Nokia: Company Analysis, Organizational Design

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Over the course of its performance, Nokia has proven itself to be a reliable and innovative organization. Currently, Nokia is in a rather harsh environment, mostly due to the need to compete against highly proficient companies that have already established themselves and captured the target market. Therefore, the current organizational design that Nokia has been using to advance in the global economy has been chosen to ensure that the firm remains competitive (Lamberg et al., 2021). Consequently, the application of the organizational design structure, which provides maximum flexibility and opportunities for rapid adjustment, is fully justified, yet it needs to be updated in order to reflect the increasing diversity of the target market.

Governance Structure Internal and External Controls

To remain competitive, Nokia also needs to monitor the external environment closely while paying attention to the changes taking place within the organizational setting. For this purpose, the current governance structure of the company is geared toward managing core processes on a corporate level, while allowing local issues to be addressed by managers Lamberg et al., 2021 (Ruiz-Canela López, 2021). The specified approach rooted in the Laissez-Faire Leadership style invites multiple opportunities for encouraging innovation and unique solutions (Lamberg et al., 2021). As for the external controls, Nokia utilizes the Committee of Sponsoring Organizations (COSO) framework, which implies reporting based on monitoring, control activities, risk assessment, and objective setting (Ruiz-Canela López, 2021). Likewise, the Control Objectives for Information and Related Technology (COBIT) framework helps Nokia implement IT governance within its structure (Ruiz-Canela López, 2021). The described solutions help the company assess the target setting and make decisions based on specific circumstances.

Why it Might be a Problem for the Organization

However, even with its effective and elaborate framework, Nokia has been facing certain difficulties in navigating the global market. Specifically, the necessity to align the companys framework with the changes within the global market and the emergent needs of its diverse customers has recently appeared (Lamberg et al., 2021). In turn, the approach designed by Nokia, while allowing enough flexibility, did not suggest the active use of cross-cultural collaboration and the development of cultural competence in managers (Lamberg et al., 2021). As a result, integrating a framework that would help Nokia adjust to the changing market and the increasing diversity of its customers has appeared, defining the further updates to be made to Nokias governance structure, as well as its internal and external controls.

How the Problem Might Affect the Strategy of the Organization

The problem in question, namely, the lack of preparedness toward the drastic changes that the global market with its increasing diversity has entailed, is likely to affect Nokias business strategy significantly. Namely, Nokia will need to introduce cross-cultural learning and the development of cultural competence into its organizational framework, which will require more rigid control over the corporate structure and decision-making (Ruiz-Canela López, 2021). However, the specified issue implies creating a contradiction since the enhancement of control is incongruent with the companys current emphasis on flexibility and the laissez-faire approach to leadership (Ruiz-Canela López, 2021). Thus, Nokia is likely to encounter several major problems when adjusting its governance structure, as well as its external and internal analysis, toward the current market setting.

Conclusion

Though Nokias present approach toward building its corporate governance strategy is justified by the necessity to encompass the external and internal issues, the need to incorporate diverse solutions into the companys performance requires a shift to a more diverse and multifaceted approach. Therefore, the organization will need to deviate from the horizontal framework that it has been using in its governance structure so far and incorporate the elements of the vertical paradigm. Thus, premises for diversity will be created.

References

Lamberg, J. A., Lubinait, S., Ojala, J., & Tikkanen, H. (2021). The curse of agility: The Nokia Corporation and the loss of market dominance in mobile phones, 20032013. Business History, 63(4), 574-605.

Ruiz-Canela López, J. (2021). How can enterprise risk management help in evaluating the operational risks for a telecommunications company? Journal of Risk and Financial Management, 14(3), 139.

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