Nokia

NOKIA’S EVOLVING ORGANIZATIONAL STRUCTURE

Nokia Corporation has experienced considerable change over the past three decades, and its organizational structure has changed just as dramatically. In the early 1990s, the Finnish company had a product-based organizational structure designed around its diversified businesses: consumer electronics (televisions, audio equipment), cable for construction and power transmission, industrial rubber (tires, footwear), and a recently acquired telecommunications business that would soon evolve into cell phones.

Nokia became the market leader in cell phones by 1998 (overtaking Motorola), so it sold most other divisions and designed a new organizational structure that highlighted its cell phone and consumer electronics businesses, as well as several function groups (finance, human resources, etc.). The consumer electronics business was not sufficiently profitable, so it was sold, and Nokia drew a new organizational chart in 1999 centered on cell phones, the emerging business of mobile networks, ventures (emerging Internet mobile technology), and communication products (digital terminals).

By 2003, the cell phone market was converging with photography, games, music, and other multimedia content, so Nokia added a new “multimedia” division to keep the company at the forefront. In 2006, the company’s burgeoning network division was spun off as a joint venture with a similar product group at Siemens.

Nokia’s earlier organizational structures gave some priority to Internet and multimedia technologies, enough to keep the company on pace with the quickly emerging smartphone market. But Nokia was caught off guard by the rapid development of smartphones, initially by Research in Motion (which makes the BlackBerry) and more recently by Apple (iPhone) and Google (Android operating system). Faced with declining sales, Nokia recently announced a new organizational structure that would focus on smartphones and traditional cell phones.

“Nokia...