Organisational behaviour, change management and

motivation seen in the case study of Nokia mergers

and acquisitions.
By Isolde Kanikani
22-01-2021

Addressing the individual's relationship to change and motivation can allow us to significantly reduce the
impact of structural organisation-wide change on the individual worker, through this their associated
teams, departments and the organisation as a whole. Applying this to real workforce situations within
Nokia, where poignant situations have arisen resulting in increased change resistance due to not
addressing awareness and desire creation, change fatigue and failure to address the people side of
change.

Introduction
Organisation and the individual
An organisation can be defined as ‘ a group of people who work together in an organized way for a
shared purpose’ (Cambridge dictionary, n.d.) and further ‘an entity formed for the purpose of carrying
on commercial enterprise’ (Britannica, n.d.). ‘Structural changes involve major shifts in the management
hierarchy, team organization, and the responsibilities attributed to different departments, employees, or
teams.’, (Whatfix, 2020). For the purposes of this study the following definitions will be used, ‘an
organisation is a purposeful association of individuals, relating in different size groups, teams and
networks in order to capture the purpose for its existence, ROI (return on investment). Nokia throughout
its life cycle as an organisation has undergone some pretty major shifts in both internal and external
operations. Mergers and acquisitions like Alcatel, and the selling off businesses including Nokian tyres
and Nokia data happen so often they are part of the company’s culture. With Nokia's basic strategy of
buying up profitable organisations and the stopping of or selling off those that are no longer useful,
comes a constantly changing organism where cultures need to be managed (Nguyen et al., 2003)
(Kavanah & Ashkanasy, 2006).

Catering on the individual level is a complex matter, due to the differences of psychology, norms and
values we each hold dear, not to mention patterns built up over time (Railton, 2003) (Ogden & Adler,
1999 (Moorland & Lavine, 1982 (Hollway, 1991). These patterns are often in the search of safety and
ease of getting day to day tasks done, once we feel safe and tasks become a habit we can easily get
complacent with said situations. Once complacent, a burning bridge or excitement factor is needed to
stop this from becoming an organisation-wide phenomenon (Kotter, 1996), after all many colleagues are
fulfilling similar tasks in the same organisational culture and norms. Our brains are predisposed to store
information in ‘object categories’ and regularly performed tasks get logged in different parts of our
brains than the new ones that have yet to create significant pathways (Kelly, 2013). We are not however
complacent to everything when at work, this reference is specific to the goals of the organisation and
regularly repeated tasks. Maslow’s pyramid would suggest our attention goes to other things once the
basic animal needs have been met (Maslow, 2015), shifting up and down the scale depending on what a
situation allows and provides. For example, if one's physiological needs are met and the individual feels
safe and loved, their attention will move toward growing self-esteem. If however the physiological safety
is in danger, the individual's attention then moves to more basic levels in the pyramid. Hertzberg took
this one step further, splitting job related wishes and needs into two types, Satisfyers (motivators) and
dissatisfiers (hygiene factors). Both of these types of hygiene factors are said to be needed to create a
motivated individual (Hertzberg, 1993). When individuals are motivated they enhance their organisation
on any level they participate in. Creating more effective teams, networks and with enough motivated
individuals the income of the organisation as a whole. It’s important to note that an individual can
become motivated by more than a simple monetary pay-off for good deeds done, things like autonomy,
mastery and purpose figure higher on the chart of motivators once a basic income has been established
(Mind tools, n.d.) (Pink, 2009) (Smith et al., 2014, 20). For the purposes of this paper we will use the
following definition of motivation: ‘enthusiasm for doing something’ (Cambridge Dictionary). Motivation
is precarious in changing environments and often linked to feelings of safety or ability to follow one's
own path within the organization's goals.

Change, motivation & ADKAR as a comparison tool

In the case of organisation-wide change, structural change in particular (Ganti, 2020), this usually comes
as a survival response with a burning bridge strategy or pre-empting some other major environmental or
economic development. ‘Nokia has been adapting to the needs of an ever-changing world for over 155
years’, successfully and unsuccessfully as we will explore in this case study (Nokia, n.d.). Since the major
lapse in the early 2000’s in keeping up with customer trends there has been special attention placed on
change management or managing ‘future disruptions’ in its strategy to ‘change how we operate’, so
called in the company briefing of 2011 (Nokia, 2011). Such large scale changes such as acquisitions and
selling of businesses will be felt by each individual in the organisation (Walkme, 2020). Motivation is just
one of the many attributes that can be used to analyze the characteristics and behaviour of employees
and their response to different situational inputs and change. The ADKAR model (Awareness, desire,
knowledge, ability and reinforcement) is a great tool to gage an individual's readiness for change and
indeed ability to feel motivation. Many company’s address change management with training and a
communications plan alone, with this in mind, it’s no wonder that people aren’t motivated and a project
is likely to fail or be less successful than first planned for. Addressing awareness and the creation of
desire on an individual level can mean a change becomes intrinsic across the organisation. ADKAR is a
good gage of a person's motivation and a commonly used tool in the management of change. ADKAR
describes an individual's journey through a change. The ‘D’ for desire is the important step for
motivation, if ‘A’ and ‘D’ aren’t reached (which is common) then the change is very likely to fail.

This study will focus on the period of 2007 - 2020, where significant changes have been felt. Some
history will be added for the purposes of identifying company culture and latent norms that might exist.
These organisation-wide changes potentially shift the focus of an individual's attention and motivation to
lower rungs of Maslow’s pyramid. Keeping in mind we are not all made equally, we will experience this
transition differently and to different degrees. One of the questions I would like to answer in this case
study is ’‘How can known change theory and management help organisations like Nokia, bring about
organisation-wide structural changes, while taking their individual employees with them?’. Furthermore,
‘Can effective change management techniques and theories like ADKAR help in decreasing an individual’s
dip in motivation? We will look at a number of specific situations and draw on change and motivation
theories to answer these two questions.

Analysis

Nokia, an organisation in constant transition (History of Nokia as an organisation:)

In 1865, Fredrik Idestam set up a wood pulp and paper mill in Tampere, southern Finland. Setting up a
second mill in 1868 in Nokia, that would become the namesake of this now getting back on its feet
organisation. Over the years Nokia expanded into a rubber works, electricity, cable works and phone
producer (Bahalodiya & Sagotia, 2018) (The Guardian, 2013) (Barokova & Jergosova, 2016). The
organisation in this time was heavily shaped by the fact that Nokia, then three individually named
organisations couldn’t combine due to Finland being part of the Russian empire and being ruled by a
mixture of russian and swedish law (Steinbock, 2001). It didn’t stop there in terms of upheaval and war
for Finland as an emerging country in it’s own right. Collaborations with the Germans during the Winter
and the continuation wars, and later defense of own lands against the Germans who had occupied
Norway (Info Finland, n.d.) (Zetterberg, 2017) (Henriksson, 2021). After the wars Finland rose to be one
of the most technologically advanced countries in the world, with a sophisticated economy and high
standard of living to boot. This previous history is important to understanding the formation of Nokia
and some of the company's early challenges, external events that would have impacted internal culture
and operations. Looking back there is a turbulent external history that combines with a strategy that is
pretty cut throat. If one of Nokia's businesses isn’t of use anymore and has no effect on Nokia groups
ROI, then it's likely it would be sold or stopped. A trend still seen in the present day.

Coming to the more recent time of study 2007 - 2020, we have Jorma Ollila announcing his retirement
from CEO position at Nokia in 2005 and that his replacement would be none other than Olli-Pekka
Kallavuo who had been working as CFO and later successfully as director of the Mobile phone division
(Ollila, 2016). In 2005 he stepped into a position where the company had experienced a decrease in sales
the last three years and the beginning of an unparalleled revolution of the communications sector,
leading to an 200 fold increase in mobile phone users (Changing the guard at Nokia – Olli-Pekka
Kallasvuo takes the helm, 2005) (Jorma Ollila, Reference for business). Later failing to see that the rise of
touch based modern phones like Apples iPhones and Samsungs Galaxy series would be the future, he
was sacked in favour of Stephen Elop in 2010. Kallasvuo’s time at Nokia as CEO bridges a time of mass
market growth, failure to predict effectively the wishes of customers, the discontinuing of operating
system Symbian, collaboration launch of Meego together with Intel, presenting a new Linux based
operating system that combines Intels Moblin and Nokias Maemo systems. These are only a few of the
major changes Nokia saw in just 13 years. Even with comprehensive change management, this will take
its toll on the employee's motivation. Shown in behaviours like employees leaving Nokia on mass, ability
to adapt to a new changing scenario and resistance to changes already in place.

Organisation wide strategy, change and the individual

Organisations are essentially ‘complex systems that are typically made up of a large number of
constituent entities that interact with each other and also with its environment.’ (Gell-mann, 1995).
When a complex system is adapting or changes are put in place, it can have non-linear or unpredictable
outcomes, meaning that it’s often difficult to establish a clear image of what's to come (Gupta & Anish,
n.d.) (Rihani, 2002). Individuals need a vision or goals to work towards, this helps the feeling of safety
and through this motivation. If an individual is busy with building self esteem, then a vision provides
possibilities for promotion and gives them a future to work with in their planning towards achieving this
motivation factor. Change management can help lessen the number and impact of unpredictable
outcomes at the organisational and strategic levels. Maintaining motivation through ADKAR awareness
and desire checks.

Looking at Finland's history of war, fight for independence, restricting legislation that limits certain
business setups like combining businesses and the general upheaval seen since it’s conception is ongoing
(Solvell & Porter, 2004) . Once Finland was released from Russian rule in December 1917, there was still
the 1st world war to finish and the second world war on the horizon (Eskelinen, 1996). Only in recent
years has there been space to truly build on a bedrock of national stability. Nokia as a Finnish
organisation has survived some pretty tough circumstances, and is truly a Finnish organisation at heart
(Moen & Lilja, 2004). Even to the point of refusing the possibility to move HQ into a more central
european location (Haikio, 2002) (Hira, 2012). But also by having its own influence on the fact that
Finland has grown to be one of the knowledge economies of the world (Pajarinen & Rouvinen, 2013).
These external factors ask for internal changes within the organisation, and set the scene for present day
company culture and norms. Management of change was once ingrained in project management and is
only in the last 20 years starting to find the clearer form presented today. It’s a growing profession
meaning that in all the 155 years the company has been in existence, the majority of these years
wouldn’t have seen change management orchestrated for the good of the people. Creating a culture
based on criteria that is mostly external in nature and extreme. If Nokia had a fight or flight mechanism, I
would guess it was a fighter.

Nokia has been widely criticized for the decisions that led to its inability to keep up with the new touch
screen trend in 2007. Whether it's a situation of not quick enough, growing so quickly that dedication to
innovation was replaced by the need to simply manage the demands of business as usual (The
leadership network, 2018) (Aspara et al., 2011). There was also an incompany perception that
touchscreens wouldn’t last long as the consumer preference (Doz & Wilson, 2018) (Siilasmaa, 2018)
(Fakhrutdinova et al., 2015). With the arrival of Apple's iOS and Android operating systems, it became
clear that not only would this trend stick around but also that Nokia had missed the boat on this one
(Bouwman & Al, 2014). By 2011 Nokia’s smartphone market share (although not its total mobile phone
share) had dropped from 50 per cent to 15 per cent in less than four years.’ (O'Connor, 2017). The
significant change in the market was not the only factor. Meego and symbian were replaced with
Windows 7, a less than popular operating system (Ricker, 2011) (Vuori & Huy, 2018). The organisation
was found to be bureaucracy heavy with over 300 VP’s around the globe. There was said to be a culture
of fear between middle management and top executives that stifled innovation (Huy, 2015). Many of
these things culminated in Microsoft purchasing ‘substantially all of Nokia’s Devices & Services
business, license Nokia’s patents, and license and use Nokia’s mapping services (Microsoft
news centre, 2013). Although in recent years there has been significant attention being
given to shifting a somewhat stifling culture, much more could be seen to be needed
especially due to the stubborn and intangible nature of cultures influences. It’s not
something to take lightly. Profoundly engaging with an employee's ADKAR can help to
create intrinsic company cultural change.

If we take a look at Nokia's history, there is a long standing tradition of acquisition, mergers, slashing of
projects and selling of businesses. Acquisitions mean new structures are needed to make optimal use of
the newly acquired company. Mergers mean a changing of the present state, like the one with
Alcatel-Lucent ‘with no complicated corporate governance structure’ changes (Forbes, 2015) (Nokia &
Alcatel-Lucent, 2015), but still there was the need for ‘Eliminating duplication and amalgamating
technology and staff groups’, and the HERE mapping business and Alcatel-Lucent's submarine cable
divisions were put in line to be sold (Mallinson, 2015) (Khan et al., 2017) . Couple this with the previous
history of a company like Alcatel, Lucent or even Ericsson who also were heavily involved in their own
acquisition programs since the nuclear winter of 2000-2001, These companies become part of the Nokia
group who also experienced mass mergers and acquisitions, not to mention the major restructuring
between 1987 -1995 (Aspara et al., 2011) . One starts to see mass change placed on change, on change
without necessarily the attention given to managing the people side of change (Ericsson, n.d.) (Ericson,
n.d.)(Gabriel, 2020) (Schechner & Raice, 2015). Within the span of a few years together with the growing
trend of acquisition as the way to update one's portfolio abilities or vision, it would be understandable
that individuals in these companies saw so many shifts of culture, norms and basic system values as to
lose motivation. Change fatigue comes together with uncertainty about the future, lowering the focus on
the Maslow's pyramid and lowering speed of adoption.

The cut and slash policy that Nokia seems to have in regards to non-profitable assets, also takes its toll
on the individuals working in an organisation. If a business or project within the group wasn’t increasing
profit or had value to Nokia group growth vision, then chances are it would be stopped, sold or merged
with other business assets. A fine example of this would be the story of the development of Meego.
Meego is a result of the collaboration between Intels Moblin linux operating systems and Maemo from
Nokia. The operating system was designed for mobile computer devices across the board. In 2010 Nokia
planned to make Meego it’s primary operating system but within a year of its launch it was cancelled by
the newly appointed CEO Stephen Elop in february 2011 (Arthur, 2010) (Intel and Nokia release MeeGo
v1.0, 2010) (News team, 2010)(Intel, 2010). Couple this with the launch of Symbian 3 in 2010, also
stopped in february 2011 and replaced by Microsoft windows 7. A system that never became a rival for
Apple's Ios launched in 2007 and Android that was launched in September 2008. When changes are
implemented in a very short time frame one has to ask if there was sufficient awareness of why Meego
needed to be scrapped and did they address the desire of individuals to change to a totally new
operating system mid flow? Desire can be translated to motivation in the sense that if an individual
doesn’t want or choose to make a change, there are often issues with hygiene factors like working
conditions, security, status, relation with peers and subordinates (Smith et al., 2014, page 20).

Most individual employees have an unwritten or psychological contract with their employers, this
contract ‘ensures the perceptions of both parties to the employment relationship of the obligations
implied in the relationship.’(Hayes, 2010, page 191 quoting Argyris). With further clarification offered by
Guest et Al referring to it in terms of perceptions of fairness, trust and the extent to which the ‘deal’ is
perceived to have been delivered.’ (Saunders & Thornhill, 2002) (Guest, 2004) (Defining and analysing a
psychological contract, 1970) (Change management of mergers: psychological contracts, 2004)
(Riad, 2007) (Kansal & Chandana, 2014). Why is this important? If an individual experiences feelings
of not being safe, not knowing if they have a future at the organisation, and lack of trust regarding these
first two points. The realistic repercussions a change can bring to status or working relationships and
even feelings of fairness are wide reaching and often profound (Vuori & Huy, 2018). Furthermore,
experiencing change fatigue, not being able to keep up with their newly formed jobs because while they
were fully qualified for the job they were hired for (Example is Meego) (Bei Bei, 2015), they need training
or possible total relocation to make sense of their knowledge, skills, perceived psychological contract for
new positions due to structural change. In such situations it could be perceived that there is a breach of
psychological contract, and if this happens it needs to be rectified in order to maintain working
conditions conducive to re-establishing motivation. Addressing the ADKAR’s of individuals, teams and
divisions can help here, pinpointing the types of approach and communication needed to get back on
track (Prosci, n.d.) (Hiatt, 2006).

The speed of change regarding CEO’s has also increased, and with them comes new strategy and vision.
Between 1967 -2006 there were only four CEOs, the last of which being Jorma Ollila who brought Nokia
into the focus on the telecoms direction. Between 2006 - 2020 there were also four CEO’s, including
Stephen Elop who radically cut jobs and downsized within months of taking the position. This speeding
up of change regarding the top vision makers asks for more awareness about how this affects the
individuals in the organisation particularly where a CEO takes radical measures to establish organisation
health and own agenda. Within this attention to building the CEO as a viable sponsor for the changes
they implement and attention to appropriate type communication from the right people (Sumba, n.d.).
Nokias code of conduct documents give a clear indication of the promoted view of Nokia and clearly
influenced by the CEO of the time (Corporate responsibility report 2007, 2007) (Nokia, 2018) (Nokia,
2011). Since 1997, Nokia has been promoting itself as a sustainable organization with high ideals when it
comes to the three P’s, people, planet and profit (Nokia, 2010) (Nokia, 2011) (Nokia, 2020) . While these
code of conducts represent an ideal the organisation is working towards, the other side of this is the
reality that within Nokia, ‘workers at Nokia’s manufacturing sites and its supplier companies were
systematically unable to benefit from the company’s success, while facing the most difficult
consequences of the company’s decline (Good electronics network, 2015)

Probably one of the worst communication blunders at Nokia to date was a letter sent by the company's
most important sponsor Elop (L. Sirkin et al., 2014) (Caldwell, 2003) (Prosci, n.d.) (Prosci, n.d.). He sent
all the employees a long winded burning platform message, pretty much dismissing all their work of the
last few years while making a battle cry for change, and could be read that he is blaming employees and
the previous CEO for this dire situation (Elop, 2011). There was one paragraph about a vague vision that
would certainly not be enough to point employees in the right direction. The message was clear, job
losses and reorganisation were imminent and all this received just before christmas. Maybe the message
was a necessary one, and it could be said that employees needed a wake up call. But the bad
communication and knock out effect this had was unnecessary (Rosov, 2011) (Brian, 2011) (Rohit, 2010)
(Boselie, 2014) (Dhoot, 2011). Nokia even had a protocol called the bridge program to follow when laying
off employee’s (Vasquez, 2016) (Sucha, 2015), while sad that such a process is needed, ‘Nokia's Bridge
program resulted in 60% of employees knowing their next step the day they exited the firm. It also
helped employees start 1,000 new companies’, creating a positive way forward for those who can no
longer remain with Nokia (Sucha, 2015).

Organisations are complex nonlinear working organisms. Made up of people sensitive to alterations of
culture, values and shifting norms. In the case of Nokia, caused by uncoached sponsors, mass
acquisitioning and drastic changes in large scale projects relating to changing customers values. These
deviations from a constantly changing previous norm leave employees on edge and asking what the next
change will entail. If this change is managed well, the rate of failure which is high in above situations, can
be reduced to create successful impacts on project outcomes including return on investment. People
who are taken on the ADKAR journey and given special attention when it comes to awareness and desire
creation, will have more motivation than those left to simply deal with the current state of affairs,
increasing in speed and scale change.

Discussion
The maintenance of motivation in mass changes is the key topic here. In the analysis we have seen that
change on an organisational scale is not new and could be seen as an ingrained part of Nokia company
culture. However it remains that changes are difficult for employees, particularly those experiencing
overlap on overlap of change without chance to acclimatize to the new status quo. The first step would
be to understand precisely what motivates people, what does a motivated person look like and present
this as the new standard. Especially in light of their new transformation plans announced: (Kapko, 2020).
My second step to addressing the above situations would be to implement quality and people orientated
change management in order to maintain motivation.

But maybe more interesting still, is to implement new company values of continual improvement
(change) and motivational policy. Reinforced these become company norms and a basis from which
mass changes can be both expected, planned and successfully completed. Making use of an agile based
way of implementing changes can also help to transition from one culture to another incrementally and
with grounded visible next steps (Colin & Lorenzin, 2006) (Arefazar et al., 2019) (Sunner, 2016). Helping
employees to know where they are and where they are going, addressing basic needs all through the
Maslow’s hierarchy. Acknowledge the company's current and historical working culture and better align
this with employee expectations and ability to do their work. It’s easy to underestimate external
influences of company culture, but with the continually changing Finnish frontiers and overlords, it's not
a surprise that Nokia is used to a cut and slash culture and quick changes to survive the next thing the
external environment throws in the company's direction. Getting more in touch with company culture
will enable the possibilities of development and growth. Surprises hurt motivation while clarity of goals
and expectations at the very least lay a foundation motivation can grow from. In other words, lessening
the impact of dissatisfiers (Hertzberg, 1993) will mean that other forms of motivation have a chance of
creating very real impact.

Greater attention needs to be given to the people's side of change in order to make the company ready
for the next planned merger or acquisition. Slowing down the number of acquisitions in a short space of
time helps speed of adaptation, adoption and change fatigue. Picking compatible company cultures
alongside compatible technologies and products (European CEO, 2015) instead of only the later. Slowing
down and consolidating the company's visions and goals would help with this but maybe not viable in
the volatility of the current market and the speed that new market changing tech is brought out. But
growing too quickly also has it’s downfall and is said to be one of the reasons for the company's mass
fallout in 2007. Being more selective about which companies are acquired with criteria based on
compatibility of employee culture, norms and values together with change readiness. Top executives
were too busy keeping up with the speed of growth to give enough focus to innovation and sponsorship
which would have kept them in the touch screen game (Doz, 2017)(Thaler, 2008). Managing the
awareness and desire creation for employees would help to bring them onboard, creating a process
wherein they get to decide to engage and undertake a change rather feel forced or overloaded by it.
Some change projects are inevitable, when this is the case a company can give attention to managing
motivation
In the case of acquisitions and mergers, the present trend is one of speeding up and doing more. But
many are starting to question this culture of mass acquisition at the executive level, together with the
overworking and change fatigue that is the result amongst the people who operationally make it happen.
Argyris and Schon together developed a ground breaking theory of learning loops within their response
to change that could help here (Argyris, n.d.) (Argyris, 1976) (Argyris, 1977). Single loops, the common
standard in many organisations, repeatedly attempt the same problem in the same way. ‘Double-loop
learning goes beyond that, modifying the goal in light of the experience.’(Cattell, 2013). Implying that
management and the executives at a higher level can implement an approach to change by changing
themselves.

Situations like the mass fall out created by Stephen Elops letter, could have been averted with change
management that emphasises sponsor coaching and development. It could be that Elop the then Nokia
CEO wouldn’t have listened, but change management would have at least given him every chance of
understanding his sponsorship role and how to execute it. Instead it had extreme implications for the
psychological contract shared by employees and the feeling of safety they felt at work with this
somewhat clumsy attempt at creating a burning bridge and call to action. Instead it resulted in a totally
different sort of action and in the end Elops dismissal. Loss of safety would put any employee affected
thus lower on Maslow’s hierarchy and further away from the sorts of motivations that positively impact
company culture and ROI.

Answering the two questions from my introduction, in short it would be yes and yes with the proper
planning and implementation of an ADKAR journey for the people involved. ‘Can effective change
management techniques and theories like ADKAR help in decreasing an individual’s dip in motivation?
Project success rates are rapidly increased with change management and attention to the people side of
change (Prosci, 2018)(Prosci 2016-2018) .‘How can known change theory and management help
organisations like Nokia, bring about organisation-wide structural changes, while taking their individual
employees with them?’. In the years before change management was really defined, managing the
people side of change wasn’t really in the awareness of most professionals when undertaking projects
that initiate major changes. Change management is an evolving profession and with this in mind still
approximately in it’s adolescent years. Present change management theory and practice offers a thought
out, research based way of planning and carrying out change management. As Benjamin Franklin
famously said ‘By failing to prepare you are preparing to fail’, and most did just that. But now more is
possible now than it was, and more will be possible in the future than it is now.

‘If your frontline staff members aren’t happy, your customers won’t be happy.’ (UK Essays, 2018). When a
company’s strategy is mass change, and the external environment asks for this, employee’s motivation
becomes key to customer satisfaction. If we don’t manage the people side of change through quality
change management, we lose speed of adoption and the quality needed to satisfy customers in an ever
increasingly demanding time.
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