What we can learn from Nokia’s downfall

Nokia was the world’s successful top cellular phone maker in the early 2000s. It dominated the smartphone market, with a market share of around 70%. Nokia faced a rapid shrink of its market share in 2007, when Apple entered the market with the iPhone. (Bouwman, et al. 2014).

Olli-Pekka Kallasvuo former Chairman, CEO and President of Nokia, led the company from 2006 to 2010. His focus was on control as a result of the logistic crisis which he thought would help to optimize production. His management style was led d by numbers to control the culture and results. (Bouwman, et al. 2014). Also known as the bureaucratic leadership style: slow decision making with many layers of authority. (Iqbal, et al. 2015).

Nokia’s decline in the market for mobile technology was a failed attempt of a series of implementation problems. They misjudged the market. Which led to Nokia having difficulty attracting the right partners, and ultimately not responding quickly enough to new technological developments to stay ahead of the competition. (Ciesielska, 2018). Referred to as Kotter’s model of change leadership, where Nokia got stuck to increasing urgency.

Looking to Lewins to change leadership, Olli-Pekka Kallasvuo worked on getting the organisation ready for phase one “unfreeze”.  Due to all the above rapid developments and technological changes, Olli-Pekka Kallasvuo did not show a visionary leadership style, did not focus on the key pillars to adopt change, did not put a clear strategy in place, did not challenge the process and did not give employees the power to act as one team. The enormous bureaucracy led to no action and no decisions from the management. This created destructive internal competition and finally, Nokia did not see Apple as a full-fledged competition. (Bouwman, et al. 2014). Finally, Microsoft acquired Nokia and sold it at loss.


What do you believe could have been done differently?



Bouwman, H., Carlsson, C., Carlsson, J., Nikou, S., Sell, A. and Walden, P., (2014). How Nokia failed to nail the Smartphone market. Available at: https://www.econstor.eu/bitstream/10419/101414/1/794346243.pdf [Accessed 20 May 2022].

Ciesielska, M., (2018). Nokia on the slope: The failure of a hybrid open/closed source model. The International Journal of Entrepreneurship and Innovation. Available at: https://journals.sagepub.com/doi/abs/10.1177/1465750317742843 [Accessed 20 May 2022].

Iqbal, N., Anwar, S. and Haider, N., (2015). Effect of leadership style on employee performance. Arabian Journal of Business and Management Review5(5), pp.1-6.

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