Can cultures be managed within organisations?

In this blog, I will evaluate the importance of managing organizational culture through using the case study of Nokia. The blog will introduce some important theories and frameworks that can be used to manage culture. Practical recommendations will also be suggested.

Organizational culture is
Organizational culture can be a key point that make a multinational company successful in the present era. The company has their own value belief and assumption to operate the business, so it also will apply the employee’s behavior and attitude (Gregory, Harris, Armenakis & Shook, 2009). On the other hand, it also will directly or indirectly affect the company efficiency. All facets of organizations are filled with culture, which may influence the nature and growth of organizations. In reality, the original study of corporate culture, which involved research in 1980, originated from the fields of anthropology, sociology and social psychology.

Importance of Organizational Culture

Among the principles with the greatest explanatory and predictive capacity in recognizing the reasons and types of people’s actions in organizations are organizational structure and organizational culture. Consequently, in science, these two principles are frequently used as independent variables in interpretations of various manifestations observed in enterprises and other organizational forms. The effects of organizational structure and culture on other management elements are typically studied separately and separately from each other. However, there are examples of studies examining the impact of their reciprocal engagement on the management of both society and structure.
What will be influence by organizational culture in a business:
1) employee’s behaviour and belief (Motivation).
2) The company image (Consumer and potential).
3)Productivities (Hogan & Coote, 2014).

The corporate culture normally will make the company have the different attitude to affect above aspects in the company. And the positive side of organisational culture will help active the employee’s behaviour and increase productivities and performance（Gregory, Harris, Armenakis & Shook, 2009). It would be particularly useful to investigate the relationship between organisational structure and culture, as all of them decide the actions of members of the organisation. They do so in various ways, though. Organisational culture is an essential force in organisational activity, since it guides the way individuals behave in an organisation by working from within and defining assumptions, principles, norms, and behaviours according to which members of the organisation lead themselves in the organisation’s daily activities (Armenakis & Shook, 2009).

The company background of Nokia:

Figure 1: NOKIA Logo

Nokia is a multinational company and founded in 1865 in Finland by Fredrik Idestam (Nokia, 2020). In 1990, the company began to grow telecommunications, launching the first camera phone in 2003. The company was once the biggest producer of telecommunications manufacturers. The organization has about 123,000 employees in more than 150 countries (Frank, 2011). However, owing to increased competition from other telecommunications firms, the company sold the mobile and computer business to Microsoft in 2014. Nokia developed Nokia Networks between 2013 and 2016 and agreed at the beginning of 2016 to re-enter the smartphone market.

Figure 2: The first camera phone (German, 2020)

The existing culture within the organization
Based on Charles Handy’s (1993) framework of organizational culture, which can divide to four types:
1) Power culture
2) Role Culture
3) Task Culture
4) Person culture
Nokia can be divided into Role culture, which is the company is focus on every connection between department. It can help the company avoid the risk and proved the stable work to develop. The company normally operated by the specific rules and job description (Cacciattolo, 2020).

Figure 3: Charles Handy’s Four Power culture structure (trentglobal.edu.sg, 2020)

The Challenge of Nokia:
In the role of culture, Nokia was only focusing on the development of design, make and sales phones. Therefore, the company operated stable and insignificant risk. However, Nokia did not consider about the future develop and innovation in the new field.
One reason Nokia lost in the smartphone competition is because the company didn’t take the time to improve the smartphone’s internet platform infrastructure. Since 2007, Apple, one of Nokia’s competitors, has been selling and producing high-end smartphones in the mobile industry. In the smart phone market, the Apple company aims to create and develop various emerging technologies (McCray, Gonzalez & Darling, 2011).

Figure 4: First Apple smart phone (Montgomery & Mingis, 2020).

Figure 5 (Richter, 2020)

The above graph shows the sales of Nokia started to drop dramatically between 2010 to 2012. The low performance and productivity may be the key fact that sales decrease. In 2012, Nokia only sold 11.9 million smart one and Apple is 35.1 million. Moreover, the revenue of Apple smart phone is more than ten times as compared to Nokia. In addition, Apple was releasing the iTunes 1.01 in 2001. Apple user can use it to download music and watch the video. On the other hand, Nokia did not have any reaction for this situation, and still focus other facilities that they already have (Ante, Ewing & Burrors, 2007).
We may point out that the Nokia department does not see the crisis from the other competitors based on the above scenario. And the organization has less sense of crisis to affect the output of the company, competitiveness and the actions of workers. When the first platform was launched by Apple, Nokia just began to innovate a related site like iTunes. While Nokia launched the Ovi store for consumers, the contrast with other systems such as Apple and Android are late.
Apple not only has software platform and included 1000 application. The Ovis store just has limited choice for consumers. Nokia’s mobile phone started loss the features and it affected the brand image. It also can be the reason that why the sales have dropped.
In the role culture, every employee of department need not think about the risk and creative idea to deal with external development. Therefore, the employee behaviour might not motivated for the work and brave enough to ask questions actively.
The collapse of Nokia in mobile phones should not be viewed as a single, clear answer: business decisions, fragmented corporate processes, growing bureaucracy and profound internal power struggles all played a role in preventing Nokia from realizing the change from product-based to platform-based rivalry. The cell phone tale of Nokia exemplifies a typical characteristic of mature, profitable businesses: success creates conservatism and hubris, resulting in a deterioration in planning processes that lead to weak strategic decisions over time. Where if firms adopted new innovations and experimentation to boost growth, they became risk averse and less creative with success.

Recommendation

Figure 6: Culture Web (Johnson & Scholes)

Six interrelated components are defined by the Cultural Web that are initiated by Johnson and Scholes call the “paradigm” of the work world, the template or model. It is important to begin to see the broader picture of the society by examining the variables of each one: what works, what does not work, and what needs to be improved. Firstly, we use the Cultural Web to look at corporate culture as it is today, secondly, to look at how we expect the culture to be, and thirdly, to consider the gaps between the two. The changes we need to make to accomplish the high-performance culture we desire are these discrepancies.

Figure 7: Iceberg (1998)

According to Organisational Iceberg (1998), while structured factors such as formal priorities, technology, physical resources and consumers may be observed and regulated by the company, they cannot preconceive how behavioural issues can affect their work efficiency and results. The organisation may also decide whether to adjust the corporate culture as they attempt to reach the new business or culture. The group should also aim to adapt workers that come from diverse backgrounds. It will encourage the company to diversify. The lack of change and complacency has resulted failure. Therefore, Nokia should have adopted and set up a change management team to constantly improves its technology and align its business strategic decisions with the company’s objectives. A more open and flexible culture should be adopted to ensure that people are not resistant to change.

References:

Ante, S., Ewing, J., & Burrors, P. (2007). “The Infotech 100”, Journal of Business Week, July 2, pp. 63-76.
Cacciattolo, K. (2014). UNDERSTANDING ORGANISATIONAL CULTURES. European Scientific Journal November 2014, edition vol.2(1857 – 7881).
Frank, C. (2011). The Triumph of a Global Corporate Brand: The Case Study of Nokia. The ISM Journal Of International Business, Vol. 1(2).
German, K. (2020). Notable moments in Nokia camera phone history (pictures). Retrieved 1 December 2020, from https://www.cnet.com/pictures/notable-moments-in-nokia-camera-phone-history-pictures/
Gregory, B., Harris, S., Armenakis, A., & Shook, C. (2009). Organizational culture and effectiveness: A study of values, attitudes, and organizational outcomes. Journal Of Business Research, 62(7), 673-679. doi: 10.1016/j.jbusres.2008.05.021
Handy, C. (1993). Understanding Organizations, London-UK, Penguin Books Ltd, 4th Edition.
Hogan, S., & Coote, L. (2014). Organizational culture, innovation, and performance: A test of Schein’s model. Journal Of Business Research, 67(8), 1609-1621. doi: 10.1016/j.jbusres.2013.09.007
McCray, J., Gonzalez, J., & Darling, J. (2011). Crisis management in smart phones: the case of Nokia vs Apple. European Business Review, 23(3), 240-255. doi: 10.1108/09555341111130236
Montgomery, A., & Mingis, K. (2020). The evolution of Apple’s iPhone. Retrieved 1 December 2020, from https://www.computerworld.com/article/2604020/the-evolution-of-apples-iphone.html
Nokia. (2020). Our history | Nokia. Retrieved 21 November 2020, from https://www.nokia.com/about-us/our-history/
Richter, F. (2020). Infographic: Apple beats Nokia at its own game. Retrieved 1 December 2020, from https://www.statista.com/chart/255/smartphone-sales-of-apple-and-nokia/
trentglobal.edu.sg. (2020). Retrieved 1 December 2020, from http://www.trentglobal.edu.sg/wp-content/uploads/2016/09/Unit-5-Organisational-Culture-and-Change.pdf?x80301