Organizational Design and Governance Strategies
The current dynamic business world has prompted the need for strategic changes to meet the market demands, especially in the telecommunication network devices. This essay describes the organizational design and the governance structure of the Nokia Corporation which has dominated the mobile communication industry for some years. The essay also elaborates on the challenge faced by this organization and its potential effects on the strategies of the company.
Organizational Design and the Governance Structure of Nokia Corporation
Nokia Corporation is organized in specific designs that enable its effective production and success in the market. These designs include four business groups which are Markets, Enterprise Solutions, Networks, and Phones (Hill & Jones, 2013). Such organizational design enables Nokia to ease its operations and increase its market share. The device or phone units manages and develops mobile devices’ assortment. The enterprise solutions department ensures a consistent development of solutions such that each mobile device contains modified and incorporated contents to meet the consumer needs (Bouwman et al., 2014). Considerably, this unit works in close propinquity with other departments to ensure that this objective is effectively achieved (Bouwman et al., 2014). The network department develops internet services which allow the Nokia phone users to experience efficient web interaction. In other words, the department designs specific features within the mobile devices that allow internet interaction.
Finally, the other organizational design of Nokia is the market unit. This ensures the promotion of sales, branding, and marketing activities are in line with market demand. Advertising various products and services are also done by this unit. The governance structure of Nokia is horizontal which allows for speed and flexible communication between various departments (Bouwman et al., 2014). The structure consists of a group executive board, Nokia-Siemens network, and markets. These corporate functions are positioned in a hierarchy with specific tasks and responsibilities which are carried out to maintain the company at its top-most market position. The group executive board manages the company’s operations whose chairman and members are elected by the board of directors (Bouwman et al., 2014). Further, Nokia-Siemens Network is tasked with providing fixed and wireless network service and infrastructure communications to enhance the customer experience. Such integration of governance allows the company to provide elegant services making it a leading corporation.
The Challenge Facing Nokia and Why It Is a Problem for the Organization
Despite its ‘lead’ position in the market for several years in its industry, Nokia is faced with a critical challenge that calls for strategic actions to maintain its competitive advantages. While the company uses sharp customer focus and cost leadership strategies, these have posed as channels for threats from the competitors who include Apple and Samsung companies (Lamberg et al., 2019). In the early 21st century, the company failed to realize the changing consumer needs which the competitors eyed as an opportunity to thrive. Nokia corporation management missed the cropping need for smartphone devices and hence lost the initiative.
However, as the company woke up following the evident competition, the initial phases of 5G for developing these products involved high costs of production which affected the pricing strategies of the final products. While the competitors made good timing and invested in the production of 5G, Nokia failed to foresee market changes which prompted the company to lose consumers to the competitors (Bouwman et al., 2014). This posed great losses which led it to announce a deteriorating market value in 2019. As a result, this challenge posed the need to change the strategies of the company to adjust to the competitive market.
Summarily, the success of an organization is based on how well its design and governance structure are managed. The paper has featured the strategic design and governance for Nokia Corporation. A big challenge facing the company is the high initial cost of 5G which the competitors have thrived to threaten Nokia Company.