Page 218 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes
Devices: It deals with all the hardware and software requirements for the development of
a new mobile phone. Research and Development, product development and software
variants that were earlier separated in three divisions have now been put together under
a single umbrella division. The R&D division was further broken down into functional
entities as per the requirements.
Software & Services: It was created in the restructuring exercise with an eye on the future
of the industry. It reflects the path that Nokia wants to take in the coming years and is in
sync with its vision of bringing the best of Internet to phones and offering Consumer
Internet Services.
Nokia-Siemens Network: Nokia established networks division in collaboration with
Siemens as a separate entity to grow fixed and mobile network infrastructure and services.
This helped Nokia to expand its scale of operations and strengthen its market position.

Exhibit 2

Nokia focused on four main aspects in its restructuring process:
1. Product focus: Nokia was manufacturing 70 models world wide
2. Functionality focus: Technical and functional expertise was important for cutting
edge technology
3. Geographic focus: Expanding global footprint
4. Focus on Internet services: Exploring future possibilities
While the clear effects of the second wave of restructuring are yet to be seen, the new
structure is expected to offer the following advantages to Nokia-
1. Consolidated R&D department with functional expertise that eliminates repetition
of work
2. Flexibility and adaptability in sharing human resources across programmes
How does Nokia do it?
Organisations of the size of Nokia tend to stick to the same structure for long periods of
time for the simple reason that it is an enormously difficult task to restructure. Large
organisations that undergo restructuring face a lot of discontent from employees who
have gotten used to a specific style of functioning (organisational inertia). How then is
Nokia, a giant, able to restructure so often without batting an eyelid? A large part of this
answer stems from its organisational culture and values.
Contd...

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