Management strategy and practice of the nokia corporation ltd
Nokia Corporation Ltd is one of the topmost mobile phone manufacturing companies. It manufactures a wide range of mobile phone handsets that befit and satisfy consumer demand. It is based in the South West part of Finland.
With its headquarters based in Singapore, Nokia Corporation operates in various geographical locations. The enterprise is further categorized into different business segments with each specializing in specific operations: Nokia Treasury Asia: – This is based in the headquarters and serves the corporation’s subsidiaries of the Pacific (Asian). This region serves as the banking unit by providing a wide range of financial services.
Japan/ China region: – These regions specialize in Research and Development. It is the ‘epicenter’ of new innovations/technology and new brand implementation. Within the America’s region, Nokia Corporation has assembly, IT solutions and program design business units.
In general, the company has a flat organizational structure. This is because of few levels of management (about six). The chairman, who doubles as the President is deputized by the vice Chairman (Vice President). This Manager has only four executives below him. This structure is a form of strategy for the corporation as it reduces bureaucracy and enhances both the flow of information and the decision-making process.
NOKIA’S INCOME STATEMENTS
The most recent quarte’s Revenue is € 9,856 million
The net income figure during the same period was € 979 million.
The company’s current stock price as at 11.03 AM, 07/19/07 is $ 29.81.The previous price was $29.73. I expect the stock price to grow in the next quarter. This is due to the high demand of the company’s stocks due to its high profitability and performance in the Stock Market.
The Corporation operates in patents and rights. These include the GSM/WCDMA and CDMA2000. These have led to advantages like reduction of production and operating costs. The management of the company uses internal growth/financing that is expensive in terms of interest charges. Because of this, it issues ordinary shares when finances have to be raised. It also uses its retained earnings which are sufficient owing to its optimal dividend policy.
In order to increase its profitability and market share, Nokia Corporation has entered into a joint venture with other telecommunication companies like Sanyo. And in order to attract a competitive advantage over other companies in the industry, Nokia Corporation has embarked on acquisitions. An example is Intellisync plc in February 2006.
Another of the firm’s strategy is that of mergers with other telecommunication companies. This has seen the company merging with Siemens AG in June 2006. This according to the management will give the company enviable synergistic advantages such as reduction of operating expenses. It would also enable the company tap more expertise as well as bar new entrants from joining the industry.
The investment division carries out financial plans and analysis before undertaking any financial ventures. This is geared towards risk reduction and investments on projects that can only yield positive net benefits in present value terms.
Through the Finance Department, the company also carries out sensitivity analysis to determine the effect of changing certain financial parameters on the outcomes. These include the discounting rates, economic life of projects,e.t.c.
In order to reduce its financial risk Nokia corporation diversifies its investments by investing in a portfolio form. These range from treasury bills, to mutual funds and other long-term projects.
One of Nokia Corporation’s management strategies is brand/design. The Corporation is the leading in in product modification, producing a wide range of Nokia handsets. It is through this that a company can gain the loyalty and confidence of the customers. The phones also have very fascinating ring tones, games and even internet solutions. They have designed them in a way that they are user friendly.
The human resource department of the company comprises of experienced and highly skilled and motivated staff. The firm employs better recruitment and selection methods in fulfilling the staffing function.
The management of Nokia carries out frequent environmental surveys to determine what they can be able to explore from the environment( opportunities) and what dangers the same environment poses on it (threats). This analysis is important because through it, Nokia corporation identifies the strengths at its disposal that can enable them make use of the opportunities. They also determine their weaknesses and how these are likely to hinder their success.
In order to avoid high labor turnover especially skilled and expertise, the company adopts betters and attractive wage packages for its employees and other perquisites. They are also actively involved in core decision making processes thus making them feel part and parcel of the organization. When it comes to conflict resolution, the management uses the collaborative style to resolve organizational conflicts. These tend to give both parties in conflict a win-win situation by giving every party equal satisfaction.
Another Nokia’s management strategy is time management. In the Nokia working environment, time is the most essential asset. This resource is highly valued as idle capacity is costly to the organization. The management, in a chart form has laid down ways in which staff and all other employees can be able to properly manage time. Every employee is required to set his/ her objectives which he/she wants to accomplish. The goals have to be prioritized with each employee having his own individual working schedules.