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Nokia creativity
1. Name / ID # : Tugce Guner / 630052291
Azar Hasanov / 620036032
Alibay Alibayli / 590066639
Ayush Agrawal / 630058475
Module Name : BEMM162 – The Creative Organisation
Assignment # : Assignment 3
Topic : Nokia Company Organizational Creativity Report
Module Convenor : Dr. Varuni Wimalasiri
Number of Pages (including this one): 18
2. Table of Contents
Executive Summary............................................................................................................................ 2
Introduction............................................................................................................................................ 3
Aim ............................................................................................................................................................. 4
Investigation Methods........................................................................................................................ 4
Literature Review ................................................................................................................................. 4
Findings ................................................................................................................................................... 6
External Factors ...............................................................................................................................................6
Recruitment and diversity............................................................................................................................6
Organizational environment........................................................................................................................8
Crowdsourcing..................................................................................................................................................9
Conclusion............................................................................................................................................10
Recommendations.............................................................................................................................11
Methods of evaluating creativity............................................................................................................ 11
Different disciplines drawn to generate solutions ......................................................................... 12
Diverse Recruitment.................................................................................................................................... 12
Structure........................................................................................................................................................... 13
Cultural Adjustments .................................................................................................................................. 13
References............................................................................................................................................14
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Executive Summary
Nokia is a Finnish company operating in the fields of network infrastructure, location-
based technologies and advanced technologies and is headquartered in Espoo, Finland
(NOKIA, 2014a).
Nokia was the dominant player in the mobile telecommunications sector for more than a
decade (Lee, 2013). It was not the first company releasing a mobile phone, but the thing
making Nokia get to top was to do this well by reaching the true mass appeal (Lee,
2013). Ben Wood, who is an analyst at CCS Insight, indicated that people would not talk
about the brand names while they were talking about the phone they have, they would
only say the numbers like 3310 or whatever they had; because there were no mobile
phone brands as big as Nokia (Lee, 2013).
This is a fact that Nokia first fell behind Apple by the year 2007, when the so-called
revolutionary mobile phone, iPhone was introduced by Steve Jobs. Then Samsung
started rising in the mobile communications sector. While these two mobile giants were
leading the sector, Nokia fell behind step by step.
Blaming only one reason would be unfair for the sudden fall of Nokia; however, the first
reason behind this fall was the operating system that Nokia was using on their mobile
phones. Nokia was still making great phones, but the time that iPhone was introduced
they were using Symbian systems for their phones and Symbian have quickly been out-
dated; as Ben Wood indicated that “Nokia missed the importance of software” (Lee,
2013). In addition to this, the timing of changing to the Microsoft operating systems can
be considered as late; since Apple and Samsung have already taken over the
dominance in the market and left Nokia behind. There is one more fact that should not
be missed out, which is that, Microsoft’s Windows Phone system was the only choice
left for Nokia to survive and differentiate.
Another reason was that Nokia could not respond to the trends in mobile market quickly.
They waited a year after iPhone to unveil their fist touchscreen phone which was less
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than a smartphone but more a handset optimized to play music (Cheng, 2014). In the
late 2012, a research conducted by Roger Cheng, who had the chance to talk to former
and current employees of Nokia that time, resulted that “to many of the employees of
Nokia, it wasn't just arrogance that kept them rooted in Symbian, but the inability to take
risks” (Cheng, 2014). By the end of 2013, Nokia's market share was still 15 percent,
which was basically a result of their cheaper basic phones, according to data compiled
by Strategy Analytics; however, smartphone market share of Nokia was in the low
single-digits (Cheng, 2014).
Microsoft bought Nokia’s handsets production on April 25th
; therefore, the question for
Nokia is now “whether or not the Nokia and Lumia branding will dissolve” (Struble,
2014). Stephen Elop, who is the former CEO of Nokia and now heading the Microsoft’s
devices division, hinted that the Nokia brand may disappear in the future along with the
Lumia range. He spoke to TechRadar and said: “What we have to decide is what the
brand will be. Because we have not decided what brand will be dominant for
smartphones, that’s work that’s still ahead. And of course the way we’ll go through that
process is to assess with consumers what they respond most positively to, what
conveys the best message and the best hopes of success.” (Smith, 2014).
Introduction
Before taking further steps, it is useful to understand what creativity is. Creativity is
defined as “the use of imagination or original ideas to create something; inventiveness”
(Oxford Dictionaries). It is a concept that is very useful for the companies to differentiate
themselves from their competitors, therefore there’s a need to apply it in the
organizational framework successfully. Shalley and Gilson define organizational
creativity as “the development of ideas about practices, procedures, products or
services that are potentially useful to an organization” (Shalley & Gilson, 2004).
In the case of Nokia, the level of creativity also needs to be considered on the cultural
level. Nokia’s code of conduct is “striving for the highest degree of ethical conduct in
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every action they take” as indicated in their corporate website (NOKIA, 2014b).This is
based on the Finnish culture of the company. Focusing on ethics and risk management,
Nokia missed out the importance of organizational creativity in their corporate
governance structure. The cohesive Finnish culture affected Nokia’s decision of not
embracing creative ideas, consequently not taking risks (Beckett, 2011).
Aim
The aim of this report is to evaluate the level and processes of creativity at Nokia by
analyzing the factors by looking at the historical facts that left the company behind its
competitors. By the time the writers of this report decided to make their research about
Nokia, the basic aim was to make assumptions for the future of the company.
Meanwhile, it was announced that Nokia would be acquisited by Microsoft Company
who was in partnership with Nokia on producing Windows operated Lumia
smartphones. The acquisition of Nokia by Microsoft is now confirmed and the deal,
announced last fall, is worth more than $7 billion (Molina, 2014). Therefore, this report
focuses on the reasons of the fall of the company by pointing out the lack of creativity
processes in their organizational structure.
We hope to identify the core differences in the company structure with main competitors
like Apple and Samsung to find an answer to this particular question: “Why Nokia
stayed behind in the race of innovation on mobile phone and tablet PC industry?”
Investigation Methods
The information to be used in this research project is going to be provided by mainly
looking at the company reports and press releases.
Literature Review
Progressively, creativity has become appreciated and esteemed across a multiplicity of
responsibilities, professions, and businesses (Nonaka, 1994). In the present day’s fast-
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paced vibrant work setting, supervisors and administrators go on to apprehend that to
keep on being competitive they require their workforces to be enthusiastically involved
in their work and putting an effort to produce original and fitting merchandises,
practices, and methods. Granting the level of creativity needed and the significance of
creativity can vary contingent on the jobs or profession in hand, a great deal of
supervisors would approve that there is a possibility, in virtually every job, for personnel
to be extra creative (Amabile, 1997). Additionally, since individual creativity offers the
basis for organizational creativity and innovation, and these have been associated to
company performance and existence, it is imperative, if not grave that personnel are
creative in their work (Shalley and Gilson, 2004).
Creativity as a whole in an organization comes down to individual level creativity.
According to Bharadwaj and Menon, individual level creativity can be considered using
individual creativity mechanisms. These mechanisms talk about actions undertaken by
individual workers within an organization to improve and augment their proficiency and
competence for creating something, which is significant and innovative within their work
setting (Bharadwaj and Menon, 2000). Research done has revealed findings that
companies that offer knowledge creating environments end up being more successful
than other companies. Organizational creativity mechanisms talk about the degree to
which the organization has introduced proper methods and implements, and delivered
resources to embolden evocatively innovative performances within the organization
(Ford and Giola, 1995).
Employing data collected from 634 organizations, the results of the research revealed
that the existence of both individual and organizational creativity mechanisms brought
about the maximum level of innovation performance. Institution of a creative
environment within an organization, even with low levels of individual creativity has
proved to create more innovation within that particular organization (Nonaka, 1991).
Employing creative individuals does not simply increase creativity within an
organization. Instead, it is important to institute a creative environment for such
employees to work in. The consideration of what and how creativity impacts innovation
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performance can be critically improved by added study that assimilates the inherent and
extrinsic drivers of creativity (Bharadwaj and Menon, 2000).
Findings
External Factors
Some of the external factors that might influence the creative environment in Nokia
include competition and diversity. With increased competition from other organizations
such as Apple, Samsung and others, Nokia might be forced to become more creative in
the creation of its products as well as the processes and procedures being used.
Similarly, the creation of diverse products could motivate employees to think out of the
box and become more creative in the merchandises being produced in the coming. With
the incessant change in technology in the present day world, individual as well as
organizational creativity becomes imperative, and the companies are forced to generate
a more creative environment for their employees.
Another external factor that might be deemed to alter the creative environment of Nokia
is the preferences of the customers. There are constant changes in the environment
with individuals preferring products that fully suit their needs and beyond. This affects
the creative environment of the company as it is forced to create better and more
innovative products that suit these needs of the customers (Inkpen, 1996). In addition,
with the diversity in the products created by other companies, employees in Nokia and
the organization as a whole was forced to be more creative in coming up with novel and
original products which are different from the rest. This factor boosts creativity within the
organizational environment.
Recruitment and diversity
According to Mullins (2006), the company pays special attention to the recruitment
process in order to pick up the experienced workers to support the individual level
creativity. Dijk and Ende (2002) state that the recruitment of experienced employees
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plays a key role in organizational creativity. More than that, another analysis is carried
out in order to check the cultural compatibilities of the new employees (Steinbock,
2001).
Recruitment process of Nokia also includes the behavioural interview section that aims
for checking an individual's creativity level (Bardia, 2005). During that interview, several
questions are being asked about the previous initiatives that an employee took during
the creativity process. Despite the fact that Nokia's HR department have got some
frameworks and tools in selecting the applicants, in order to increase the diversity they
sometimes allow some flexibility in order to employ the people from diverse background.
The reason is that the company believes that creativity is driven by the diversity (ibid,
2005).
Cultural differences are another factor to consider that could affect the creative
environment of an organization. Nokia is a global corporation, which encompasses
employees from different cultural backgrounds. However, in order to gain mutual
creativity within the organization, these employees have to work together. Being from
different cultural backgrounds with different points of views and ways of life, this can
affect the creative environment of the organization (Niu and Sternberg, 2001). For
example, the Chinese employees would differ in their own perspectives with employees
from the Western world due to different points of views (Nisbett and Masuda, 2003).
However, Gilson (2001) argues that diversity and dissimilarity can increase creativity.
This is because it enhances composition of different capabilities and understanding
within a creative setting or an organization.
The event of “World Cafe Methodology” was applied to create an environment in which
Nokia employees from diverse backgrounds could discuss the issues. While the
discussions carried on, facilitators could take the ideas those agreed. However, the
concept is not used now, as it has been valued as impractical (Willigan, 2009).
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Organizational environment
Institution of a creative environment within an organization, even with low levels of
individual creativity has proved to create more innovation within that particular
organization (Nonaka, 1991). Therefore, employing creative individuals alone might not
increase creativity within an organization. It is also important to institute a creative
environment for such employees to work in. The consideration of what and how
creativity impacts innovation performance could be critically improved by added study
that assimilates the inherent and extrinsic drivers of creativity (Bharadwaj and Menon,
2000).
Nokia could take note of creative structures set in place by Google Inc. The employees
who are deemed to be the creative centre of the organization are not given any chain of
command. There is an open door system, which encourages employees to be more
creative and openly discuss any issues concerning the products, processes and
practices of the organization (Scott, 2008). The organization has also gone ahead to
employ organizational creativity. The workforces are encouraged to work in groups so
as to come up with more creative ideas and products. This ensures that the creative
strengths of each and every employee are utilized and harnessed. The company has
also created a creative environment whereby the creative employees are encouraged to
work when it suits them best and are not given a restricted work time line as all the
other companies. This has greatly increased the level of creativity within Google (Scott,
2008). Nokia might also use this proven technique to foster the creativity within the
organization.
One of the problems in Nokia as an organization is the dawdling decision making which
slows down and terminates the possibility of creativity and innovative activities. Some of
the problems experienced by the company are deemed to be due to poor decision-
making and internal rivalries. Creativity is hampered if the organization does not
encourage or foster its continuity. In particular, individual creativity becomes diminished.
Employees, who are responsible for the creative and innovative activities, stop being
effective once the organization lacks recognizing or considering their work. Nokia could
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employ some of the institutional creativity structures set in place by Apple Inc. Apple
has been one of the outstanding companies that fully encourage and inspire their
employees to incessantly come up with innovative products. The level of creativity
within the organization is fostered, and the creative ideas brought forth by employees
fully considered (Zylla-Woellner, 2010).
It has to be noted that the organisational culture of Nokia, which is the cohesive Finnish
culture, prevented Nokia managers to take risks and not support creative ideas, thus
underestimated the changes in the market (Beckett C., 2011). According to Denning,
workers in Nokia had been creative enough to come up with a prototype and model of a
smartphone several years before their inception into the market. However, the company
failed to consider these creative ideas from its employees and discarded them. Several
years later, Apple introduced the iPhone into the market which propelled into success
and in turn caused the downfall of Nokia (Denning, 2011).
With these in mind, it is imperative for Nokia as an organization to take risks. It is
through such risks that creativity produced by employees can be turned into innovation
and success. The company also has to define its corporate culture to suit the levels of
creativity of both the individual creative thinkers but as well as the organization as a
whole. This could be achieved through implementing as well as recognizing the creative
ideas brought forth by the employees.
Crowdsourcing
Nokia weighs in on its external environment as a basis of creativity, and in turn employs
its customers as a foundation of motivation and incentive. For example, the company
uses online forums and discussions to permit the public to recommend and propose
new concepts and enhancements as well as offer more insight regarding the existing
products and systems set in place. Being in partnership and association with the public
and the consumers, Nokia is able to make the most of the level of creativity provided by
the external sources. This in turn expands and broadens the knowledge levels of the
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institution. In addition, as much as these ideas and recommendations might not be
groundbreaking, Nokia uses them to develop and integrate the needs of the customers.
This as a result, fosters creativity of the companies by the creation of standards that are
recommended.
Another source of creativity that Nokia uses for its benefit is the creative environment
outside of the organization (Vanhemert, 2010). Nokia created a web-based environment
called "Ideasproject" where anyone could participate, share thoughts, and create mobile
apps (Ideasproject, 2014). Nokia's online forums also serve for this purpose. This kind
of projects helps Nokia to benefit from the creativity of its customers, to get a customer
feedback on the products and form a basis for the future developments. Additionally,
this is also a way of diversification where the company is not only depended on the
internal environment but uses the external environment which provides an opportunity
and reduces the risk of lacking the improvement techniques.
Conclusion
It is bewildering to comprehend how Nokia has been a dwindling player in the mobile
phone market considering it was the main player by far a few decades ago. Institutions
such as Samsung and Apple have grown and come up with ground breaking and
innovative ideas that have seen them stake a place as the main players in the industry.
Therefore, for a company that highly relies on creativity has got to come up with creative
and innovative concepts and in the end implement such ideas.
Regardless of employing and recruiting the most creative individuals in the environment
or employ the recommendations and ideas from its consumers, Nokia’s vertical
corporate structure inhibits success of such aspects. The company is too risk averse
and the managers of the companies are afraid to implement and finance ideas that are
pitched through by their creative thinkers. The company goes wrong because it places a
lot of emphasis on the resources used and barely focuses on the processes or the
results that follow through. For Nokia to improve its position in the market it was
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necessary to take risks and also change the structure of the company. The creative
employees, even those on the lowest levels should have been given the chance to bring
out their thoughts and ideas, not only on novel matters but also on the existent nature
and structure of the company.
Recommendations
In as much as Nokia has full knowledge of the importance and need to improve on
creativity levels, at least as a part of Microsoft today, it is imperative for the organization
to place emphasis on employing and encouraging changes in the following aspects:
Methods of evaluating creativity
Some of the methods that managers can use to evaluate the creativity levels in an
organization include brainstorming. It is usually used by managers in order to gain
knowledge quickly on any upcoming or recent developments or technologies (Bouchard,
1971). According to Bouchard, another method employed was called the Morphological
box but was not frequently used as much as brainstorming. Another method that can be
employed is the use of teams. The managers can place the creative thinkers in teams
and initiate programs or projects to evaluate and ascertain the level of creativity. This
method can also be used to evaluate the level of individual creativity in relation to
organizational creativity (Crawford, 1966).
Environmental and psychological evaluations can also be another method used by
managers. These methods encompass the usage of sound, pigment, sensory incentive
or deficiency, scent, and the likes, to change the brain's regular environment to support
creativity (Crawford, 1966). In order to understand creativity in this kind of environment
it is important for managers to create a good relationship with the creative thinkers.
Having an atmosphere where such creative thinkers are given the platform to bring out
their creative ideas and trust the organization, it becomes easier to understand creativity
(Gee and Tyler, 1976).
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Different disciplines drawn to generate solutions
The company can also draw solutions from other disciplines such as psychology.
Studies in psychology have revealed that individuals tend to be more aggressive and
determined once their work is recognized. Therefore, it is imperative for Nokia as an
organization to recognize and ascertain the level of creativity produced by its
employees. According to research done by Dehnavieh et al, the factors that influence
creativity and innovation within employees such as managers are mostly individual
factors such as lack of appreciation and motivation (Dehnavieh et al, 2010). These can
help Nokia as an institution to better institute a creative environment which would in turn
increase the level of creativity in the forthcoming (Anderson and King, 1993).
Other solutions can also be drawn from other disciplines such as social learning theory
and cognitive theory. These theories imply that a certain set of behaviours if not all can
be learnt through observation and therefore passed on. This usually can help in
leadership and passing on new behaviours or certain skill sets that can easily be learnt.
This notion can be highly beneficial to Nokia as it can increase its levels of creativity
through social learning theory. This could be implemented and employed in
organizational creativity through individual creativity. Creativity in a team can be
established through the observation of creativity levels of an individual.
Diverse Recruitment
It is necessary for Nokia to cease being stingy and restrictive while seeking and
recruiting their employees. More so, Nokia being an organization that is heavily
dependent on creativity to have a competitive advantage over its rivals in the phone
market and industry, it is important for them to permit a wider range of employees
during recruitment. This will aid the company in being able to react properly to changes
in its environment. Therefore, the company should not always focus on the level of
experience of employees while hiring them.
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Structure
The main structure that was prevailing in the company is a vertical and ordered one. It is
recommended that the company should institute and follow a more decentralized and
horizontal structure. It is necessary for the company to institute a friendlier and
somewhat lenient corporate culture (Nonaka and Toyama, 2003). A more permitting
and open-minded structure will foster communication of creative and notions as well
increase levels of creative thinking amongst the employees. With this in place, creativity
will emerge from all areas of the organization (Swailes, 2000).
Cultural Adjustments
Due to the cohesive Finnish culture, the company is overall risk averse. It has
previously and frequently observed that Nokia instigates numerous ideas and notions
but fails to make them come to life due to not taking risks. It is imperative for the
company to realize that only when these ideas are implemented can they be turned into
valued resources in the end. Being set in an industry that is based on technology and
values inventiveness and groundbreaking concepts. As a part of the Microsoft now,
Nokia has to start taking risks and be more willing to take up such ideas and make the
most of the creativity presented (Shalley and Gilson, 2004).
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