We are not doing anything wrong, but somehow, we lost”, said the former CEO of Nokia, Stephen Elop as he wiped a speck of her tears, when it announced the acquisition of Nokia by Microsoft in 2013.
So, why Nokia went bankrupt and then Microsoft bought?
No one denied, Nokia never be the giant cell phone the world as if it will never be defeated in the decade of the 1990s to early 2000s. Nokia mobile phones used by so many people that are still legendary to this day. No one guessed and thought, why Nokia went bankrupt.
But the might of Nokia began to slack off when Apple introduced the iPhone in 2007. His name is now indeed appear again through HMD Global, which holds the license of the brand, but Nokia is the first company is different.
What exactly makes the collapse of the dominance of Nokia in the mobile phone industry? Why is Nokia bankrupt? This question attracted a lot of attention of researchers and academics to be used as a case study.
Why Is Nokia Bankrupt?
Of course, there are a lot of factors are quite complex. However, some researchers highlight three main things from the company’s internal factors, namely the quality of the technology that the loser of the Apple, the arrogance of the managers, and the weakness of the vision of the company.
Three points are then specified in more depth by a Team of O. Vuori, an assistant professor of strategic management, University of Aaltoo and professor of strategy, Qui Huy, of the higher school of business INSEAD Singapore.
They wrote a scientific paper of Distributed Attention and Shared Emotions in the Innovation Process: How Nokia Lost the Smartphone Battle. In this study, the researcher conducted interviews to 76 the manager of the top-level and medium businesses as well as engineer Nokia. They also interviewed experts external and perform an in-depth investigation.
Work Culture Is Gripping
In his study, Huy and Vuori find that the work culture of the “gripping” to be one of the causes why Nokia went bankrupt.
At that time, the leaders of the so-called pretty bad temper and make the manager of the intermediate level of fear. They are afraid of reporting the actual situation, due to the threat of dismissal. Especially about the sales reports that fail to meet the target.
On the other hand, executives Nokia afraid to admit the quality is actually the Symbian operating system which is run Nokia device that moment. They worry if it recognizes it, investors, suppliers, and especially of its users, leaving Nokia.
But they are aware, it took a long time to build the operating system that could match or surpass the quality of iOS made by Apple. At the same time, managers of top-class intimidate the manager of the intermediate level, accused them of less ambitious to reach the target.
The threat encourage managers mid-level eventually lied to the higher ranks because according to them, there’s no point in telling the truth.
The top manager of Nokia called less competent in technical matters, so that affect the way they assess the quality of the technology made them in setting targets and decisions.
Meanwhile, at Apple, the leadership position is filled by the engineer. One of the blunders ever made is, the officials of Nokia decided to allocate resources to develop the new phone, to meet the market demand in the short term.
They do not make use of them to achieve the target of long-term, such as developing a new operating system.
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