Due to the globalisation and the development from a seller’s to a buyer’s market, the competition becomes more and more important. This results in an increasing pressure on costs and a rapid acceleration of innovation cycles. Products should be made available in a short time and need to be in high quality and at a reasonable price. This is important for the project management through using methods for scheduling and controlling.
Firms have to engage in transformation processes that aim to revitalize the firm’s business model and make them more efficient and innovative (Aspara, 2011).
This essay has been written to focus on the effect of project management on the company Nokia
Moblie Phones Ltd. in the 21st century business.
In 2013 Microsoft bought the Device and Services business for €5.4 billion from Nokia
(Majanoja, Loney, Wörlund, Linko, & Leppänen, 2014). What have Nokia should done to prevent this trend? First, we have to look on the history of Nokia.
Nokia Cooperation merged in 1967. Between the late 1950’s and 1960’s Nokia became started to run business in the computer industry. They already had good experience in telecommunication and electronic engineering since 1990’s. Nokia acquired Salora in 1979 and named it Mobira Oy. Mobira was the first part of the company, which engineered mobile phones for the NMT (Nodric Mobile Telephony) standard. Mobiras market share in 1988 was one of the biggest (13.8 %). However, in 1991 Finland was in financial crises, which influenced Nokia in a big way. They made losses and therefor they bought Technophone LTD and the internal language was changed in English (Bouwman et al., 2014). This was a important step to become more international in the globalised world. Marketing facts like the meaning of the brand became more relevant. Nokia changed his name into Nokia Mobile Phones Ltd. and in the 1990s and early 2000 Nokia was one of the biggest companies in the telecommunications industry in terms of volume, sales and profit (Alcacer, Tarun Khanna, & Christine Snively, 2014).
However, by the late 2000s, it failed to make the transition and Nokias position as market leader was threatened by competition from new highly innovative manufacturers. Apple's 2007 release of its iPhone established a big competitor. Since then Android and IOS made a bis market progress. Because of that, Nokia hired new CEO (Stephen Elop) in 2010. He released a new operation system, called “Windows Phone” and took the biggest risk ever. Nevertheless, the
new System failed completely. Since then sales dropped, and many R&D facilities were closes and the volume of sale was reduced from € 110 billion to € 15 billion in 2012.
The reasons of failing are manifold. To give one man so much power is dangerous. Hes was not being able to translate strategic management to the changing environment. Leadership of one person is most time not productive (Wit & Meyer, 2010). Mixed personalities in small boards, like a visionary and a builder would lead to more stability. Because of the fast growth between 1990’s and 2000s the organisation has to be designed completely new and a lot of processes hat to be managed. The result was that the controlling and the scheduling of different parts of the company conflicted. However, strong market values did lead to a gap of focus on the problems. The leadership for many years, in which Nokia was focussing on excellence and technical integration, made them vulnerable. The consequence was a weak position of Nokia in the “ecosystem” and a bad project management to compete with high innovative competitors.
They have been focused too much on the product development (Bouwman et al., 2014) and not on the software development. It is important to get and keep the technological leadership in this fast changing environment. For this aim it is not only about a good product itself, but moreover about software innovations and the integration of hard- and software (Koski, 2010). Therefore,