Review And Study On Nokia Company Commerce Essay


Nokia Corporation is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finlands capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with over 123,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 41 billion and operating profit of €1.2 billion as of 2009. It is the worlds largest manufacturer of mobile telephones: its global device market share was about 39% in Q4 2009, up from 37% in Q4 2008 and 38% in Q3 2009, and its converged device market share was about 40% in Q4, up from 35% in Q3 2009. Nokia produces mobile devices for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia is also engaged in providing free digital map information and navigation services through its wholly-owned subsidiary Navteq. 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. It is an important employer in Finland and several small companies have grown into large ones as its partners and subcontractors. 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.

Telecommunications era

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The seeds of the current incarnation of Nokia were planted with the founding of the electronics section of the cable division in 1960 and the production of its first electronic device in 1962: a pulse analyzer designed for use in nuclear power plants.In the 1967 fusion, that section was separated into its own division, and began manufacturing telecommunications equipment. A key CEO and subsequent Chairman of the Board was vuorineuvos Björn "Nalle" Westerlund (1912-2009), who founded the electronics department and let it run a loss for 15 years.

Challenges of growth

In the 1980s, during the era of its CEO Kari Kairamo, Nokia expanded into new fields, mostly by acquisitions. In the late 1980s and early 1990s, the corporation ran into serious financial problems, a major reason being its heavy losses by the television manufacturing division and businesses that were just too diverse. These problems, and a suspected total burnout, probably contributed to Kairamo taking his own life in 1988. After Kairamo's death, Simo Vuorilehto became Nokia's Chairman and CEO. In 1990-1993, Finland underwent severe economic depression, which also struck Nokia. Under Vuorilehto's management, Nokia was severely overhauled. The company responded by streamlining its telecommunications divisions, and by divesting itself of the television and PC divisions.

Probably the most important strategic change in Nokia's history was made in 1992, however, when the new CEO Jorma Ollila made a crucial strategic decision to concentrate solely on telecommunications.Thus, during the rest of the 1990s, the rubber, cable and consumer electronics divisions were gradually sold as Nokia continued to divest itself of all of its non-telecommunications businesses.

As late as 1991, more than a quarter of Nokia's turnover still came from sales in Finland. However, after the strategic change of 1992, Nokia saw a huge increase in sales to North America, South America and Asia. The exploding worldwide popularity of mobile telephones, beyond even Nokia's most optimistic predictions, caused a logistics crisis in the mid-1990s.This prompted Nokia to overhaul its entire logistics operation. By 1998, Nokia's focus on telecommunications and its early investment in GSM technologies had made the company the world's largest mobile phone manufacturer.Between 1996 and 2001, Nokia's turnover increased almost fivefold from 6.5 billion euros to 31 billion euros. Logistics continues to be one of Nokia's major advantages over its rivals, along with greater economies of scale.


Nokia has several subsidiaries, of which the two most significant as of 2009 are Nokia Siemens Networks and Navteq.[107] Other notable subsidiaries include, but are not limited to Vertu, a British-based manufacturer and retailer of luxury mobile phones; Qt Software, a Norwegian-based software company, and OZ Communications, a consumer e-mail and instant messaging provider.

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Until 2008 Nokia was the major shareholder in Symbian Limited, a software development and licensing company that produced Symbian OS, a smartphone operating system used by Nokia and other manufacturers. In 2008 Nokia acquired Symbian Ltd and, along with a number of other companies, created the Symbian Foundation to distribute the Symbian platform royalty free and as open source.

Human Resources


The following excerpt is from Nokia Supplier Requirements, defining our expectations for Human Resources.

Workforce planning and recruiting

Supplier shall have a system to ensure the availability of workforce for current and future business needs, in a sustainable and ethical manner, at both organizational and unit level.

Resource planning

Resources need to be available to meet both current and future business needs according to company strategy. Resource planning shall be conducted at both organizational / global and unit / local levels. In particular, underage workers or false apprenticeship schemes must not be used.

Recruiting and exit procedures

Supplier shall ensure that competent and eligible individuals are recruited and appointed to open positions, according to competence, with equal opportunity and on a voluntary basis. Supplier shall check the eligibility of candidates and that they exceed the minimum legal age of employment. Upon employment, individuals shall be provided with a work contract /agreement offer letter, basic induction training and not be required to give financial deposits or original identity documents. Forced labor must not be used. Employees shall be free to leave the company after giving reasonable notice. Supplier shall ensure that exit procedures are compliant with local legislation, international labor standards and applicable collective agreements.

Non-disclosure and confidentiality agreements

Supplier shall ensure that employees working with Nokia products or projects or having access to Nokia specific knowledge, information or data, or to Nokia facilities, have signed a Non-Disclosure Agreement (NDA). Supplier shall ensure that the employees fully understand its practical implications.

Employee social security schemes

Occupational health and safety protection

Supplier shall ensure that physical and mental working conditions allow employees to perform their tasks safely and efficiently. Supplier shall have procedures for identifying, minimizing and preventing hazards. They shall be implemented as, for example, safety instructions, work procedures, preventive maintenance, employee training, identification of potential hazards and appropriate safety devices, personal protective equipment and clothing, hearing protectors, chemical control or machine safeguarding. Supplier shall nominate and train persons responsible for the occupational health of employees. Supplier shall have specific procedures in place for employees under the age of 18 (young workers). Supplier shall assume responsibility for the occupational health of employees working off-site (e.g., at customer premises).

Occupational health and safety response

Supplier shall have occupational health and safety procedures to prepare for and respond to emergency situations involving occupational health and safety risks. Supplier shall record and investigate emergency situations. Management shall encourage employees to report accidents and take action upon these records and reports.

Employee amenities

Supplier shall ensure that employees are provided with access to potable water and clean toilet facilities. Canteen facilities and food preparation areas shall be clean and safe, and food shall be provided at reasonable cost. Employee dormitories shall be clean, safe (equipped with, e.g., fire extinguishers and exits), adequately ventilated and/or heated, shall provide reasonable personal space and shall be provided at reasonable cost.

Competence analysis

Supplier should periodically conduct competence analyses to identify the knowledge and skills/competences required to perform the organization's business activities according to short- and long-term strategic goals.

Competence development

Supplier shall ensure that employees, at all levels and with equal opportunity, have the education, training and competence they need for their positions and tasks. Supplier shall develop training plans based on competence analyses and implement them to enhance and develop workforce capabilities. Supplier shall maintain a training register, detailing the training employees have received.

Nokia specific training and certification

Supplier shall ensure, on request, that personnel allocated to Nokia work have the necessary training on Nokia policies, products, processes and guidelines and, if needed, have necessary licenses and certificates. Supplier shall ensure such licenses and certificates are valid in terms of time and scope. Supplier, providing services at Nokia facilities, including (Nokia's) customer sites, shall ensure that its personnel act in accordance with Nokia values and Code of Conduct.

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Supplier shall ensure that employees can perform assigned tasks efficiently without exceeding the maximum working hours as defined by local labor laws or applicable collective agreements. Supplier shall ensure that employees have at least one day off per seven-day week, and that overtime work is voluntary. Holidays (e.g., public holidays) and leaves of absence (e.g., medical or parental) shall comply with local labor laws or applicable collective agreements.

Compensation and benefits

Supplier shall provide all employees (permanent, temporary, apprentices and contract workers) with fair compensation (wages /salaries) meeting or exceeding local legal and industry minimum standards, for regular as well as overtime work. Supplier shall also provide employees with benefits to reward contributions, skills and behavior considered vital to success. Compensation and benefits shall be aligned with relevant company policies.

Fair treatment

Supplier shall ensure that employees at its facilities are treated with respect and dignity, equal opportunity and are safe from abuse, harassment or bullying of any kind (e.g., physical, verbal, mental, sexual, racial, cultural, age or disability related). Supplier shall ensure company rules / guidelines are communicated to employees. Supplier shall ensure that disciplinary procedures prohibit physical punishment and do not support financial deductions, or the threat thereof.

Performance management

Supplier should have a system to manage employee performance. Supplier should ensure individual objectives are derived from company strategy and policies. Supplier should ensure performance is evaluated fairly and objectively, against defined criteria and on a periodic basis, to identify ways to improve performance.

Communication and coordination

Supplier shall ensure that information relevant to employees (about, e.g., business activities, changes and results) is communicated across the organization. Supplier shall ensure employees can share such information fast enough to be able to align their activities efficiently. Supplier shall respect the right of all employees to form and join trade unions of their choice and to bargain collectively, and in cases this is restricted by law, facilitate parallel means to ensure that individuals or groups are able to raise concerns to the attention of the management.

Employee satisfaction

Supplier should have the means to evaluate and improve employee satisfaction. A company of substantial size (i.e. headcount exceeding 100) should have an employee satisfaction program based on employee opinion surveys and should take action based on the results of the program.

Feedback and complaint channels

Supplier shall have a system through which employees can give feedback or complain about unethical conduct, unfair treatment or practices, violation of company values, policies and procedures, or improvement ideas and suggestions. Management shall, when appropriate, act upon this feedback and handle it confidentially and anonymously. Management shall ensure that there are no adverse consequences as a result of giving feedback.


There are many priorities within a business, but in a marketing orientated company like Nokia, many of the following principles will be high on the agenda:

1. Customer satisfaction: Market research must be used to find out whether customers' expectations are being met by current products or services.

2. Customer perception: this is based on the images consumers have of the organization and its products, this can be based on; value for money, product quality, fashion and product reliability.

3. Customer needs and expectations: This is anticipating future trends and forecasting for future sales. This is vital to any
organization if they wish to keep their entire current market share and develop more.

4. Generating income or profit: This principle clearly states that the need of the organization is to be profitable enough to
generate income for growth and to satisfy stakeholders in the business. Although satisfying the customer is a big part of a
companies plans they also need to take into account their own needs, such as:

5. Making satisfactory progress: Organizations need to make sure that their product is developing along with the market, if a product is developing well, then income should increase, if not then the marketing strategy should be revised.

6. Be aware of the environment: An organization should always know what is happening within their designated market, if it is changing, saturation, technological advances, slowing down or rapidly growing, being up to date on this is essential for companies to survive.

There are also certain external factors that a company should be very aware of, such as P.E.S.T factors (political, environmental, social and technological) and also S.W.O.T (strength, weakness, opportunity and threat). A business must take into account all these constraints when designing and introducing a marketing strategy.


SWOT analysis is also another way of deciding on a successful marketing scheme, we must look at strength, weakness, opportunity and threat.

Strength (internal factors)- Is looking at the companies current market share and researching how recognised Nokia is amongst consumers in the target market. Nokia is currently one of the most popular Mobile communications companies in the industry, generating over 52,000 sales in 1997, which was a 34% increase from 1996. Nokia's net sales for the October-December period in 1997 came to a total of FIM 15 857 million (FIM 12 669 million in 1996).

Weakness (internal factors)-

This is basically looking at where the product is failing or not doing as well as it should in the market. Nokia's problems are that:

1. They are currently aiming their products at a saturated market segment.

2. Their wage costs are forever rising.

3. Higher import charges have now been put into place.

4. There are some quite high supply chain costs that Nokia are currently paying.

Opportunity (external factors)-

This is the area in which Nokia can make more profit, or gain more market share. There are 2 ways in which Nokia can currently do this:

1. Improve the technology that they are using to make their phones and use in their products, for example, camera phones and advanced picture messaging would attract new consumers to purchase phones under the Nokia brand name.

2. Using innovation to re-invent their products, change and develop within the market to offer something none of the competitors have. Also the fact that phone call charges are being forced to fall should prove to be an opportunity for Nokia to sell to the people, who previously may have not purchased a phone because of higher call charges.

Threat (external factors)-

This is looking mainly at the competition that are taking away Nokia's current market share and also government legislations (the total costs of 3G licensing in Europe is 110 billion euros) that could hinder Nokia's development as a company.


In December 2006 SOMO, a research group, issued a report making a series of allegations claiming that poor working conditions existed in factories producing components for mobile phone makers including Nokia.Nokia co-operated with SOMO, sharing information and answering a series of queries in relation to their report. Unfortunately the final report still included significant errors in its claims about Nokia. Many of the factories said to be supplying Nokia were not, and its findings about workin practices in Nokia's factories in India were inaccurate. Nokia finds it unfortunate that a report on such an important area contained so many errors. The report also made a number of references to two factories that Nokia does work with -Namiki and LTEC (both in Thailand). We were concerned to see these findings and launched investigations into both cases. Given the seriousness of some of the claims included in the report, and the concerns these have raised, we are making our findings public. This is an important area for Nokia, its suppliers, and the mobile industry. We believe that in order to continuously develop standards across the industry it is beneficial to share this type of information to stimulate an accurate and informed discussion on where improvements are needed. The investigations found that the large majority of the findings were inaccurate, including the claim that workers were being “poisoned” in Nokia factories. We have identified a small number of areas for improvement. We will be visiting the factories again to check these are made.


A Nokia team undertook the investigation. This included visiting the factory, site inspections,documentation reviews and a series of one to one interviews with employees, managers and the owner of the factory. We investigated each and all of the claims made within the SOMO report.

Lead soldering

No evidence was found to support the very serious claim, made in the SOMO press release accompanying the report, that employees were being “poisoned” in Nokia factories. SOMO claimed that employees working on parts for Nokia phones - mobile motors - are using lead soldering in the production process with damaging health effects. It also claimed no protective equipment or clothing is provided.

In reality, lead soldering is not used in any part of the production process for Nokia goods at Namiki. Our visit to the plant confirmed that this is the case. The use of lead soldering in the production of any mobile handsets was banned by a European Directives (RoHS) in July 2006, and Nokia applies this standard globally to all of its suppliers. Namiki became compliant in 2005, a year ahead of the legislation. A thorough inspection of the production line dedicated for Nokia products and series of interviews with employees found that the air quality is regularly monitored and is within required standards. These also found that masks, gloves, finger cots, and working clothes are provided by Namiki. Staff are not required to pay for these.

Health & Safety

The report suggested that the employers restricted employee's ability to go to the toilet. We found no evidence of this but have required Namiki to make it clearer to employees that there are no restrictions in this area to ensure this is understood.


A number of claims were also made relating to discrimination and limits on freedom of association. The facts are that a union does not exist at Namiki but there is a workers' welfare and also a health & safety committee. Nokia has asked Namiki to ensure that these committees focus on relevant topics and that all employees are aware of them and are encouraged toparticipate.

Areas for improvement

In relation to the other claims in the report, two areas have been identified where Nokia has asked Namiki to make improvements

- At the end of 2004 and beginning of 2005 a small group of employees were asked to stay home for varying periods of time due to a decline in customer orders. It was found that pregnant workers who stayed at home received less compensation than those who were not pregnant. Although there were differences in the situation, the action taken was discriminatory and in Nokia's view unacceptable. We asked Namiki to correct this, by establishing a clear nondiscrimination policy in all their HR activities including recruitment, promotion and exit procedures.

- The report claimed that employees were being forced to work overtime. Nokia's investigation found that in practice employees do and can decline over time, and that Namiki's working hours were in line with local legal requirements. However the company written rules state that staff not accepting overtime may be disciplined. Nokia's view is that overtime must be voluntary and requested that the company change its rules accordingly which it has now done.


LTEC is not a direct supplier to Nokia, it provides components to Fujikura who in turn supplies parts to Nokia. Nokia has clear codes of conducts and standards for its direct suppliers and requires them in turn to apply the same high standards to their own suppliers. This is the most effective way to drive continuous improvements and develop standards all the way through the supply chain. Fujikura investigated the SOMO claims against LTEC via their own internal audit, including site visits and a survey of all of the 5,904 staff working at the site. The survey had a response rate of 92%. They also commissioned an independent third party to investigate the claims. These investigations have shown that the majority of SOMO's claims were inaccurate.

Health checks and sick leave

The report claimed that workers pass yearly health checks even if they are in poor health. The investigations found no evidence of this. Checks are conducted by highly qualified health professionals. Employees with poor results are recommended for hospital checks and are not forced to work or their employment terminated. It also suggested that sick leave is dependent on the preferences of supervisors. The

investigation found that staff must report sick leave to supervisors but that they do not need to ask for permission. However the staff survey revealed that a small number of staff, less than a fifth, felt hesitant to ask for sick leave. As a result LTEC are using an external expert to train supervisors in this area, ensuring they are sensitive to staffs concerns and take a consistent approach.

Toilet facilities

It was claimed there were not enough toilets for staff, causing health problems. Theinvestigations confirmed that the number of toilets at the factory complies with local law. Congestion can occur at peak times and LTEC have addressed this by arranging different break times.


The report raised concerns that there is little difference in salary levels between experienced and new staff, and claimed this is discriminatory. LTEC pay staff on the basis of the task each job involves, and whether the work requires special skills or expertise. As such staff doing the same roles will have very similar wages.

Security searches

Concerns were raised regarding body searching of female staff and it was claimed that these were not conducted on male employees. The investigations found that female security guards do regularly conduct bag and purse searches as a security measure. If necessary they occasionally conduct a body search but this is not targeted only at female employees and is only done if there is a security risk. The body searches are conducted by a guard of the same gender.

Code of conduct

It was stated that LTEC employees were not aware of Nokia's code of conduct. This is to be expected as it is Fuijikura's supplier requirements that LTEC must comply with given that it is a direct supplier. It is LTEC's own internal code of conduct that its employees should be aware of. This code is distributed to all staff.

Working hours

The report claimed that staff are forced to work 12 hour days and seven days a week. Normal working hours at LTEC are 8 hours a day, and staff are offered overtime of an additional 2.5 hours a day. The company gets the consent of employees who wish to take overtime in line with local labour laws. Overtime is often popular amongst employees and highly subscribed. LTEC provides one holiday a week (Sunday) and occasional special holidays on Saturdays, going beyond the requirements of one day a week holiday. NOKIA provides 14 traditional holidays for staff - one more than the minimum legal requirements - and gives staff annual leave days of 6, 8 or 12 days depending on years of service compared to the 6 days legal minimum. The investigation did find that on a very small number of occasions, when NOKIA had unusually high orders, that it had asked employees to work seven days a week. Fujikura has reiterated to NOKIA that in these cases overtime must remain voluntary and meet leg requirements.

Areas for improvement

SOMO correctly reported that NOKIA does not have a union. It also claimed that workers are forbidden from forming groups. This is not the case, NOKIA has a welfare committee made up of employee and management representatives.

Established in 1998, the committee has made several improvements such as increases in food and fuel allowances. However it was felt that improvements could be made in this area, particularly as the committee has become inactive due to lack of participation by employees and management . New election for members is now taking place and NOKIA management is taking a more active role.


Nokia introduces microfinance schemes to sell Mobile Hands

Nokia India Wednesday said it will roll out microfinancing schemes in 12 states in an effort to push its mobile phone penetration in the country.
“India is second in terms of the company's revenue. We have tied up with a host of stakeholders to deliver this service to our customers,” said Olli-Pekka Kallasvuo, president and chief executive of Nokia Corp. “We aim to remove the affordability barrier,” Kallasvuo told reporters here. Nokia initially offered microfinancing scheme on a pilot basis in Andhra Pradesh and Karnataka. Under this project, the company is offering an easy payment scheme as low as Rs.100 per week over a period of time. Nokia is also planning to venture into netbooks, which are small, light and inexpensive laptop computers suited for general computing, accessing web-based applications and rich internet applications. “We are in discussions with Intel for a product in the convergence market,” said D. Shivakumar, vice-president and managing director of Nokia India. Nokia, with 190,000 retail outlets across the country, Wednesday also launched an information solution called “Nokia Life Tools” for easy access to news and information relating to agriculture, education and entertainment. “As we introduce Life Tools and microfinancing options across India, we are forging associations with multiple stakeholders to effectively deliver solutions that create opportunities for financial and social well-being for rural consumers,” Shivakumar said. Nokia, which has about 1.1 billion users globally, has its biggest manufacturing facility in Chennai. “We have invested about $250 million in the Chennai unit and have employed 8,000 people,” Kallasvuo said, adding: “We export almost half of our production to 59 countries.

Nokia's North America problem

To stay No. 1 in high-end cellphones, the Finnish phonemaker has to take on Apple and RIM on their home turf. So far it hasn't got a foothold.

Apple's iPhone may have set the standard for a new generation of smartphones, but plenty of would-be competitors abound. Here are four top picks for the PDA-obsessed.

(Fortune Magazine) -- A few hours before the global launch of Nokia's latest high-end phone, the company gave a sneak peek at the gadget to a dozen bloggers and journalists gathered at its swank Midtown Manhattan concept store. With an elegant touchscreen that slid open to reveal a full keyboard, the device evoked lust in even the iPhone disciples present. So when can we get it in the U.S.? The company's answer: "Globally, sometime in the first half of 2009." The U.S. launch will come after that. No carrier has been announced. In other words, just about never. There's no disputing Nokia's dominance in the cellphone market. With sales of $70 billion, it holds 40% of the market globally. Interbrand ranked it the world's fifth-most-valuable brand, behind the likes of Coca-Cola and IBM. In parts of rural India, Nokia (NOK) is to "phone" what Kleenex is to "tissue": a synonym.

But in North America, despite a marketing blitz that includes two new American concept stores, a series of popular Nokia music venues, and a flashy billboard campaign peppering New York City's subways, Nokia's market share has slid to just 8% from 15% two years ago, according to research outfit IDC. That is a huge problem for Nokia because North America is quickly becoming the world's fastest-growing market for so-called smartphones, those high-end devices that surf the web. Any cellphone company that hopes for world domination must lead the smartphone market too. Nokia CEO Olli-Pekka Kallasvuo calls North America "extremely significant," explaining that devices designed in the U.S. and Canada - namely Apple's (AAPL, Fortune 500) iPhone and RIM's (RIMM) BlackBerry - influence products in other countries. The iPhone single-handedly made people more comfortable browsing the web from their palms, and it has spawned a wave of innovation among software developers in Silicon Valley.

Key missteps

Nokia has reinvented itself many times over, but it has never quite found a way to transform itself into a phonemaker relevant to Americans. Founded as a paper mill during the Industrial Revolution, Nokia became a rubber maker, a cable business, a radio company, and finally a leading cellphone manufacturer.

It briefly gained a foothold in the U.S. in the late 1990s, when AT&T sold Nokia phones with its groundbreaking flat-rate wireless calling plan. But Nokia insisted on a one-size-fits-all model for its products. For example, it missed out when North American customers started to prefer flip phones over Nokia's signature candy-bar-style phones.

Nokia also refused to cater to American phone companies' whims. In Europe and Asia, consumers usually buy phones and telephone service separately, so Nokia needs to please only the end user. In the U.S., where phones and service are sold together, carriers want control over the way the phones look and perform. (Another challenge for Nokia is that the dominant wireless standard in North America is CDMA; most Nokia phones are designed to operate on the global standard, GSM.)

A few years ago Nokia got serious about North America. It installed its chief financial officer in the U.S. It opened new offices in Atlanta to be close to AT&T Mobility; last year it did likewise in Parsippany, N.J., to be near Verizon Wireless. And the company put several hundred product developers in its San Diego design center to work in collaboration with AT&T (T, Fortune 500) and Verizon Wireless on some new products.

Those efforts have paid off for straight-up cellphones. The first phone jointly designed with AT&T, a thin clamshell called the 6555 that looks an awful lot like Motorola's (MOT, Fortune 500) once-hot RAZR, appeared last May. At AT&T's behest, Nokia produced the phone in several different colors and changed the positions of some of the buttons. In December, Nokia launched its third Verizon (VZ, Fortune 500) phone, an elegant midrange gadget that Verizon named Mirage. T-Mobile sells eight different Nokia handsets. None of them are smartphones.

The problem is not the product. The n97 might not be ready for sale, but Nokia's e71, which looks like a sleeker version of the BlackBerry Curve, has won design awards and dominates many European markets. And it has several phones in its n-series of multimedia devices that boast the best cameras and videocams in the biz. North American president Mark Louison says U.S. carriers will soon support the phones. But ask the phone companies, and they say they have no plans to roll out Nokia smartphones anytime soon.

By lagging in smartphones Nokia isn't just missing out on sales; it may also be losing the attention of software developers that make cool games and applications for mobile devices, a growing number of which operate in the U.S.

Nokia is reinventing itself yet again as an Internet company, a sort of for your phone. It is trying to woo application developers to its mobile platform through offices in Silicon Valley and Boston. You'd think it would be tantalizing to write software for the world's largest mobile platform. But ask developers worldwide to show you their favorite mobile apps, and they'll probably pull out their iPhones.

Role Of Govt legislation in Nokia company

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Nokia wins company right to monitor employee emails

Numerous unnamed civil servants, politicians and representatives of labour market organisations have told the Finnish newspaper ‘Helsingin Sanomat' that Finland-headquartered mobile phone maker Nokia had threatened to leave Finland if parliament failed to pass a piece of legislation known as the ‘Lex Nokia' bill. Lex Nokia would grant employers access to employees' email metadata if they suspected a breach of confidentiality clauses.

Rumours of Nokia's threat to leave Finland

The Finnish newspaper Helsingin Sanomat has quoted dozens of unnamed civil servants, politicians and representatives of labour market organisations as saying that Finland-headquartered mobile phone maker Nokia had threatened to leave Finland if parliament failed to pass a piece of legislation known as the ‘Lex Nokia' bill.

The proposed law, which aims to prevent corporate espionage by employees, would allow employers to monitor employees' use of company email traffic. While the content of employees' messages would remain confidential, the employer would be allowed to see who the employee has corresponded with through the company's email system, and what kind of attachment material is linked to each message.

‘Nokia applied very strong pressure in order to have the government proposal approved unanimously already in the drafting stage,' the paper quoted one civil servant as saying. The unnamed source added: ‘The message conveyed through the Confederation of Finnish Industry was loud and clear: if the law is not passed, Nokia will leave Finland.'

Nokia and government deny company threat to leave

Nokia's Chief Executive Officer (CEO), Olli-Pekka Kallasvuo, stated that he has been amazed at recent debate over a bill that would allow employers to extract contact information from employees' email. In an interview with the economic journal Talouselämä, Mr Kallasvuo sharply denied claims that Nokia would have threatened to leave Finland if the law on data protection of electronic communications is not changed. The proposed law has been dubbed Lex Nokia. ‘We have been placed in a completely unreasonable situation, in which one law has been named after us. We have not given it the name,' CEO Kallasvuo stated. He dismissed claims of a threat by Nokia to leave Finland as absurd, arguing ‘there is no sense to it'.

Defending Lex Nokia, Mr Vanhanen added that Finns should not be ‘benign fools' in the face of industrial espionage as the Finnish public's affluence hinges to an increasing extent on technology and innovation.

Concern over employee privacy

Whereas legal experts have noted that the bill violates the Finnish constitution, the parliament's Transport and Communications Committee supported the bill in December 2008. The committee highlighted that the viewing of email metadata would be the last resort for an employer in establishing the source of a leak of confidential company information.

Deputy Chief of the National Bureau of Investigation Tero Kurenmaa, stated that the government's proposal for a new law on data protection in electronic communications, the so-called Lex Nokia, contains numerous problems. Mr Kurenmaa indicated that the bill would actually give companies more extensive authority than the police have to carry out checks.

Joining the criticism was Member of Parliament Heidi Hautala of the Green League, who chairs the Legal Affairs Committee of the Finnish parliament. Ms Hautala argued that the preparation of the bill should be shelved.

Outcome of parliament vote

The Finnish parliament voted on the bill in February 2009 and the controversial reforms to the data protection law, the so-called Lex Nokia bill, were passed.

Nokia Announces New Simplified Company Structure

Espoo, Finland - Nokia (NYSE:NOK) on Tuesday announced a new "simplified company structure" that will see its devices and services businesses divided into three units, focused on Mobile Solutions, Mobile Phones and Markets. Nokia said the plan "aims to accelerate product innovation and software execution in line with the company's goals of integrating content, applications and services into its mobile computer, smartphone and mobile phone portfolio."The Mobile Solutions group will focus on Nokia's high-end mobile computer and smartphone portfolio, while the Mobile Phones unit will handle the rest of its handsets, and Markets will be responsible for sales and marketing duties.

"Nokia's new organizational structure is designed to speed up execution and accelerate innovation, both short-term and longer-term," said Nokia CEO Olli-Pekka Kallasvuo.


Nokia accused of labour rights violations

A group of shop stewards at the Finnish-based multinational Nokia accused the company of disregarding workers' rights. They alleged that Nokia has adopted such obstructive practices that it has been impossible for them to perform their role as trade union representatives. Moreover, they argued that the position of redundant workers at the company is too vulnerable. Nokia has rejected much of the criticism but has promised to improve the position of shop stewards.

Nokia, the Finnish-based mobile telephones multinational, has a reputation for being a company that follows ethical standards in its labour relations. What the company refers to as the 'The Nokia Way' states that it involves taking workers' needs and ideas into account as fully as possible. This positive image has contributed to the fact that Nokia is one of the most popular employers among job applicants in Finland. Internationally, as well, Nokia has a good image and it has expressed its commitment to the core International Labour Organisation (ILO) labour standards in its company code of conduct. Monitoring of compliance is limited but at least one independent study, in which a plant in Brazil was surveyed, confirmed that Nokia is committed to these standards. Considering the company's positive image, it came as a surprise for many in January 2005 when Nokia's labour practices in Finland were strongly criticised.

Criticism over position of shop stewards

The investigative TV programme MOT ran a special on Nokia in January 2005. The programme included interviews with Ari Kiiras, the chief lawyer at the Federation of Professional and Managerial Staff (Ylempien Toimihenkilöiden Neuvottelujärjestö, YTN), and five YTN shop stewards employed by Nokia in Finland. The interviewees stated that shop stewards' rights are not respected at the company. Far too little time is allowed for trade union representatives' duties, according to the shop stewards. They stated that they can spend only 20%-30% of their working time performing the functions of shop stewards, while they have very tight work schedules and many employees to represent. One of the interviewees said that he represents about 1,700 employees but, nevertheless, had been given a written warning for spending too much time doing shop steward work. YTN is planning to sue Nokia for infringing his rights as a shop steward.

Nokia currently employs about 20,000 white-collar professionals in Finland who are represented by 25 shop stewards, the ratio of employees to shop stewards thus being about 1,000 to one. The collective agreement for Nokia's white-collar professional metalworkers states that the amount of time allowed for shop stewards' tasks should be 'adequate' for the completion of those functions. In comparison, Nokia's blue-collar metalworking sector collective agreement guarantees all shop stewards who represent more than 500 workers exemption from other work duties.

The interviewed shop stewards also alleged that lack of information is a serious problem at Nokia. They said they are not given even basic information concerning personnel and pay conditions, despite trying to obtain access to such information for some time. This makes monitoring the compliance of Nokia with various regulations impossible. Ari Kiiras of YTN agrees that information given to shop stewards is not adequate at Nokia. He is also aware of the lack of time said to be provided for union representatives' duties. Overall, he is of the opinion that the alleged bad treatment of shop stewards is systematic on the part of Nokia. YTN has contacted the company several times trying to improve the situation but Nokia has not been cooperative, he claimed.

Redundant workers' rights questioned

In addition to their own situation, the YTN shop stewards find the position of redundant workers at Nokia particularly problematic. According to the Act on Cooperation within Undertakings, shop stewards are to be given information on all people made redundant due to reasons related to economic or productive changes (FI0311203T). If such information is not given, as the Nokia shop stewards interviewed insist is the case, it is not possible for shop stewards to know whether workers are made redundant on valid grounds or not, or to monitor Nokia's duty to re-employ redundant workers. Under Finnish legislation, firms have the obligation to re-employ workers who lose their jobs in the aforementioned circumstances, within nine months of having made them redundant, if the same or similar job opportunities open up within the company. Three former Nokia employees, who were also interviewed in the MOT programme, believe they have been unlawfully dismissed and have decided to take legal action against the company.

Ari Kiiras of YTN is also of the opinion that Nokia has not always complied with its duty to re-employ redundant workers. Furthermore, he claims that it is standard practice at the company to compel employees to look for new jobs within Nokia themselves, although work should be offered to them by the employer.

Nokia promises improvements

Nine days after the TV programme was broadcast, the management of Nokia met all the company's 25 YTN shop stewards to discuss the union representatives' position at the company. The management promised improvements but no concrete measures were decided upon. Instead it was agreed that three separate working groups, each consisting of shop stewards, managers and members of personnel management, would discuss the matter further and make proposals for change.

In addition to acknowledging the problem and committing itself to improving the situation, Nokia also repudiated much of the criticism laid against it. The chief of Nokia's operational personnel management, Ari Lehtoranta, insisted in an interview that the position of white-collar professionals' union representatives has, on the whole, been good. The basic rule at Nokia has, he says, been that they can use 20%-50% of their working time for these tasks, and upward flexibility has been granted on a case-by-case basis. Sometimes this flexibility may not have been granted by organisational superiors or personnel management when this would have been due, Mr Lehtoranta acknowledges. However, he dismisses all allegations that violations of labour rights have been systematic and points out that Nokia has only been found guilty of one minor offence in its personnel policy in Finland in recent years. This, together with the fact that employees have expressed in surveys their contentment with working at the company, shows that Nokia has taken care of its personnel, he maintains.


Nokia has worked hard to create a public image of itself as a company with social responsibility and it has done this with success. Maintaining a positive image is of paramount importance to a company, since it only takes one scandal to ruin it for a long time. It therefore seems unlikely that Nokia would implement conscious policies that test the limits of labour legislation and collective agreements at its core units in Finland. It is more probable that attention to labour rights has lagged behind in the list of priorities of the rapidly growing company. Arguably incompetent individual managers who have disregarded regulations or have not been familiar with them may also be to blame.

Nokia threatens government after being caught doing 'illegal' snooping

In April 2005 the Finnish National Bureau of Investigation (NBI) received a criminal complaint - a suspicion that corporate secrets had been leaked to the Chinese Huawei company via e-mail. The complaint was made by Nokia, the world's largest manufacturer of mobile telephones.

A Nokia employee had noticed at a telecommunications fair in Cannes in February 2005 that the power unit made by its competitor Huawei had characteristics that bore an uncanny resemblance to a product that Nokia was putting on public display for the first time at the same fair. Nokia needed evidence of a leak, so it began to dig through the identification information of its employee e-mail.Legal experts say that the company should not have done that; Nokia had technically violated its employees' fundamental right to confidential communications. But the company felt that it was the law, and not Nokia that had got it wrong. The issue was so important for Nokia that it took out its most severe weapon. It threatened that it would leave Finland if the law was not changed, taking with it tax revenues worth EUR 1.3 billion and 16,000 jobs. This put politicians in high gear, and that is how the Lex Nokia was started.

Parliament will decide in a couple of weeks on a proposed amendment to the law on data protection in communications. The bill is known better by the name Lex Nokia. Civic groups opposed to the measure have called it a snooping law. Lex Nokia is an appropriate name, as the bill is a master stroke of lobbying. Nokia has made sure that important figures from employers' organisations to labour unions, from civil servants to legislators, have been made to understand in good time how important the bill is for Finland's largest corporation.

The proposed legislation also reveals Nokia's exceptional influence in Finland. The strength of the company has made many officials turn a blind eye to the problems contained in the bill. But what does Nokia actually want with the proposed change?The bill would give employers the right to check on information contained in messages sent and received by employees in their company e-mail. The information includes the sender or receiver of the message, the size of the message, and the time that it was sent, and the type of attachment that they contain. Automated monitoring would not require suspicion of any wrongdoing, and the employer would not be required to ask anyone for permission for the surveillance.

In addition to employers, the proposed law would give snooping rights to offices, libraries, universities, schools, and even apartment buildings that have communication networks of their own. For instance, a house manager would be allowed to monitor Internet activities of residents if there is a suspicion that the house network is being used in violation of house rules. The bill is contradictory in that the information that is being sought is not enough to indicate if the message itself, which the employer would not have access to, contains any company secrets. Nevertheless, supporters of the bill believe that with increased supervision, employees will be more cautious about what they undertake. Because of Nokia's influential status, none of them want to discuss the issue under their own name.

"Nokia put very strong pressure to bear to win unanimous approval to the proposal already in the preparatory stages. The message that came through the Confederation of Finnish Industry (EK) was quite clear: if the bill is not passed into law, Nokia will leave Finland", said one civil servant."It was a take-it-or-leave-it situation. Nokia organised big events with leaders of the central organisations present", said one influential labour market figure.Huawei case looms in the background. It was then, at the latest, that Nokia became exasperated that it cannot monitor the e-mail traffic of its employees as closely as it would like.Those who were in key positions during the drafting of the legislation say that Nokia succeeded in convincing key civil servants of the necessity of such a law. Nokia claimed to have lost large sums of money through information leaks, and nobody questioned the veracity of those claims. Civil servants did not see any constitutional problems in the matter. "When a matter involves a legislative proposal which affects fundamental rights, those preparing the legislation should be especially sharp and critical, if people other than officials try to affect the content of the law", says Mikael Hidén, Professor Emeritus of Constitutional Law at the University of Helsinki. In the autumn of 2005 Finland got a new Minister of Transport and Communications. Luhtanen was replaced by Susanna Huovinen (SDP). Ministry civil servants presented the bill to Huovinen as a "technical change". One ministry employee felt that the problems of the bill and the disputes within the working group were kept hidden from Huovinen. However, the fresh minister had received word that the proposed law would violate the constitution. Huovinen refused to bring the bill before the government. In the summer of 2006 she asked Chancellor of Justice Paavo Nikula for a statement. Nikula sharply denounced the proposal. In the view of the Chancellor of Justice, fundamental rights should have been weighed with more precision and from more points of view than was done in the proposal.

This was a great setback to the business community, the ministry, and to Nokia. The plan to pass the bill into law quickly crumbled.The civil servants of the Ministry of Transport and Communications started working on a new set of tactics.In Nokia, the man responsible for turning the heads of civil servants and labour market organisations was Nokia's Executive Vice President for Corporate Relations and Responsibility Veli Sundbäck, according to those who were the targets of the lobbying. Sundbäck, who retired at the beginning of this year, is a former high-ranking civil servant of the Ministry for Foreign Affairs, who took part in the negotiations in Brussels on Finnish EU membership in the early 1990s.

Sundbäck could not be reached for a comment, and Nokia not want to comment on the bill to Helsingin Sanomat at all.Those behind the bill noticed in 2006 that Huovinen and Milister of Labour Tarja Filatov (SDP) were not supporting the proposed legislation. More pressure was put on the labour market organisations. Those promoting the bill thought that the Social Democrats might be persuaded to back it if the strong labour unions were first convinced of the need for such legislation.

Now the argument that was used was that the bill had extensive support in society. This was, in fact, the case, but what was not mentioned was that labour market organisations cannot take issue with citizens' fundamental rights.While the lobbying and drafting of the bill was going on, Nokia continued to spy on the e-mails of its employees.In January of 2005, before the Huawei case, Nokia had become the target of an investigation. The reason was that Nokia had gone through the sender and receiver data of its employees at the beginning of the decade. At that time Nokia had suspected that Microcel, an Oulu-based subcontractor of the Swedish Ericsson, had received information by e-mail about the security features of Nokia's new mobile phones.


Nokia is satisfied with the rigour of the investigations into the Namiki and LTEC factories and will ensure that the recommendations that have come from these are implemented. Overall, this is an extremely complex area, with long supply chains in many cases. However it is important that these discussions are as informed and accurate as possible to make sure we focus our efforts where improvements are most needed. Nokia takes a pro-active approach to managing ethics and standards in the supply chain. We take this responsibility very seriously. Our suppliers must comply with over 80 different requirements on areas like working hours, health & safety, and environmental management, in addition to requirements on areas including quality, security, and product development. For example, NOKIA recently updated and extended the list of standards our suppliers have to comply with, including areas such as ensuring they have a clear code of conduct that is effectively communicate this to staff, and have ways for staff to feedback or make complaints. Given that there are thousands of different companies in this global industry, achieving sustainable results makes it essential that each tier of the supply chain influences each other. Each has to take responsibility for conducting its own business in a responsible manner and for managing and checking its own suppliers are doing the same. The starting point for this is that local labour and environmental laws are updated and effectively enforced by governments and regulators. Nokia is involved in a number of industry wide groups that have regular dialogue with governments on these issues.


§ Company should focused more on employee`s learning skills rather than only stressed more on results & outcomes.

§ Company should also provide some benefits like fringe benefits in order to motivate them and to retain them.

§ Company should also provide some moral support and timely recognition of work to their employees.

§ Company should also emphasis on job enlargement and enrichment in order to give them a feeling of superiority.

§ A mixture Flexi timings ,monetary and non monetary benefits , compensation packages, should be timely given.

§ Employs stock option plan should also provided to retain them.