Nokia creativity

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1. Name / ID # : Tugce Guner / 630052291 Azar Hasanov / 620036032 Alibay Alibayli / 590066639 Ayush Agrawal / 630058475 Module Name : BEMM162 – The Creative…
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  • 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
  • 3. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 2 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
  • 4. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 3 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
  • 5. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 4 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-
  • 6. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 5 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
  • 7. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 6 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
  • 8. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 7 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).
  • 9. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 8 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
  • 10. BEMM162 THE CREATIVE ORGANISATION Nokia Company Organizational Creativity Report 9 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. Crowdsourc
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