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Nokia: Communication Strategies

Introduction

When mobile communication equipment manufacturers were recording declining sales in the 2000s, Nokia was experiencing some unprecedented growth in its mobile handsets sales. According to a journal article written by Carral and Kajanto (2008), Nokia’s success was as a result of its understanding of the communication industry’s inflection points, something that enabled the company to develop strategies that ensured it continued recording increased sales even during times when the industry was experiencing hard times.

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According to Carral and Kajanto (2008) the success that Nokia enjoyed during the 2000-2003 period when other mobile phone makers were experiencing declined sales, was partly because the company had an open-management culture, where the managers listened and learned from different views. Notably, such views prompted Nokia to commission its own analysts to research on future industry trends. The information gathered by the analysts was used as a knowledge bank from which the company would identify likely dynamics that would shape future industry trends.

Regardless of the seemingly well laid out plan, the case study by Carral and Kajanto (2008) reveals some communication loopholes that existed in Nokia. The authors note that while forecasts made on industry dynamics and future inflection points enabled the company to take strategic actions that secured its success in the 2000s, communicating the need to adopt a new strategy was not an easy thing for the analysts.

Communication Problems & Objectives

Internal communication difficulties

When in 1998 analysts in Nokia predicted that a market slowdown was probable in three or four years, Carral and Kajanto (2008) note that the information generated controversy within the company because most people “were thinking only about how to grow faster” (p. 28). The year1998 was when the Nokia workforce was stretched due to an increased demand in production. Though it is not noted in the study, it is easy to hypothesize that maybe the forecast appeared like a strategy by the management to avoid hiring more people and hence overwork the existing staff members.

Perceptions by the workforce

As indirectly noted by Carral and Kajanto (2008), Nokia had great products, customer-oriented services, and a speedy response culture. The workforce perceived the combination of the three factors as what contributed to the company’s success. As noted by Carral and Kajanto (2008), telling the workforce to depart from what they perceived as a recipe for success, did not seem reasonable to them. This is well captured by the authors who state that “communicating a drastic message that contradicts the general operational mode is never simple” (p. 29).

Time taken to communicate the message

As is apparent in the case study, Nokia’s analysts’ main objective was to communicate the need to change the company’s operating model in order to better prepare the company for the slowdown that was imminent. Notably however, the communication cycle took an estimated 12 months. In the end however, the management was convinced that drastic actions were needed if the predicted slowdown would indeed become a reality.

Ranked issues

  • Communicating to the management- On predicting the future industry cycle, the analysts had to communicate the same to the company’s top management, who would in turn convince the workforce in Nokia to act on it.
  • Communicating the implementation strategy- The authors of the case study note that some challenges in implementing the strategy occurred.
  • Communicating the need to reorganize structure and processes- As noted in the case study, people working in Nokia felt “that they were being removed from familiar structure” (p. 29), while others become anxious as some operations were consolidate. Effective communication on why the reorganisation was being done would have made the transition much easier for the workers.

Potential solutions and analysis

  • Effective communication strategies by the analysts to the managers would have made it easier for them (managers) to understand the prediction, and hence make them better positioned to explain the urgency to adopt different strategies to the lower-rank employees.
  • Communicating the implementation strategies in detail to the management would also have made it easier for the managers to foresee and prepare for challenges that would come up during the implementation stage.
  • Using a two-way communication strategy between management and lower-ranked employees would have made it easier for employees to communicate any worries or concerns they had about the re-organisation.

Communication skills reflected in the Nokia case study

Written communication

Although not clearly articulated in the case study, it is rather clear that the easiest way that the analysts could have communicated their predictions is through written communication. This would allow the analyst to communicate detail reports of their analysis and predictions

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Oral communication

Again, for any gainful interaction to take place in organisations like Nokia, it is reasonable to expect that verbal communication took place between the analysts and the managers; and the managers and the lower-rank employees. This is an ideal communication skill where interaction between the communicator and the information recipient is desired.

Scenario-based communication

According to Carral and Kajanto (2008), a scenario based model was used to demonstrate to the management how the demand for mobile phones would look like in the future. This was used in order to foster a deeper understanding of the predictions made by the analysts.

Intra-communication

This form of communication skills is reflected by the authors’ indication that staff members felt anxious. Each Nokia staff member who felt anxious must have reflected on the situation and felt a sense of anxiety based on the same. The fact that they made conclusions about the probable results of the changes, indicate that the intercommunication between management and the lower-ranking workers was not well-organized enough to ward off their (lower-ranking workers’) worries.

Core values

These are the basic principles that a company sets its culture upon (Federico, 1994). According to Carral and Kajanto (2008), Nokia had an open-management system, was entrepreneurial, and was always customer focused.

Communication is Invention

This means that communication is a dynamic field that keeps evolving. While mobile phone usage was what every phone manufacturer had expected would drive growth in the industry, market analysts in Nokia realised that innovation was the only thing that would help them sustain or improve sales in a saturated market.

Leader’s job; “values compete and various roles are in tension”

This means that although leaders cannot satisfy everyone in an organisation, their main role is to ensure that the best is done for the company. In Nokia for instance, the management had to find a way of dealing with the unease that the proposed changes brought among workers.

Psychological and Physical barriers to communication

This refers to the emotional attitudes and material hindrances that may prevent effective communication from taking place. In Nokia, the perception that the cell-phone market was doing well and the assumption that the trend would continue in the future may have served as a psychological barrier. Job hierarchies demanding that information about changes be communicated to lower-ranking employees by the management may have acted as a physical barrier preventing analysts from communicating to the employees.

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Importance of feedback

This refers to the significant nature that reactions to an opinion or proposal plays in ensuring effective communication. In Nokia, the analysts could not have realised the difficult nature of convincing the management of a need to adopt a different strategy, if the management had not cast their doubts regarding the necessity of such a change.

Conclusion

Through effective communication, Nokia was able to introduce innovation in its mobile phone models that served the consumer market that was replacing its earlier handsets well. This in turn ensured that unlike its competitor, the mobile phone manufacturer did not suffer declined sale in the period lasting between 2000 and 2003. Observing the slow communication process in the company however, one gets the impression the company would have missed a chance to take advantage of the analysts’ forecast if a swift decision regarding adopting a different strategy would have been needed. As such, I recommend that Nokia should consider researching and adopting communication strategies that will benefit it both in circumstances demanding short term reaction, or long term considerations.

References

Carral, R. & Kajanto, M. (2008). Nokia: A case study in managing industry downturn. The Journal of Business Strategy 29(10), 25-33.

Frederico, R.F. (1994). What are your core communication values? Communication World. Web.

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