Multinational Company: Nokia

CHAPTER 1-INTRODUCTION

“Nokia Corporation” is a well-known Finnish multinational communications corporation, who is the largest manufacturer of mobile phones among the globe.

Nokia is involved in the telecommunications and computer software part of IT industry. Its business activities can be divided into two main sectors, namely: mobile device manufacturing and providing multimedia Internet services such as applications, music, messaging, digital map information and navigation services.

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To be a public limited company (listed &non-governmental), there are various advantages and disadvantages. Firstly, shareholders of a limited company can enjoy lower investment risk as their liability is only limited to the amount invested in the company. They need not sell personal properties to settle debts. Moreover, it has lasting business continuity as a limited company is a legal entity. The continuity of the company will not be affected by the withdrawal, death or bankruptcy of any of the shareholders.

However, it also has disadvantages like workers tend to have weaker working incentives as management and ownership are separated in a limited company, employees, but not shareholders, may not be responsible for the management of the company. Workers’ motivation for maximizing profits will then be weaker than the owners. Also, the profits tax rate for a limited company is higher than that for a sole proprietorship and a partnership.

By June30, 2010, there are around 130000 employees. Nokia’s policy is to employ local people wherever they work; resulting 54.6% of senior managers are Finnish. Among all, women make up 40.5% of the total workforce.

What is more, customers and competitors are two main stakeholders of this company. Customers’ objective is to obtain wise use of money whereas the competitors would like to differentiate its products from all other business.

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CHAPTER 2 -BUSINESS CONSTRAINTS:

Nokia-Apple patent dispute

Internal business constraints:

Creativity plays an important role in IT industry. However, in October 2009, Apple accused Nokia of 11 patent infringements. Apple’s General Counsel, Bruce Sewell even went a step further by stating, “Other companies must compete with us by inventing their own technologies, not just by stealing ours.” It shows the importance to differentiate their products from all other companies. Otherwise, it will be labeled as copycat.

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In October 2009, Nokia filed a lawsuit against Apple Inc. in the U.S. District Court of Delaware citing Apple infringed on 10 of its patents related to wireless communication including data transfer.[151] Apple was quick to respond with a countersuit filed in December 2009 accusing Nokia of 11 patent infringements. Apple’s General Counsel, Bruce Sewell went a step further by stating, “Other companies must compete with us by inventing their own technologies, not just by stealing ours.” This resulted in an ugly spat between the two telecom majors with Nokia filing another suit, this time with the U.S. International Trade Commission (ITC), alleging Apple of infringing its patents in “virtually all of its mobile phones, portable music players, and computers.”[152] Nokia went on to ask the court to bar all U.S. imports of the Apple products including the iPhone, Mac and the iPod. Apple countersued by filing a complaint with the ITC in January 2010, the details of which are yet to be confirmed.[151]

Environmental record

Electronic products such as cell phones impact the environment both during production and after their useful life when they are discarded and turned into electronic waste. Nokia tops Greenpeace’s Guide to Greener Electronics of May 2010 that ranks 18 electronics manufacturers according to their policies on toxic chemicals, recycling and climate change. [153]

All of Nokia’s mobile phones are free of toxic polyvinyl chloride (PVC) since the end of 2005 and free of brominated flame retardants (BFRs) since 2010. [154]

Nokia’s voluntary take-back programme to recycle old mobile phones spans 84 countries with almost 5,000 collection points. [155] However, the recycling rate of Nokia phones was only 3-5% in 2008, according to a global consumer survey released by Nokia.[156] The majority of old mobile phones are simply lying in drawers at home and very few old devices, about 4%, are being thrown into landfill and not recycled.[156]

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All of Nokia’s new models of chargers meet or exceed the Energy Star requirements. [157] Nokia aims to reduce its carbon dioxide emissions by at least 18 percent in 2010 from a baseline year of 2006 and cover 50 percent of its energy needs through renewable energy sources. [158] Greenpeace is challenging the company to use its influence at the political level as number 85 on the Fortune 500 to advocate for climate legislation and call for global greenhouse gas emissions to peak by 2015. [159]

Nokia is researching the use of recycled plastics in its products, which are currently used only in packaging but not yet in mobile phones.[160]

Since 2001, Nokia has provided eco declarations of all its products and since May 2010 provides Eco profiles for all its new products.[161] In an effort to further reduce their environmental impact in the future, Nokia released a new phone concept, Remade, in February 2008.[162] The phone has been constructed of solely recyclable materials.[162] The outer part of the phone is made from recycled materials such as aluminium cans, plastic bottles, and used car tires.[163] The screen is constructed of recycled glass, and the hinges have been created from rubber tires. The interior of the phone is entirely constructed with refurbished phone parts, and there is a feature that encourages energy saving habits by reducing the backlight to the ideal level, which then allows the battery to last longer without frequent charges.

IDENTIFY AND DESCRIBE TWO MAIN STAKEHOLDERS IN NOKIA:

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Jorma Jaakko Ollila (born in Seinäjoki, Finland, on August 15, 1950) is the Chairman (1999- ) and former CEO of the Nokia Corporation (1992-2006) As of June 1, 2006 he became the Non-Executive Chairman of Royal Dutch Shell and continues as the Non-Executive Chairman of Nokia.

Contents

[hide]

1 Career and Education

1.1 The Challenge of Shell

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2 Badges of Honor

3 External links

[edit] Career and Education

After elementary school education in Kirkon koulu in Kurikka Finland, Ollila started high school studies in Vaasa, in Vaasan Lyseon Lukio. Ollila studied during high school with the help of a scholarship at the United World College of the Atlantic, where he earned his International Baccalaureate Diploma. He then went on to study for a Master of Political Science (University of Helsinki), a Master of Science (Econ.) (London School of Economics, LSE) and a Master of Science (Eng.) in Engineering Physics (Helsinki University of Technology). In 2003, he was elected an Honorary Fellow of the London School of Economics (LSE), and was awarded Honorary Membership of the Institute of Electrical and Electronics Engineers (IEEE). Ollila has also received Honorary Doctorates from both the University of Helsinki and Helsinki University of Technology.

Ollila is known to have been very active in student politics during his studies, and still today participates in Finnish political debate. As a conscript in the Finnish Defence Forces, he received reserve officer training and gained practical leadership experience. While attending the Finnish Reserve Officer School he was the Chairman of his Reserve Officer Course.

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Prior to joining Nokia in 1985 Jorma Ollila worked eight years in corporate banking at Citibank’s London and Helsinki offices, and when he joined Nokia his tasks involved international investment deals. A year later, in 1986, Ollila found himself as head of Finance during Nokia’s renewal under then CEO Kari Kairamo. His career at Nokia continued as he was appointed as chief of the mobile phones section in 1990, and CEO two years later in 1992. When Ollila first came into power the company had suffered from internal disputes and had been run into a financial crisis over a number of years.

As CEO of Nokia he has been the leader of the strategy that restructured the former industrial conglomerate into one of the major companies in the mobile phone and telecommunications infrastructure markets.

In 1999 Ollila seriously considered taking part in the Finnish presidential election following a request from a member of the National Coalition Party, Sauli Niinistö[citation needed] who was at that time Finnish finance minister and who later became Speaker of the Finnish Parliament. This was in spite the fact that Ollila belongs to a different party, the Finnish Centre party, which he has been involved with since his activities in student politics at the University of Helsinki[citation needed].

He acted as CEO and the Chairman of Nokia from 1999 to 2006 although he still serves as a part-time Chairman. He was succeeded as CEO by Olli-Pekka Kallasvuo.

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Ollila is the Chairman of the Research Institute of the Finnish Economy (ETLA), the most reputed economic and social studies think tank in Finland. Since 2005, he is chairman of the European Round Table of Industrialists (ERT).

Olli-Pekka Kallasvuo

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Olli-Pekka Kallasvuo

Born

July 13, 1953 (1953-07-13) (age 57)

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Lavia, Finland

Olli-Pekka Kallasvuo (born in Lavia, Finland on July 13, 1953) is the current President and CEO of Nokia Corporation. He will be replaced in that post by Canadian Stephen Elop, effective September 21, 2010. He also is and will continue to be Chairman of the board of directors for Nokia Siemens Networks, a joint venture between Nokia and Siemens AG.

[edit] Career

Kallasvuo joined Nokia in 1980 as Corporate Counsel, and has held roles of increasing responsibility since that time. In 1987 he was appointed Assistant Vice President, Legal Department, and in 1988 he was named Assistant Vice President, Finance. In 1990 he was promoted to Senior Vice President, Finance. Since 1990 Kallasvuo has been a member of the Group Executive Board of Nokia.

In 1992, Kallasvuo was named Executive Vice President and Chief Financial Officer. In 1997-1998 he served as Corporate Executive Vice President, Nokia United States, being responsible for all Nokia’s business operations in the US. He returned to the position of Chief Financial Officer at the beginning of 1999, the position he had held prior to moving to the United States. From 2004-2005 Kallasvuo was Executive Vice President and General Manager of Mobile Phones. On October 1, 2005 he was named President and COO before his appointment to the current position, Chief Executive Officer on June 1, 2006.[1]

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In addition to his duties for Nokia he served as Director of EMC Corporation from August 2004 to January 23, 2009.[1]

Prior to joining Nokia, Olli-Pekka Kallasvuo held a variety of positions with the Union Bank of Finland.

[edit] Education

Olli-Pekka Kallasvuo holds a master’s degree in law (LL.M.) from the University of Helsinki.

[edit] Personal life

Kallasvuo is married to Ursula Ranin, a lawyer formerly working for Nokia. From his previous marriage to Anita Kallasvuo he has two adult children; Jussi and Anu Kallasvuo.

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According to his official Nokia biography page he enjoys golf, tennis and reading about political history in his spare time.

Kallasvuo’s favourite website is; “Wikipedia [the user-generated online encyclopaedia]. I love the way it aggregates information from different people.”[2]

[edit] References

KALLASVUO Olli-Pekka International Who’s Who. accessed September 4, 2006.

^ a b “Olli-Pekka Kallasvuo”. Business Week. January 30, 2010. http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId=693878&ticker=NOK:US. Retrieved 30 January 2010.

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^ Joia Shillingford (2007-06-13). “Technophile: ‘I love the nightless nights'”. FT.com (Financial Times). http://www.ft.com/cms/s/38001c0a-15d6-11dc-a7ce-000b5df10621.html. Interview in Financial Times

Nokia has sites for research and development, manufacture and sales in many countries throughout the world. As of December 2009, Nokia had R&D presence in 16 countries and employed 37,020 people in research and development, representing approximately 30% of the group’s total workforce.[1] The Nokia Research Center, founded in 1986, is Nokia’s industrial research unit consisting of about 500 researchers, engineers and scientists.[6][7] It has sites in seven countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United States.[8] Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil.[9] Nokia operates a total of 15 manufacturing facilities[10] located at Espoo, Oulu and Salo, Finland; Manaus, Brazil; Beijing, Dongguan and Suzhou, China; Farnborough, England; Komárom, Hungary; Chennai, India; Reynosa, Mexico; Jucu, Romania and Masan, South Korea.[11][12] Nokia’s industrial design department is headquartered in Soho in London, England with significant satellite offices in Helsinki, Finland and Calabasas, California in the USA.

Nokia is a public limited liability company listed on the Helsinki, Frankfurt, and New York stock exchanges.[10] Nokia plays a very large role in the economy of Finland; it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007, a unique situation for an industrialized country.[13] It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors.[14] Nokia increased Finland’s GDP by more than 1.5% in 1999 alone. In 2004 Nokia’s share of the Finnish GDP was 3.5% and accounted for almost a quarter of Finland’s exports in 2003.[15]

In recent years, Finns have consistently ranked Nokia as one of the best Finnish brands. In 2008, it was the 27th most respected brand among Finns, down from sixth place in 2007.[16] The Nokia brand, valued at $34.9 billion, is listed as the fifth most valuable global brand in the Interbrand/BusinessWeek Best Global Brands list of 2009 (first non-US company).[17][18] It is the number one brand in Asia (as of 2007)[19] and Europe (as of 2009),[20] the 41st most admirable company worldwide in Fortune’s World’s Most Admired Companies list of 2010 (third in Network and Other Communications Equipment, seventh non-US company),[21] and the world’s 85th largest company as measured by revenue in Fortune Global 500 list of 2009, up from 88th the previous year.[22] As of 2010, AMR Research ranks Nokia’s global supply chain number nineteen in the world.[23]

In July 2010, Nokia announced that their profits had dropped 40%. [24]

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Contents

[hide]

1 History

1.1 Pre-telecommunications era

1.1.1 Industrial conglomerate

1.2 Telecommunications era

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1.2.1 Networking equipment

1.2.2 First mobile phones

1.2.3 Involvement in GSM

1.2.4 Personal computers and IT equipment

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1.2.5 Challenges of growth

1.3 Recent history

1.3.1 Product releases

1.3.2 Plant movements

1.3.3 Reorganizations

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1.3.4 Acquisitions

2 Corporate affairs

2.1 Corporate structure

2.1.1 Divisions

2.1.1.1 Devices

2.1.1.2 Services

2.1.1.3 Solutions

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2.1.1.4 Markets

2.1.2 Subsidiaries

2.1.2.1 Nokia Siemens Networks

2.1.2.2 Navteq

2.1.3 Corporate governance

2.1.3.1 Former corporate officers

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2.2 Logos

2.3 Stock

2.4 Corporate culture

3 Online services

3.1 .mobi and the Mobile Web

3.2 Ovi

3.3 My Nokia

3.4 Comes With Music

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3.5 Nokia Messaging

4 Controversy

4.1 NSN’s provision of intercept capability to Iran

4.2 Lex Nokia

4.3 Nokia-Apple patent dispute

5 Environmental record

6 Research cooperation with universities

7 See also

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