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All organization, regardless of whether they are large or small, profit-seeking or not-for-profit, domestic or multinational, use some combination of human, financial, physical and information resources which generally obtained from the organization’s environment to achieve their goals. Al though “organization” is being defined relatively simple but the concept of “Management” is a bit more exclusive.
Management is a set of activities that include planning and decision making, organizing, leading and controlling directed at an organizations resources with the aim of achieving organizational goals in and efficient and effective manner. Now, let us have a closure view on an international well-known organization-Nokia Corporation on highlighting the basic purpose of management including ensuring the organization’s goals are achieved in an efficient and effective manner and perform the following tasks:- A. ) PEST Framework.
B. ) Departmentalized by geographic location. C. ) Social Responsibility. 2. 0NOKIA CORPORATION 2. 1Company Background The roots of Nokia go back to the year 1865 with the establishment of a forestry industry enterprise in South-Western Finland by mining engineer Fredrick Idestam. While in the year 1898, witnessed the foundation of Finnish Rubber Works Ltd, and in 1912, Finnish Cable Works began operations. Gradually, the ownership of this two companies and Nokia began to shift into hands of just a few owners.
Finally, these three companies were merged to form Nokia Corporation in 1967. Nokia is a world leader in mobile telecommunications driving the growth and sustainability of the broader mobility industry, which connects people to each other and the information that matters to them with easy-to-use and innovative products like mobile phones, devices and solutions for games, imaging, businesses and media. Nokia comprises 3 business groups: Mobile Phones, Multimedia and Enterprise Solution.
Mobile Phones connect people by providing expanding data capabilities and mobile voice across a wide range of mobile devices; Multimedia gives people the ability to access, experience, create and share the multimedia in in form of advanced mobile technology standards; Enterprise Solutions offers institutions and business a broad range of products and solutions such as underlying security infrastructure, software and services. The business groups are supported by various horizontal entities.
For example, corporate functions support Nokia’s business with company-wide Strategy and Services and Technology Platforms deliver leading technologies and platforms. Customer and Market Operations also play a supportive role fro sales and marketing, manufacturing and logistics, and sourcing and procurement for mobile devices. While, Brand and Design, Development Support, research and Venturing, Business Infrastructure are responsible to drive and manage specific Nokia assets. 3. 0PEST FRAMEWORK PEST framework is a analysis that strategy consultant use to scan the external macro-environment in operations.
PEST framework acquiring four factors which are political,/legal, economic, social and technological . 3. 1Political/Legal Environment Political/legal factor has a huge influence upon the regulation of businesses and the spending power of consumers and other businesses. Political factor involves political stability, trade regulations and tariffs, legal framework for contract enforcement mandatory employee benefits, anti-trust laws, industrial safety regulations, intellectual property protection and others.
Nokia is a registered trademark of Nokia Corporation. Nokia’s product names are either trademarks or registered trademarks of Nokia. Any other product and company names mentioned herein may be trademarks or trade names of their respective owners. Anyone who access to Nokia’s website should not be construed as granting, by implication, estoppel or otherwise, any license or right to use any marks appearing on the site without the prior written consent of Nokia or the third party owner thereof.
Due to committing to protect users or consumers privacy through the website, Nokia does not engage in the practice of selling or trading personal data for any other companies for promotional purposes. Nokia has endeavored to take some relevant measures as security to prevent unauthorized access to and improper use of personal data submitted to Nokia via web. For example, an industry standard security measure, “Secure Sockets Layer” (SSL) to protect the confidentiality and security of online transactions, as well as reasonably safe from 3rd party interception. As example, Nokia Sues Chinese Companies For IP Violations-June 29, 2006.
Nokia has initiated a civil litigation in Beijing against Shenzen Telsda Mobile Communication Industry Developing Company and Song Xun Da Zhong Ke Electronic Company for manufacturing and selling mobile phones that copy the proprietary and legally protected industrial designs of the Nokia 7260 mobile phone model. In its complaints, Nokia requests the Court to order the defendants to cease manufacturing and selling the mobile phones that copy the protected designs and pay monetary damages and costs that usual remedies requested and granted these types of cases.
Nokia took this action as part of continuous efforts to protect its brand value and proprietary designs against infringers. Nokia vigorously protects its intellectual property and ready to take action when its rights are violated. the lawsuit is now being handled by the Beijing No. 2 Intermediate People’s Court which accepted the case filing of Nokia on June 12, 2006. 3. 2Economic Environment Table 1: Nokia Mobile Device Vol. By Geographical Area
Economic factor is where the environment involves in inflation rate, interest rate, government intervention in the free market, efficiency of financial market, economic growth rate business cycle stage and more. Based on Table 1 shown, we can see that Nokia’s preliminary market’s share for the second quarter 2007 was 38%, compared with 34% in the second quarter 2006 and 36% in the first quarter 2007. Nokia’s year on year market share increase was driven primarily by strong gains in Europe, Middle East & Africa, Asia-Pacific and Latin America.
Nokia’s market share in China was at approximately the same level year on year. Nokia had strong sequential market share gains in Europe, Middle East & Africa, China, and Asia-Pacific and to a lesser degree in Latin America. Nokia’s market share was down both year on year and sequentially in North America. It was believes that the global market share in the second quarter 2007 was positively impacted by an enhanced overall product portfolio, supported by Nokia’s strengths of its world class logistics and brand.
Other than that, the clearing of certain competitors’ excess device inventory in the market that was carried over from the first quarter 2007. Nokia’s average selling price in the second quarter 2007 was EUR 90, down from EUR 102 in the second quarter 2006 and up from EUR 89 in the first quarter 2007. The lower year on year of Average Selling Price (ASP) in the second quarter 2007 was primarily the result of a significantly higher proportion of entry level device sales, where the industry growth especially in the emerging markets has been strong.
Sequentially, second quarter 2007 ASPs were positively impacted by a higher percentage of higher end device sales, which more than offset continued robust sales from the entry-level segment. 3. 3Social Environment The social and culture influences on businesses vary from country to country. It is important that factors like entrepreneur spirit, leisure interest, education, demographics, culture and attitude are considered. Nokia’s mobile technologies open up amazing new opportunities in teaching and learning. It offers learning opportunities unrestricted by location and time. It enables people to learn anywhere, whenever they choose.
When mobile phones are perceived as multimedia computers rather than just communication devices, new perceptive open up for the design and development and how they could be used in formal and informal learning. For example, Road-Forum and audio-based application enables mobile phone users to share news and technical hints within each other. These acts will improve the relationship between each other for better life style. Nokia, the leader in Mobile Age Technology, help to ensure the better product design, production and recycling processes that to reduce the environmental impact of everything the company does.
There are three cornerstones to approach to environmental (natural resources) protection such as life-cycle thinking, sustainability and eco-efficiency. In Asia Pacific, emerging recycling is the demands to get more fractions for recycling, pollution, health, safety issues and cost efficiency, which all factors that required electronic equipment producers to think about new ways to make their product more recyclable. First, the battery is removed manually, then the device is shredded and ferrous metal, aluminium and plastics are separated.
The metals are recycled; the plastics are used mainly as a source of energy. Printed wiring boards are handled in metallurgical process. The method goes for all electronic products and is cost effective, but the material recovery is limited. Rough dismantling before shredding could increase the mount of cleaner fractions for recycling. Nokia Research Centre, together with student group from Helsinki University of Technology, the Finnish School of Watchmaking and the University of Art and Design Helsinki have developed a process for heat disassembly of portable devices.
It is to disassemble a mobile phone by a heat-activated mechanism without any contact. 3. 4Technological Environment Nowadays, technology is vital for competitive advantage and a major driver of globalization. This is due to factors of involving impact on cost structure, recent technological developments, impact on product’s offering and rate of technological diffusion. Since Nokia’s inception in June 2002, the Open Mobile Alliance has rapidly expanded from around 180 companies to more than 300 companies, representing leading mobile operators, device and network suppliers, IT companies and content providers.
Nokia has also assigned an agreement with China Mobile Communications Corporation (CMCC) to supply GPRS Core Network infrastructure for four provincial networks. Beijing Nokia HangXing Telecommunication Systems Co. Ltd, one of Nokia Joint Ventures in China is responsible for all implementation and the whole systems is targeted to be operational in year 2002. Nokia and Nera, both leading suppliers of wireless transmission equipment, have taken a step in closer technology co-operation by signing an agreement under which, Nera will license Nokia’s plesiochronous digital hierarchy (PDH) radio transmission technology.
The agreement will enhance Nera’s existing offering by adding new products based on Nokia’s proven PDH radio technology. It provides by means of leading wireless transmission technology. Now, drawing on strengths in PDH radio technology, Nokia’s product portfolio together with CompactLink for the US market, will ensure for further improve the best possible choice of products. 3. 5Summary In this PEST framework, we can see that Nokia is very strong in political/legal environment or factor.
As an example, Nokia developed a standard security measure, “The Sockets Layer” (“SSL”) to protect their customer from 3rd party interception. Economic environment is quite weak due to strong competitors. However, the last two environment, social environment and technological environment are strong as their performance, attitude, intelligence and hard work to the public. 4. 0DEPARTMENTALIZED BY GEOGRAPHIC LOCATION Departmentalization is the process in which an organization is structurally divided by combining jobs in departments according to some shared basis.
There were 4 bases in departmentalization: Functional Departmentalization, Product Departmentalization, Consumer Departmentalization and Geographic Departmentalization. Functional departmentalization is the grouping of activities by functions performed. It reflects the nature of the business and obtaining efficiencies from consolidating similar specialties and people with common skills, knowledge and orientations together in common units such as human resources, accounting, logistics and engineering. Product departmentalization is the tasks group according to a specific product or service.
It assembles all functions needed to market a product are placed under one executive such as men’s clothing, women’s clothing, accessories and home appliances. Besides that, consumer departmentalization is defined as a basis of a common set of needs or problems of specific customers. For example, the sales activities in an office supply firm can be break down into three departments that serve wholesale, retail and government accounts. Lastly, geographic departmentalization is the group of activities on the basis of territory or geography.
For instance, Merck, a major pharmaceutical company, has its domestic sales departmentalized by Midwest, Southwest, Northeast and Northwest. We can see that Nokia is more emphasize in geographic departmentalization due to its multiple businesses in related areas operating within a larger organizational framework in Europe, Asia-Pacific, China, Middle East & Africa, Latin America and North America as shown in Figure 1. Figure 1: Nokia’s Organization Geographic Area Process In this geographic departmentalization, Nokia is able to do research and give responsive to different markets’ demand in different areas.
For example, more low price mobile phone can be developed for low income customers in Asia-Pacific or China while developed luxury mobile phone for higher income customers in great developing country like Europe due to differences inflation and currency in these countries. In this kind of departmentalization, Nokia is able to be more effective and efficient in serving the needs of unique geographic markets. As example, by organizing competitive campaign or research with global and local partners may develop and motivate an unique and excellent ideas due to different view, different situation in different areas.
The Village Phone program is a good example of one such research. However, there are some weaknesses in this departmentalization in which duplication of resources. Most of managers who do the same job but in different areas may feel isolated from other organizational areas because their expertise was limited at their current area only where they are unable to think out of the box. For example, marketing a new mobile phone in Europe may have different requirement than the marketing at same product in Asia-Pacific. Besides that, it is difficult to coordinate across departments.
This can be refer where a region manager heads each department and each department operates with reasonable autonomy but confusion occurs when each department have to coordinate their own activities as well in the same time. 4. 1Summary As Nokia is geographic departmentalization, it is able to response to different demand in different market. It have some opportunities like experience more, explore more, generate more in which a good motivation and space to expand with the globalization businesses. It has also weakness in certain area like duplication of resource and difficulty in coordination across departments. 5. 0SOCIAL RESPONSIBILITY
Specifically, social responsibility is the set of obligations that an organization has to protect and enhance the society in which is function. An organization may exercise social responsibility toward their stakeholders, natural environment and general welfare. Some organizations realize their responsibilities in these three areas but some have no realization at all. Nokia had took a proactive approach when acknowledge various areas of environmental impact. The environmental activities are a part of business strategy, ensuring competitiveness, cost effectiveness, customer satisfaction, demand-supply market alignment and more.
Nokia has strongly emphasized their responsibilities when Simon Beresford-Wylie, EVP & GM, Network, Nokia Corporation notes that they continue offer a comprehensive service to customers for take back and recycling of obsolete electronic and electrical equipment to support environmentally sustainable product end-of-life practices. Besides that, Nokia also had commitment for environmental improvement in environmental policy. All Nokia employees are radiates in which environmental specialist and business management teams are responsible to join for implementing the policy.
We able to acknowledge how Nokia ensure the implementation of environment activities are consistent with the environment policy and strategy across Nokia as follows:- Basic PrinciplesWays To Put In Action 1. A solid product life cycle-based environmental performance. 2. An active, open and ethically sound approach to environmental protection. 3. Sustainable development in accordance with the ICC Business Charter. 1. Environmental policy becomes part of the general management policy. 2. Line organizations plan and implement the action progress with environmental specialist and best technologies. . Action programs based on understandable pf environmental impacts of a product life cycle. 4. Continuous efforts and follow-up on results to minimize the impact. Nokia Substance List (NSL), as the heart of substance management of Nokia which identifies substances that has banned, restricted or targeted for reduction, with aim to phase out their use in its products. Nokia also works with its suppliers to help eliminate restricted or monitored substances from its total product line and investigate alternative solutions.
Nokia had approached to take back and recycling by offering easy access of point’s collection to encourage the return of obsolete mobile devices and accessories. Nokia also create the initial design phase to ensure the possibility of extracting valuable materials for recycling in a safe and efficient manner to optimize the recyclables of mobile devices and accessories. Nokia had developed an idea that selling equipment via network with recycling possibilities in commercial contracts and offered this service since 1999.
Environmental Management Systems (EMS) at Nokia production sites exception of Chennai and India, Nokia working towards ISO 14001, compliance in 2007 by implemented internally verification the systems at all its main office and R & D facilities for controlling and improving their own environmental performance, which focused on energy consumption, water consumption, air emissions, ozone-depleting substances (ODS), waste management and packaging as follows:- Energy Consumption-Several energy-saving campaigns were held in different regions in Nokia offices. -Create energy metering systems which ensure targeted levels continuously. Reduce energy consumption by 3-5% yearly in office, research and development facilities. Water consumption-mainly used fro sanitary and catering purposes. -only small volumes used in production processes. Air emissions-emissions of Volatile Organic Compounds (VOC) arise from use of solutions in soldering process have been reduced. ODS-Not used in products or production. -Reported that ODS contained in cooling system facilities. Waste management-Aim to reduce all waste fractions to a lowest percentage. -83% of solid waste is reused; materials recycle or used a source of energy. Packaging-Reduce packaging volume cause of recyclable materials.
Nokia support the regulatory offered by International Commission on Non-Ionizing Radiation Protection (ICNIRP) that based on stringent reviews of science relating to radio wave emissions. By working towards globally harmonized regulatory standards, reviewed and accepted by the World’s expert scientific community, Nokia sought to aid the regulatory process in Russia, India, Latin America and other countries. Nokia also supporting World Health Organizations (WHO) for risk assessment subject relating to Interphone studies across the radio frequency spectrum which considers variety of exposure scenarios.
As a market leader with global operations, Nokia accept the responsibility to their positions and committed to various communities by donate, partnership and sponsor programs. Most of the programs targeted on young people in which will also bring direct benefits to parents, teachers and other members in this community. Nokia intend to create educational content that can be delivered via a range of technological solutions to students in the world to respect their individual needs.
By working with global and local partners, Nokia will able to bring new opportunities to people by develop technology that help bridge communication gaps between various communities around the world. 5. 1Summary Nokia’s participates in NSL, EMS and WHO strongly tell us that Nokia has a great responsibility toward their stakeholders especially in natural environment and general welfare. Such attitude was a great example to be impose to all organization nation widely to protect our environment. 6. 0CONCLUSIONS As from this assignment, we know that Nokia Corporation is a world leader in mobile telecommunication.
It has a very strong PEST framework and due to this, it is able to have a volume of consumers and wins a lot of competitive nowadays. Besides, Nokia is more emphasize in geographic departmentalization. It is also able to give responsive to different markets’ demand in different areas. Nokia also play an important role in company’s social responsibilities especially when launched their R & D facilities for controlling and improving their own environment performance. 7. 0References 1. Chapman, A. (1995-2006). Pest Market Analysis Tool. Retrieved September 29, 2007 from http://www. businessballs. om/ pestanalysisfreetemplate. htm 2. About Nokia. Retrieved September 29, 2007 from http://www. nokia. com/aboutnokia 3. Broker Seminar Presentations. Retrieved September 29, 2007 from http://phx. corporate-ir. net/phoenix. zhtml? c=107224&p=irol-broker 4. Press. Retrieved September 29, 2007 from http://www. nokia. com/press 5. Segan, S. (2005, February). 3GSM: Nokia, Sony Ericsson Prepare Competitors to iPhone. Retrieved September 29, 2007 from http://findarticles. com/p/articles/ mi_zdpcm/is_200502/ai_n9522154 6. Haskin, D. (2001, November 13). Nokia, Competitors Vow Interoperability. Retrieved from http://www. nstantmessagingplanet. com/enterprise/article. php/922641 7. Nokia Doubles Up Competitors. Retrieved September 30, 2007 from http://press. nokia. com/PR/200602/1034840_5. html 8. Human Technology At Heart Of Nokia’s Vision Of Mobility. Retrieved September 30, 2007 from http://findarticles. com/p/articles/mi_zd4233/ is_200506/ai_n14682222 9. Apocalypso. ( 2007, July 04). Nokia: Hacking Possible But Takes Time. Retrieved September 29, 2007 from http://www. symbian-freak. com/news/007/07/ symbian_s60_phones_hacking. htm 10. Nokia And Matsushita Agree On Defective Battery Costs. Retrieved September 29, 2007 from ttp://www. engadget. com/2007/08/24/nokia-and-matsushita-agree-on-defective-battery-costs/ 11. Iphone Vs Nokia N95. Retrieved September 29, 2007. from http://www. lucafiligheddu . com/ 2007/06/iphone-vs-nokia-n95. html 12. Major Wireless Manufacturers Unite To Advance Development Of Global Location-Based Services And Applications. Retrieved September 29, 2007 from http://press. nokia. com/PR/200009/791335_5. html 13. Towns, S. (2007, August 24). Nokia Grabs More Market Share From Motorola. Retrieved September 30, 2007 from http://seekingalpha. com/article/45553-nokia-grabs-more-market-share-from-motorola 14.
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