ; this unit is a provider of detailed navigational maps and digital map data automobile navigation systems, navigation systems for mobile devices, internet mapping applications and mapping solutions to government and other businesses. The devices unit looks after the development and management of mobile devices portfolio which is targeted at all major consumer segments. Another important factor was that short-term borrowings rose substantially during 2008. To change organisational culture is difficult and it takes time. NAVTEQ is an important part of Nokia’s operations since it provides downloadable maps and other content that will enhance the experience of consumers who use Nokia’s smart phones. ensure the integrity of our platform while keeping your private information safe. Lean Six Sigma Service Excellence: A Guide to Green Belt Certification and Bottom Line Improvement. Under the policy; transactions which are considered of material value are hedged against foreign exchange exposures as long as the hedging tool is not uneconomical i.e. December 6, 2019. https://ivypanda.com/essays/nokia-organizational-structure/. We utilize security vendors that protect and As demonstrated by Nokia, restructuring won’t cure an organization’s ills when approached from the same mindset that created the current problems. As we can see from these numbers that about 59% of sales are coming from the developing world; for a company that began operations from Finland that is an important statistics since most of its revenues are coming from international markets especially from developing countries. Published: 1st Jan 1970 in As strategic tool, Nokia have realized the need to have an effectively managed human capital; a company requires both physical and human resources for its operations; human resources are the greatest asset that an organization can have; without it, no business transaction can take place. Despite the slowed growth, the markets have a number of international players selling their products in the markets. From the table above we can see that the assets funded through equity has been on a declining run throughout the five year period. The new products are likely to b ea driving force for the company; Apple Inc. with the invention and invention of IPods and I-phones the company was able to control a niche market; a diversion from its main line of business that was desktops and computer software development. Changed the Organizational Structure. If we look at the table above we see that for the period 2004-08 the average R&D expenditure as a percentage of sales was around 11%. IvyPanda, 6 Dec. 2019, ivypanda.com/essays/nokia-organizational-structure/. 2019. Had Internal … Nokia’s direct and major competitors include Motorola Inc, Cisco Systems Inc, Research in Motion, LM Ericsson Telephone Co., and QUALCOMM Inc. Today’s complex, rapidly changing world requires a new operating system that provides organizations with the structures and processes to optimize their current core offerings, as well as the flexibility to develop new processes while responding to market changes. Hazard type. The company has its main operating base at Asia, North America and Europe, however these markets are becoming saturated with phones and the markets seems not to be growing. The company, by raising additional capital in new markets, not only increases its ability to spend money on acquisitions, development, and supply-chain but also gives credibility and higher standing to the company’s share in the capital markets and makes the company a strong candidate for a better rating from agencies. Nokia employs 50, 000 people in 120 countries. Looking for a flexible role? The important thing here is that companies like Nokia must be aware of the trade cycles and the economic cycles of the world and individual markets and there relationship between each other because that will determine the impact of raising capital in foreign markets. The difference between this navigation process that iPhone will offer is that consumers wouldn’t need to download maps for a price or they would not need automotive navigations systems rather they would use their smart phones as navigation devices at very low rates. Nokia is an international phone company, with its headquarters in Finland. "Nokia Organizational Structure." The unit is also responsible for sales channels, branding and marketing activities for various products and services. Wheelen, L., & Hunger, J. The above graph is again representative of the fact that the company’s stock performed better than most top company stocks during the boom period of 2007. Credit has to be given to the financial managers of the company since there prudent steps ensured a better than average EPS for the company and subsequently even better share price performance. As time goes, the structures of the company are becoming week calling for immediate actions to be taken to retain the glory of the company. Supply Chain Contagion. As we see from the table that the value declined to 27.5% from 53.9% in 2007. The company delisted its Swedish Depository Receipts (SDRs) from the Stockholm Stock Exchange. This is a prudent approach; secondly if we look at the table below we see that the company has remained profitable despite the financial and economic crisis that plagued the global markets for the past 2 and a half years. The solutions unit works with other departments in close proximity to provide such solutions. Nokia Company Overview. Our academic experts are ready and waiting to assist with any writing project you may have. In the late 20th century, the company took advantage of the increasing popularity of computer and mobile phones. HERE will continue to operate as a business of Nokia until the sale is completed, but is not included in the planned future organizational structure of Nokia. R&D expenditure dipped slightly during 2009 by about 1% compared with 2008 figures because of the decline in sales. It is very difficult to co… 2007 was considered one of the best years in Nokia’s history not only did the stock do well but the company’s other major indicators were in green as well. Copying files from PC - file structure How do I copy files to the 8.3? In 1967, the Nokia corporation was formed. Find out more about our board of directors. 31 - 40 of 500 . This is IvyPanda's free database of academic paper samples. ESPOO (dpa-AFX) - Nokia announced the planned leadership and organizational structure that it intends to implement after and subject to the successful closing of the public exchange offer for This report is an analysis of organizational structure of Nokia Phone Company; the report will analyze the current structure of the company and current strategic issues facing the company. This article presents one of Nokia’s reasons for failure and what you can learn to improve your leadership. Similarly the company complies with all stock market requirements of the Helsinki stock market, New York and Frankfurt stock exchanges. VAT Registration No: 842417633. NOKIA CASE STUDY - Irfan Mohammed -@02775411 There was a huge demand for Nokia ... Organisational structures Most businesses are organised into structures because having a structure enables them to meet their purposes and aims and it also means that each employee will be divided into the job they specialise in which would mean an increase in production and an increase in sales for the … It is also a form of increasing Brand Equity. Journal of Marketing, 72(2), 63-79. On the other hand, organisational culture is brought from the practical experiences from the organisation and learned from the organisational job. An organizational structure has a total quality approach where all areas of the organization are addressed; despite this totality approach, changes in business environments and industries have sometimes made companies to find their strategies ineffective and irresponsive of current business policies (Wheelen & Hunger, 1998). Nokia's history dates to 1865, when Finnish-Swede mining engineer Fredrik Idestam established a pulp mill near the town of Tampere, Finland (then in the Russian Empire).A second pulp mill was opened in 1868 near the neighboring town of Nokia, offering better hydropower resources. “Nokia-Connecting People”: this slogan is known all over the world. Meet our leadership team. Nokia’s organizational structure is horizontal and it allows for greater flexibility and speedy communication channels between different departments. Unlike other Nokias, when I connect this to my PC via USB cable the phone's directory structure does not appear. The case of Nokia is no different the company has successfully established itself as one of the most reliable and advanced manufacturer of mobile devices. The President and CEO’s rights and responsibilities include those allotted to the President under Finnish law. With the current success in the international markets, Nokia should be thinking of a brand extension approach: brand extension is a marketing tool used to market products using the strength of an existing brand. According to sources (Nokia, 2014) Nokia has been distributing dividends till the fiscal year 2011 NOK-US paid a high quality dividend, which represents a yield of 16.4% at the current price. Safety symbol. You are free to use it for research and reference purposes in order to write your own paper; however, you must. The impact of the crises were so great that profits before taxes almost decreased by 50% in 2008 from 2007 profits before taxes. 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