Strategic Implementation Framework Within The Nokia Corporation Report
Executive Summary
The report is primarily written to discuss the strategic implementation framework within the Nokia Corporation. The organization lost it’s market dominance in the smart phone industry due to an ineffective management framework which was led by rigid corporate leadership and evolved around a faulty organizational culture. The company also operated on an agile managerial philosophy which derailed the organizational structure and led to ineffective utilization of the dynamic capabilities, thereby enabling the company to lose it’s international competitiveness.
The process of effective strategic implementation had enhanced many organizational aspects of the Nokia Corporation. It strengthened the operational and managerial systems of the business and had enabled the company to strengthen it’s corporate culture in the initial years, which had enabled the company to attain the market leadership before 2000s. However, poor strategic formulation had also impacted the implementation process and led to devastating outcomes for the firm.
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The significance of the strategic implementation in the Nokia Corporation can be emphasized by the fact that the company started losing it’s share when it’s implementation was derailed due to poor strategic leadership, increased bureaucracy and incompatible strategic management structure. Hence, in order to enhance the implementation framework, the government should align all the organizational systems and structures and develop a balanced strategic management system that facilitates all the stakeholders of the company.
Introduction
In today’s competitive corporate scenario, effective strategic management is essential for organizations to achieve sustainable competitive advantage and long-term business growth and prosperity. Strategic management is an integral procedure that enables organizations to effectively formulate, implement and evaluate the cross-functional processes and decisions that are integral in achieving the goals and objectives of the company. Strategic implementation is the core aspect of strategic management since this procedure determines the effectiveness of the organizational strategy in achieving the business vision (Kabeyi, 2019). This managerial procedure requires the employees and the managers to take a series of complex decisions that can enable the organization to effectively implement it’s strategic plans.
However, many organizations fail to undergo this process efficiently due to lack of focus on fluctuating macro and micro-environmental conditions leading to poor strategic fit, political interferences and constrained resources and capabilities. Furthermore, inadequate corporate leadership, faulty organizational culture and rigid strategic competitiveness within the organization may also trigger an ineffective implementation of the strategic plan. This predicament may lead to devastating consequences for the organization since this would lead to reduced employee morale and job satisfaction, increased employee cynicism, reduced work productivity and lower profitability. Hence, it is integral to efficiently implement the strategic plan in order to achieve the long-term goals and objectives of the organization (Stanley & Muriuki, 2015).
This report essentially discusses the significance of strategic implementation in Nokia Corporation. The text also highlights the limitations and benefits of implementing the managerial strategy and offers recommendations to enhance the organization’s strategic implementation framework
Strategic Implementation – Nokia Corporation
Strategic implementation is a core element of strategic management which enables the company to achieve competitiveness and prosperity in the long-run. In order to effectively implement the strategic plan, the organization should regulate it’s planning and communication frameworks in accordance with the industry and business environment, thereby making the plan strategically fit to the organization’s goals and objectives. Furthermore, the company should also determine and focus on it’s critical success factors in order to effectively implement it’s strategic plan. Those organizations who fail to follow these procedures tend to face multiple hurdles which would mitigate the productivity and the profitability of the company (Mišanková & Kočišová, 2014). Nokia Corporation is an example of an organization that faced potential strategic implementation issues in the past few years, which led to the company losing profitability and potential market share.
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Issues in strategic Implementation
Nokia Corporation, a successful Finnish Multinational Company lost it’s international competitiveness and dominant market share in the smart phone industry due to the poor strategic management framework of the organization. The company failed to formulate and implement a strategic plan that could secure the company from strong competitors like Apple and Google. On the other hand, Nokia’s competitors entered the market with a dynamic and sustainable competitive strategy which supported innovation and differentiation, which thereby enabled them to dominate the corporate landscape and cover majority of Nokia’s smartphone share. The organization’s poor performance can be attributed to it’s failure to align it’s organizational strategy with the external business environment, thereby leading to the formulation and implementation of an unsustainable competitive strategy. This step devastated the company’s fate and enabled the organization to bear enormous losses (Lamberg, Lubinaitė, Ojala & Tikkanen, 2019).
The strategic implementation of Nokia’s decisions was majorly jeopardized due to the company’s incongruent organizational design and structure. The company’s agile managerial philosophy materialized the structural changes within the organization and allowed incompatible development projects and technological spaces to compete for resources (Lamberg, Lubinaitė, Ojala & Tikkanen, 2019). The organization had to meet rapidly growing demands of product development programs without technical software architecture and project managerial skills. This lead to constrained resources and capabilities within the organization and deprived the company of the market leadership. This also dented employee morale, thereby increasing employee turnover and toughening the strategic implementation procedure. Moreover, the Nokia Corporation adapted a low-cost strategy which deteriorated the firm’s differentiation efforts, thereby lowering sales and reducing the organization’s profitability. The company failed to formulate a successful corporate strategy due to the inadequate managerial systems and structure.
Furthermore, the strategic implementation was also disrupted due to the poor corporate leadership that governed the managerial framework of the organization. The leadership hierarchy was reorganized in 2004, which led to the departure of many strategic executives. The new top management of the organization resorted to sluggish decision-making in the process of fighting the new competitors in the market, thereby leading the organization to suffer from devastating losses (Vuori & Huy, 2015). The new leadership hierarchy also failed to be tech-savvy which further arose conflicts within the internal managerial dynamics. Nokia’s leadership also took the unreasonable decision of relying on Symbian, the incompatible operating system. The application had multiple limitations and thereby had a counter-effect of further driving down the company’s sales (Doz, 2017). Furthermore, The CEO of the company, Jorma Olila had an aggressive temper and a blunt managerial style which led to internal dysfunction within the management structure of the Nokia Corporation (Vuori & Huy, 2015).
Nokia Corporation faced multiple challenges in effectively implementing it’s strategy and this led the company to face enormous losses. The organization failed due to poor strategic leadership, dysfunctional organizational and managerial dynamics and poor resource allocation, thereby leading the organization to lose it’s market leadership in the smart phone industry.
Benefits and Limitations of Strategic Implementation
Strategy formulation and implementation is a core managerial philosophy that underlies the operational framework of Nokia Corporations. Effective implementation of the strategic plans would enable the organization to enhance it’s managerial and operational systems, strengthen it’s organizational culture and enhance the profit-generating ability of the firm. Furthermore, effective implementation would also elevate the process of value-creation at all levels of the organization, thereby strengthening the structural framework of the company and leading the organization towards sustainable growth. Nokia Corporation had a strong strategic implementation system which relied on it’s managerial and corporate culture (Mišanková & Kočišová, 2014).
Nokia Corporation adheres to a distinctive managerial approach that enhances the strategy implementation within the organizational structure. The company has a strong corporate culture that follows the ‘Nokia Way’ phenomena and holds operational efficiency and organizational competencies as integral elements in enhancing the firm’s performance and productivity. This phenomenon also encourages flexible decision-making, which enables the company employers to consider market foresights while taking important decisions. This strengthens the organization’s managerial, decision-making and operational systems, which thereby supports the implementation of the company’s strategy (Doz & Wilson, 2017).
The company aims to provide value to it’s customers via efficient provision of products and services and hence, this customer-centric culture further enhances the implementation of the organization’s strategy. Furthermore, the company’s managers and their leadership capabilities are also critical success factors which impacts the implementation of strategies within the firm’s structure.(Masalin, 2017). Hence, when Nokia Corporation is able to implement it’s strategy effectively, it is able to strengthen it’s corporate culture, it’s administrative support systems, the organizational structure and the operational dynamics of the firm, thereby enabling it to sustain it’s competitive advantage (Mišanková & Kočišová, 2014).
Strategy implementation is an essential process; however it cannot be executed without efficient planning and strategy formulation. Strategic planning also coordinates the process of the plan development at low levels in the employee hierarchy in the organization. Hence, Nokia is dependent on the process of strategic planning to achieve effective implementation. For instance, Nokia failed because the organization did not formulate an innovative and a customer-centric corporate strategy that would prove to be competitive in the tech-savvy smartphone market. Hence, efforts at implementing the strategy were wastage of time and resources (Alibage & Weber, 2018).
Furthermore, the structure of the strategic management system also impacts the results of the implementation. Nokia’s strategic management framework was affected by excessive organizational complexity and bureaucracy, which affected the decision-making processes regarding the product development. Hence, it can be asserted that strategic implementation has it’s limitations within the organization due to it’s dependency on strategy formulation and planning and due to the incompatible strategic management structure that deems the effectiveness of the implementation process(Rajasekar, 2014).
Implementation as the most significant process in Strategic Management
Successful strategic implementation is an integral element of strategy management since it determines the long-term prosperity and profitability of the organization. The implementation process in strategy management connects the strategy formulation and control, thereby acting as the most significant driver in effective strategy management. Research shows that 80 % of the firms are able to develop effective organizational strategies, however only 14 % are able to implement them effectively. The process of implementation requires managerial and administrative capabilities to analyze potential market threats and opportunities and examine the external and internal business environment. This analysis would enable the firm to develop a viable plan that is strategically aligned to the goals and objectives of the organization. Hence, external and internal factors like corporate culture, resource availability, leadership style and organizational structure impact the strategic implementation process of the organization (Rajasekar, 2014).
Nokia Corporation had a powerful positioning in the Smartphone industry and was also known for it’s effective strategic formulation and control. However, in the recent years, the company is unable to strategically manage the organization due to the poor implementation tactics that acted as a barrier in the company’s progress and thereby damaged the organization’s profitability and good will. The organization’s disruption began with it’s reduced focus on the external competitive landscape of the Smartphone industry. In June 2007, Apple launched iPhone 3G which outperformed in the market due to it’s differentiated and innovative specifications compared with Nokia N95, which was recently released by the organization and had it’s old OS, Symbian. For many years, the company had maintained an effective strategic control by releasing smart phones with upgraded operating systems, however it’s implementation phase was deteriorated when the company failed to analyze the recent consumer demands and also neglected the powerful competitors in the market (Alibage & Weber, 2018).
The company’s corporate leadership endeavored to respond to this disruption by releasing the Nokia 5800 Xpress music series with the Symbian OS and a touch-screen appearance. However, the company’s strategic response failed to work since the phone was not comparable to the IOS series, which was technologically upgraded and matched the customer’s ideal phone expectations (Alibage & Weber, 2018). The implementation of the company’s strategy was hampered due to incorrect strategic objectives that were derailed due to insufficient competitive analysis executed by the company management. This led the company to wrongly allocate its resources, thereby escorting the organization towards a major fiasco (Doz & Wilson, 2017).
Furthermore, the process of implementation within the company was further impaired by a development of a growth paradox that elevated the complexity and bureaucracy within the strategic management structure of the company and prevented the corporate leadership from taking rational decisions. This paradox led to an increase in internal conflicts and mitigated the speed, self-awareness and decision-making flexibility, thereby leading to a loss of internal metabolism. This predicament misguided the implementation process of the company’s strategy and enabled the company to lose their business prosperity (Bouwman, Carlsson, Carlsson, & Nikou, 2014). Hence, it can be asserted that the implementation process plays an inevitable role in ensuring the organization’s growth and long-term prosperity.
Recommendations to enhance Strategic Implementation process
Nokia Corporation had ineffectively led the strategic implementation process which enabled the organization to lose it’s market dominance in the smart phone industry. In order to revamp it’s strategic management framework, the company should take certain measures to enhance it’s implementation process. The company should focus on enhancing the organizational structure, the company culture and the leadership framework in order to ease the implementation process. Furthermore, the Nokia Corporation should also mold it’s implementation process in line with the industrial and the competitive landscape. These objectives can be achieved when the company successfully develops a strategic map that connects the strategy with the structure, system, staff, skills and shared values within the organization, thereby enabling an effective execution of planned strategies. Hence, the adherence to McKinsey’s 7S model enables the organization to enhance it’s strategic management framework (Baroto, Arvand & Ahmad, 2014).
Moreover, the company can also enhance it’s implementation process by adapting the balanced score card approach of strategy implementation. This process aims to maximize value-creation by implementing the management strategies at all levels at the organization. This would empower all the employees and engage them in the implementation process, thereby enhancing its efficiency. Furthermore, this process would provide an efficient utilization of resources by clarifying the strategic vision and mission to the managers and the employees. Furthermore, it would enhance the Nokia Corporation’s overall performance by focusing strategic implementation on four aspects of development, namely customer, internal, learning and growth and financial perspective. By adapting this approach, Nokia would be able to develop a customer-centric strategy that would be linked to the budget and which facilitates sustainable growth and development (Mišanková & Kočišová, 2014)..
Furthermore, Nokia Corporation can also effectively execute the strategy by following the winning wheel framework which also reinforces that a balanced, well adaptive, perfectly aligned and clear strategy managed by strong strategic leadership can enhance the strategic implementation process of the firm. When Nokia Corporation would follow these models to enhance it’s strategic implementation process, it would enable the company to attain a sustainable competitive advantage in the industry (Hubbard, Rice & Galvin, 2020).
Conclusion
Strategic implementation is a significant part of strategic management which enables the organization to attain sustainable competitive advantage and prosperity. Organizations with rigid corporate leadership and incongruent administrative and control frameworks tend to derail the execution process of their strategies. Furthermore, companies with incongruent management systems that lead to development of absurd strategic objectives also contribute in misguiding the implementation process. Lack of effective strategic management jeopardizes the company’s leadership, it’s profitability and long-term growth and survival. Hence, organizations should strengthen their implementation frameworks by adapting strategic models like balance scored card and winning wheel framework, which would enable the organization to align systems and structures within the organization and maximize the value creation in order to increase the effectiveness of strategy execution.
A well-implemented strategy would enable the organization to efficiently utilize the dynamic competencies and capabilities of it’s workforce, avail opportunities for mergers, alliances and diversification, thereby strengthening the management systems and structure within the organizational dynamics. This predicament would also enable the firm to satisfy it’s key stakeholders, strengthen the customer-value creation network and achieve sustainable competitive advantage.
References
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