MGMT20144 Assessment1

Business Case Analysis of Nokia and Deutsche Telekom

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Table of Contents
1. Introduction..............................................................................................................................2

2. Synopsis of Case Company......................................................................................................2

3. Comparing the Business and Governance Structures of Companies.......................................3

4. Environmental Factors Impacting Business Performance and Decision-Making....................4

5. Top Three Risks Facing By the Companies and Their Impact on Decision-Making..............6

6. Three Suggestions to Improve Business Practices...................................................................7

7. Conclusion................................................................................................................................8

References........................................................................................................................................9
 1. Introduction

Business case analysis is one of the important aspects in comparison to two companies in terms

of business performance. It presents an opportunity for identification of differences and

similarities by performing the side by side comparison of their business practices. It provides

guidelines on actions that need to be taken to improve the business operations [ CITATION Ste172 \l

1033 ]. The present essay is to perform the business case analysis on the two companies including

Nokia a Finland based telecommunication company and Deutsche Telekom, Germany based

Telecom Company. This report is limited to perform business case analysis in terms of business

and governance structures, environmental factors impacting business performance and decision-

making, and risks facing by the companies.

2. Synopsis of Case Company

Nokia aimed at the creation of technology required to associate with the world. It focused on

delivering licensing, software, network equipment, and services to customers. It offers services

to public and private businesses and network service providers [ CITATION Nok19 \l 1033 ] . It is the

leading firm in adopting 5G networks and providing telecom services effectively. Nokia is

planned to compare with Deutsche Telekom Company operating in the same industry. It provides

mobile communication, fixed networks, and information communication and technology services

to customers. It has more than 28 million fixed lines, customers 178 million, and broadband lines

20 million[ CITATION Deu19 \l 1033 ].

3. Comparing the Business and Governance Structures of Companies

The corporate governance at Nokia follows the Finnish regulations and laws. Shareholders, the

board of directors, internal audit, external audit, and CEO and president. The board of directors

is engaged in the management of Nokia operations. They have four committees including the
personnel committee, audit committee, technology committee, and corporate governance and

nomination committee. Nokia tried to reduce the conflicts among foreign corporate governance

standards and Finland's governance standards. Supervision is placed on the internal

communication associated with training and trading restrictions. For Deutsche Telekom, Group

compliance management played an important role in the establishment of the structure for

corporate governance. It is in accordance with the code of German corporate governance. The

supervisory board and board of management are engaged in the improvement of corporate

governance. It aligns with the national provisions, legal requirements, and international standards

to improve governance. Governance is allocated to the senior management to consideration of

industry-specific and company-specific issues.

A new business structure is introduced with the introduction of global new services. The

business group of Nokia has mainly four groups including mobile phones, enterprise solutions,

multimedia, and networks. It includes technology platforms and market and customer operations.

The structure of the business is effectively allowing Nokia to improve communication among the

different functional departments. The technology structure is shown as mentioned below.

As Nokia is following the matrix organizational structure, it is unable to speed up the process of

development of new technologies[ CITATION Lam19 \l 1033 ].

Deutsche Telekom Group also has four businesses including mobile communications in the

United States, Fixed network and mobile communication in Europe and Germany, group

development, the group shared services and headquarters, and T-systems business. This structure

is considering the development of the strategies [ CITATION Deu191 \l 1033 ] . From the analysis, it

is understood that governance structure and business structure are almost the same for both

companies.

4. Environmental Factors Impacting Business Performance and Decision-Making

Every organization is impacted by internal and external environmental factors in terms of

business performance and decision-making abilities. The external factors include the type of

customers, suppliers, economic factors, changes in the technologies, environmental factors,

cultural trends, legal and political factors, industry regulations, and competition [ CITATION

Dra14 \l 1033 ]. The internal factors include the size of the business, abilities to technological

innovation, internal skills and expertise, organizational structure, core business values, and

operation’s style.

Environmental factors affecting Nokia: Internal factors affecting the Nokia business include

abilities of staff in creating innovative solutions to develop mobile and offer new telecom

services, code of conduct, organizational structure, internal governance principles, and

availability of technology internally like artificial intelligence are affecting the way of decision-

making to enhance the business performance[ CITATION Gal18 \l 1033 ]. Operations of business in

four segments driving towards the increase in business sustainability. Changes in the market

trends revolutionizing the technology to create more solutions to associate with the world.

Economic factors affecting the include interest rate, level of inflation, costs of production,

stability in the economic system of different countries, stage of the business life cycle, and
quality of the infrastructure in the telecom industry. The technology megatrends affecting

include computing and storage, networking, internet of things, machine and human interaction,

digitization, and augmented intelligence[ CITATION Pat161 \l 1033 ]. When Nokia wants to enter

into a new business, various factors will affect it including laws on the environmental protection,

recycling of waste generated in manufacturing the mobiles, and changes to the climate. Legal

laws including safety and health law, intellectual property, and data protection law.

Environmental factors affecting Deutsche Telekom: Deutsche Telekom is also affected by

many internal and external factors. The internal factors such as the structure of governance and

organization, culture to adopt the latest changes, abilities to manufacture the new products,

support to financial funds, and four Ps of marketing. These are strengthening the performance of

the Telekom business. The external factors affecting include changes in the technologies, macro-

environmental factors, cultural changes, and legal requirements [ CITATION Aja16 \l 1033 ].

Economic environment including the monetary and fiscal policies, consumer spending, foreign

exchange rate, rate of growth, and employee productivity. The attitude of employees towards the

cultural changes, contracts between the society and government, and social norms in the

utilization of the telecom services are affecting. Technology changes such as organizational

readiness towards 5G, technology protection and property rights, digital drive, R and D, and

supply chain empowerment are impacting Telekom. Environmental issues such as concerns of

customers, corporate social responsibility, amount spending on technologies for renewable

energy, and environmental regulations at the national and international levels are affecting

business performance. Employment laws and data protection laws are affecting business

performance.
 5. Top Three Risks Facing By the Companies and Their Impact on Decision-Making

Three risks faced by Nokia and its impact:

Nokia has a threat of risks in various ways. Those include financial and economic conditions that

will have an adverse impact on operations. The intensive competition from the competitors leads

to a negative impact on many factors including the purchasing behavior of consumers, adopting

the new technologies, and impact on communication services. Nokia has a chance to fail in

making investments into superior quality services and products and the adoption of new business

models. Unfavorable treatment in doing business globally due to exchange rates, trade tariffs,

and environmental restrictions[ CITATION Nok18 \l 1033 ] . These are hard to control by the internal

controls and resulting in negative operational performance. Cyber-attacks and unauthorized

accessing of customer data will lead to a loss of reputation in the market. There is a chance to fail

in the attraction and retention of talented people and disruptions in service facilitation and

production. These result in decreasing the abilities of businesses in making decisions for new

ideas.

Three risks faced by Deutsche Telekom and their impact:

The three major risks currently encountering by Deutsche bank includes financial risks,

operational risks, and corporate risks. The financial risks include currency risk, credit risk,

liquidity risk, and interest rate risks, and tax risks. Other financial risks include political

uncertainties in Europe due to Brexit, global trade conflicts, and increased interest rates in the

United States. The operational risks include Germany system and solutions, personnel, risks

associated with IT networks in Europe, the United States, and Germany, the viability of the IT

architecture in the future, data security and privacy, and procurement risks [ CITATION Deu18 \l

1033 ]. The corporate risks include economic risks in Europe and Germany, risks from external
environment and market, innovation risk, integration and business transformation risks,

competitive pressure, and risks due to lack of innovation. These risks will definitely have a

negative impact on decision-making.

6. Three Suggestions to Improve Business Practices

The three suggestions provided for two telecom companies including Nokia and Deutsche

Telekom are described as mentioned below.

 Employee engagement is one of the best practices recommended to improve business

practices. It ensures that a high performing workforce is staying with an

organization[ CITATION Kaz16 \l 1033 ]. It improves business performance by enhancing the

openness of employees in sharing ideas and opinions and facilitates a chance to express their

concerns to leaders and managers. Employee engagement further increases the productivity,

innovation, and performance of bottom level employees

 Benchmarking is an important practice to appraise the business performance, systems,

procedures, and processes. It needs to adopt formal benchmarking and informal

benchmarking. Formal benchmarking associated is with two types including best practice

benchmarking and performance benchmarking[ CITATION Sek10 \l 1033 ]. Informal

benchmarking involves communicating with workers, building professional networks, and

online databases to identify the tools for measuring performance.

 High involvement of management is necessary to make strategic decisions and to improve

every aspect of the business. It needs to align with the organizational goals and integrating a

continuous focus on performance measurement and management to convert the strategies

into measures for managing performance[ CITATION Raj152 \l 1033 ].

These three best practices must be adopted by Nokia and Deutsche to increase business

sustainability in the long-term and to achieve high end financial performance

7. Conclusion

The present report focused on effectively performing business case analysis on Nokia and

Deutsche Telekom in various aspects. Comparison is made in terms of business structure and

governance structure, internal and external factors affecting the business performance and

decision-making abilities, three major risks encountered by Nokia and Deutsche in terms of

financial, operational, and corporate risks in conducting business in different countries, and three

suggestions to improve the business practices are made. It is identified that Nokia and Deutsche

Telekom are identical in three aspects. The suggestions provided to enhance the business

practices must be followed by the two companies.

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