Nokia divided its mobile phone business into nine units in 2002.

Organization Restructuring at Nokia

Nokia divided its mobile phone business into nine units in 2002.

The caselet discusses the organizational changes made by Nokia in the wake of competition in 2002 and the impact on its business. It also discusses the organizational restructuring made in 2003 and gives a brief description of new business units formed as a result of restructuring. Finally, it gives an insight into the possible benefits for Nokia from the new organizational structure.

Issues:

» Restructuring as a tool for growth


» Importance of flexibility in organization structure 

Introduction

Finland-based Nokia was a leading manufacturer of mobile handsets in the world and a renowned supplier of fixed broadband and Internet Protocol (IP) networks. The company was the original producer of hand portable phones.  Its phones, introduced in 1987, revolutionized the phone market, which had been characterized by huge, bulky models till then…

Questions for Discussion:

  1. Nokia divided its mobile phone business into nine units in 2002. Again in 2003, the top management announced a restructuring of the organization. Discuss the reasons that led to restructuring Nokia’s organizational structure in 2003.

  2. “With our flexibility and the new structure we are truly in the best position to bring the benefits of mobility to everyone and to take the opportunity of the next growth wave in this industry.” Mention the benefits that Nokia expected to derive by restructuring its organization.

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