Business Environment of Nokia

ASSIGNMENT ON BUSINESS ENVIRONMENT ANALYSIS OF NOKIA

NAME:

HIREN D ASRANI

ROLL NO: ERBF12008

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INTRODUCTION:

Nokia is the world’s number one mobile phone company and a successor in the global phone Industry. Being an Industry leader on a Global level, Nokia is fully engaged into excelling environmental performance and assume Cooperate responsibility in all their operations. It therefore maintains its position by living up to its slogan, “Connecting People”, by abiding to three main objectives; Speed of anticipation and fulfilling evolving customer and market needs, strong customer recognition and upholding a solid and positive relationship with its stakeholders. However, as any other organisation, Nokia faces many challenges which forces flexibility and ease of transformation on their way of executing operations. How then, does Nokia operate in accordance to the different aspects as far as business is concerned?

1. BUSINESS ORGANISATION AND ENVIRONMENT This is the first aspect in consideration and Nokia must relate the different Environment with their effects to the Organisation respectively. Environment are divided into two main categories, Controllable and the Non-controllable Environment, and they work in a butterfly effect system which means alteration of any environment can affect the other and so on. Overview of Environment and their relation to Nokia

CONTROLLABLE ENVIRONMENT

NON-CONTRALLABLE ENVIRONMENT

1. LABOUR 2. RAW MATERIAL 3. EQUIPTMENT 4. CAPITAL 5. ENTERPRENEUR CONTRALLABLE ENVIRONMENT

1. 2. 3. 4. 5. 6.

POLITICAL/LEGAL ECONOMY SOCIO-CULTURE TECHNOLOGY CHANGE COMPETITORS GEOGRAPHICAL FEATURES This Environment focuses on the attributes that add up to structure the organisation, the 7. of STAKEHOLDERS: Employees, reason for its existence. They can be controlled in the sense that the organisation dictates the Community, Suppliers quantity and how much to be used depending on their available resources and therefore differ and Customers. 2

from different organisations. Refer to the diagram on page 1; the five attributes as you can see are the major make-up of the organisation and without them, it is dormant to all its operations.  Labour points out the human resources, the actual workers who provide physical or intellectual contribution to the everyday activities within the organisation.  Raw Material is the physical bits and pieces that are provided by suppliers to manufacture the company’s end products.  Equipment refers to the machinery or devices that play a role into converting the raw materials to finished end products.  Capital is the cash flow or the monetary aid the organisation needs to acquire and achieve its goals, it is the most important because it keeps the other attributes active and functional.  Last but not least, the Entrepreneur who are directly involved in the organisations’ operations. These are Individuals or Groups that take into risk and invest so as to see the Company achieving the posted goals.

Adding on to the listed, each attribute is vital for the company existence but they must be balanced and considered equally in order to prevail in the market competition. Nokia recognizes this and take hide to see each attribute contributes accordingly.

NON- CONTRALLABLE ENVIRONMENT

This environment sheds light on indirect attributes that affect the organisations’ operation. They cannot be controlled in the sense that the organisation is unable to change or alter them in any way but on the flipside, they can alter the organisations’ intermediate processes. Refer to the diagram on page 1, each attribute in this environment plays a role into shaping the way of how the organisation must carry out its operation and they differ in their magnitude of effect, thus cannot be considered equally by the organisation.  Political/Legal environment are usually considered as one because they are enforced by the nation’s government. It is vital for Nokia’s operation because different nations with their respective government have different Political/Legal platforms respectively; Nokia operating on a global level must abide to ground rules and regulation in different markets of host countries around the world. To its success, Nokia surveys its scope of limits in order to isolate prohibited actions, regulations and aid from the government so as to withstand the international trade. Quotas (limit to goods imported), embargoes (restrictions), tariff and tax charges, subsidies and patents over certain technology or 3

equipment are decided by the government so Nokia works hand-to-hand with authorities to gain maximum advantage to the Nation’s target market. Laws of copyright and abuse of phone usage keeps Nokia ahead, it limits any space of intrusion or misuse of their products.  Economy tells the production and consumption of goods and services. As far as Nokia is concerned, the economic system is critical as it can control what the organisation is to produce, how it should produce and the category of recipient who should use their end products. On one hand, aspects of international trade is important for Nokia being the global supplier of mobile phones and on the other hand, the knowledge concerning the nation’s economic status (Type of economic system practiced, Inflation rate, level of employment and exchange rate) is equally as important to realize future plans for personal and financial safety together with enhancing entrepreneurship.  Socio-culture focuses on how Nokia blends in with components in a society; that is culture, social class, lifestyle and demographic and psychological factors making up the society. Nokia operates in a diverse number of culture and all levels of social class simply because different models are frequently released to satisfy all individuals despite their difference in race, nationality, religion, income level or beliefs among each other. Mobile phones can easily adapt to any culture and can be used to support different aspects and existing patterns of Individual’s lifestyle or behavior.

 Technology change defines how fast technology advances. Being the predominate medium by which we get things done; technology as a process, in terms of mobile phones defines the way we make contact. Not only does it helps shape culture but also changes other aspects within and/or outside the organisation. The success of Nokia is based on constant innovation on human technology. By enhancing communication and exploring new ways to exchange information, connecting people, Nokia allow users to get more out of life.

 Geographical features explore the twists and turns of Mother Nature. Note on weather, climate, landscape, scope of natural disasters and other physical features of a nation plays a role for any organisation.

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This environment can affect where to settle your business and Nokia research center must also be innovative in their product design; adding additional feature such as hydrophobic material, high melting point plastics to prevail adverse conditions of a nation.

 Competitors are essential in a business environment as it promotes delivery of quality goods and services to the users. Threat of Entry from other new coming organisation, threat of substitute products, bargaining power of suppliers and buyers respectively and Intensity of rivalry within the industry are crucial notes that Nokia must be aware of. Adding on to that, Nokia manages to stay ahead of its competitors by investing much on Research and Development (Nokia Research Center) and upholds customer recognition, therefore manages to provide the best and maintain a trusted Brand name.  Stakeholders are groups of individuals or groups that take stake to the organisation and/or are affected directly or indirectly by its actions. Entrepreneurs and the Government are also known as stakeholders in the business world. -

Employees make up the Labour (Human Resource) but they are also stakeholders in the sense that the organisation’s actions and/or decisions can affect them and vice versa. Tasks and duties require different skills from employees so Nokia approves

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continuous learning from their employees to harvest the best result from them. Community as a whole is everyone in one place. It covers a bigger population and includes people and what affects them. Among the cooperate responsibilities Nokia possesses is to connect with diverse communities they affect so as to channel the impact into a positive societal contribution. The current strategy at play is on two major areas; using mobile communications to stimulate development and supporting young people thus managing to bridge the gaps of communication between communities. Nokia host a TV show in Malaysian most popular TV provider (Astro) called ‘Nokia Football Crazy’ and therefore staying close to its community by

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supporting the football spirit among the young people in Malaysia. Suppliers support the provision of raw materials, they add a great deal of effect onto the organisation and Nokia manages to control their bargaining power and maintain a mutual relationship. They spend years working with them and provide a good opportunity for them to improve their inputs and their environment performance. Along with that, Nokia assigns a global supplier requirement that includes ethical considerations that applies to both, direct and indirect Suppliers. 5

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As mentioned earlier, strong customer recognition is one of Nokia’s objectives to fulfill. Customers determine the success of any organisation, they have a free will on what to buy so Company’s need to seek and provide them with accessible products to meet their needs and trade with them responsibly. Product design focuses on the customer and their requirements thus summing up the slogan, ‘Human Technology’.

All Environments are essential in a business world but for an organisation like Nokia, Technology change is the most important for them to be careful with. Technology changes at a fast pace and its change will be very dramatic in the future. It is very important for Nokia to evolve their hit products. 2. CHANGING NATURE OF ORGANISATION

Nokia is a public limited organisation that is privately owned by group of Individuals. Such organisations consist of seven shareholders but of a large number of investors. They can have two directors who can retire at age seventy. Nokia practices a free trade shares with investors who can contribute capital into the organisation so there is easy transfer of shares but too many stakeholders may lead to weak control of the business.

Nokia system of operation is open in the sense that it interacts with the environment accordingly, keeps a close relationship with its employees and maintains motivation and satisfaction to increase their production.

On a further note, Nokia’s reason for existence is based on the need of faster and improved communication among people around the world. Communication in turn brought up globalization and finally development; but business environments changes from time to time and organisations need to foretell future plans and become flexible to resulting changes. Employees can bring about change due to their behavior or roles and so can Equipment (Technology) but Nokia is suited in this sector because it has invested much on Research and Development to neutralize the pressures of change along with time. Adapting to change implies stability on Organisations’ operations.

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So what is Changing nature of the organisation? Basically, how the organisation changes and how fast does it changes due to the changes in the business environment discussed previously; therefore all components of an organisation are such that they work together to control the changing business environments.

3. INDIVIDUAL AT WORK

This last aspect is about Individuals (Employees) and their relation to their work. Being the labour that works to the success of the organisation, the Head of organisation must keep in mind their significance.

As far as Nokia is concerned, the physical character is not much of criteria to be strict about; despite the gender, age, body size and their race as long as the employees perform their jobs well. As a matter of fact, Nokia branch offices set up events to embrace the celebrations of different cultures from respective nations just to make them feel at home. However, Nokia takes note on Employee’s ability and personality. Different tasks and department require special abilities that are not equal thus not every employee can possess. For example the R&D department will require employees who are creative and innovative; likewise, the Logistic department will require ones who are good at computing and analyzing vast figures.

Employee’s personality also differ from one to another, while others are calm and self controlled, some may be temperate, emotional or self centered. Working together is a challenge that some may find it hard to deal with and in turn affect their work. Nokia can find ways to motivate their employees based on their abilities and personality and these are features they possess and cannot be overlooked when being recruited to work in the organisation.

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