Prepared by: on

Report
Michaela Hardwick
s2895058
Planning
in Nokia
1101IBA Assessment 2: Report
Due Date: Tuesday, 23 April 2013

Report on Planning in Nokia

1.0 Introduction
Nokia, a company renowned for telecommunications, has been operating for over 150 years,
providing different goods and services to consumers; including rubber and power generation
(Nokia, 2013). Despite their distinguished reputation for telecommunication devices; competition
exceeded the company, abolishing their competitive advantage and innovative technologies. Due to
a lack of planning, they made a series of mistakes. They tried penetrating the market at a time when
it was not ready and they had teams within one department competing for attention and resources.
As a result, Nokia lost their innovation and had no clear sense of direction.

There are no

contingency plans to help the company stay afloat in a time of crisis or clear objectives to strive to
achieve. Nokias solitary goal is to design an innovative product, however; they have no clear plans
in place to achieve this goal. Consequentially, Nokias lack of planning has led to an exhaustion of
resources, loss of competitive advantage and innovation.
Planning can be defined as setting goals and establishing plans to achieve them (Schremerhorn, et
al., 2011). It is the foundation function of the management functions as it sets the boundaries for
the other three functions; organising, leading and controlling. Steven French (2009) considers
planning to be an integrated quality of a well-managed, successful organisation. However, due to
the ambiguity of forces impacting an organisation; internal and external, an organisations planning
processes are often less efficient and effective than perceived (Stone & Brush, 1996). This paper
will argue that in order for Nokia to regain both structure within the organisation and competitive
advantage, planning strategies need to be drastically improved.

Research shows that

implementation of a hierarchical planning frame and contingency planning is two of the most
effective ways to resolve the problem.

2.0 Relevant Literature

2.1 Hierarchical Planning Frame
Tactical and operational planning is used to integrate the organisations strategy into the
organisation and assist the accomplishment of long-term goals (Johnson, 2013). This approach is
called the hierarchical planning frame and consists of three levels; strategic (long-term), tactic
(intermediate-term) and operational (Schremerhorn, et al., 2011). There are several benefits for
implementing this planning frame. Braekers, Janssens and Caris (2011) suggest that strategic
planning creates broad goals and outlines the organisations direction.

Decision making in

accordance to policies occurs on the tactical planning level. This then flows to the operational level
where the decision making for day-to-day processes occur. This highlights how each level becomes
more relevant to the actual product, becoming increasingly complex throughout.
Michaela Hardwick
S2895058

1101IBA

Report on Planning in Nokia

Their research, conducted on the repositioning of an empty container, showed that minimal
attention had been given to the lower levels of planning which led to no movement occurring. With
the inclusion of operational planning; a clear, concise plan was developed that enabled all
dimensions to be effective and efficient (Braekers, et al., 2011). This author demonstrates that there
is a need for lower level planning in order to create efficiency and effectiveness within the
organisation.

Nokias Research and Development department is currently operating both

ineffectively and inefficiently which it can be justified by their lack of lower level planning. Ivanov
(2010) supports this theory and provides evidence within their article suggesting that the alignment
of the three levels is the key to increasing efficiency, consistency and sustainability, and as a result,
the competitiveness of an organisation. They draw significance to the perception of the levels being
interdependent. When the levels are constructed individually and rather than affiliated, the business
is less likely to perform as consistently or competitively as possible (Ivanov, 2010). Ivanov and
Braekers, et al. share a similar perspective, as they both depict the three levels as interrelated in the
hierarchical frame.
While all of the authors researched supported the necessity for the hierarchical planning frame,
many presented minor disadvantages that often occur in organisations with the planning frame.
Kannegiesser and Gunther (2011) suggest that the use of additional planning is beneficial for
organisations as it gives further breakdown of an organisations goals and the processes involved
with achieving these goals. However; they suggest that this planning will only be beneficial if the
appropriate co-ordination is implemented (Kannegiesser & Gunther, 2011). As seen in Nokia, there
is a lack of co-ordination within the Research and Development teams. This is suggesting that any
form of planning will only be effective with the appropriate co-ordination of resources. Other
authors, such as Xue, Offodile, Zhou and Troutt (2011) argue that the hierarchical planning frame
can only be implemented effectively in situations where there is a clear chain of command. These
situations are becoming increasingly less common due to the changing market and the complexity
of organisational structures and environments (French, 2009). Nokia, however; has a relatively
clear chain of command and therefore would not be disadvantaged by this. Another reason that
businesses may not implement the hierarchical planning frame is because it is considered timeintensive and requires the whole organisation to be collaborative (Ivanov, 2010). The hierarchical
planning frame has a few minor disadvantages, however; these can be avoided if an organisation
collaborates and the appropriate actions are taken.

Michaela Hardwick
S2895058

1101IBA

Report on Planning in Nokia

2.2 Contingency Planning

Contingency planning can be defined as planning to accommodate for an organisations potential
vulnerabilities to ensure minimal disruption (Hall, Skipper, Hazen, & Hanna, 2012).

It is a

researched backup plan that can be implemented immediately when something goes wrong or if a
trigger point occurs. It is designed to ensure continuity of the business (Duff, 2013). In todays
rapidly changing environments and markets, organisations need to be able to transition efficiently
and effectively as it does (Bechor, Neumann, Zviran, & Glezer, 2010). Howell, Windahl and Seidal
(2010) state that at the extreme of uncertainty (chaos) nothing can be predicted: the probability of
unexpected events occurring is 100%. This makes uncertainty the most dominant reason for
contingency planning (Howell, et al., 2010). This evidence denotes that uncertainty and unexpected
events are inevitable and that organisations need something to manage it. It is indicating that all
organisations plans possess a degree of ambiguity and lack of clarity (Howell, et al., 2010).
Therefore, in order to remain consistent with the market, they require a plan to implement if
something goes wrong (Bechor, et al., 2010). Nokia is in an extremely rapidly changing market,
with technology becoming out-dated in short periods. Hence, it is expected that they have a high
degree of ambiguity. Hall, et al. (2012) support the necessity for contingency planning and perceive
that while some disruptions can be overlooked, preparation needs to be undertaken in order to
overcome the more significant disruptions. Their research suggests that co-operative attitude and
inter-organisational collaboration are the most influential variables in effective contingency
planning. This advocates the desire to be attentive and co-operative within the organisation in order
to maintain acceptable levels of performance while increasing or sustaining the organisations
competitive advantage (Hall, et al., 2012).
While there are conflicted perspectives on the necessity for contingency planning, some authors
support it; however they perceive it to be a complex process. Contingency management requires
organisational processes to be restructured (To, Fung, Harwood, & Ho, 2009). To, et al. (2009)
states that effective and integrated processes cannot always be maintained without proper and
differentiated treatment of interactivity dependencies, especially during the early stages of activity
planning.

This highlights that contingency planning is time-sensitive about when it can be

conducted in relation to other planning within the organisation. Their perspective on contingency
planning is predominantly negative, however, they support the implementation of it. The article
focusses on methods that improve the transition between processes; particularly in complex and
interdependent situations (To, et al., 2009). These situations can be applicable in Nokia, due to the
fact that interdependencies occur throughout the organisation; in both production (especially the
Research and Development department) and the chain of command.
Michaela Hardwick
S2895058

1101IBA

Report on Planning in Nokia

Their research suggested that contingency planning can only be conducted after extensive
evaluation and verification has been completed.

It also suggested that performance of these

contingency plans cannot be reflected accurately by models as they are subject to change (To, et al.,
2009). Evidently, many organisations disregard contingency planning as they perceive it to be a
time-consuming process and a misuse of resources. Problems that arise are unique and have the
potential to never be implemented (Ozier, 1999).

3.0 Discussion and Conclusion

Nokia has a problem with the management function of planning. It is important that this issue is
addressed in order to have a clear sense of direction which will lead to them regaining their
competitive advantage and increasing efficiency.

Two potential solutions presented were the

hierarchical planning frame and contingency planning. The majority of the authors assert the
importance of both the hierarchical planning frame and contingency planning by advocating that
they increase the efficiency and effectiveness of an organisation and processes. A combination of
both solutions would be an appropriate way to resolve Nokias problem, lack of planning.
Management should utilise the hierarchical planning frame by creating goals and policies at the
higher levels of the organisation. Middle management should work with these policies to evaluate
current and potential opportunities. Lower management and employees should look at the ways
they can integrate the policies into the day-to-day processes. The operational plan should include
financial plans which will enable Nokia to distribute funds equally to competing Research and
Development teams and eliminate the conflict in that area. Nokia needs to decide on one product to
produce as this will help clarify their direction and minimise some uncertainty that has been found
in Research and Development. The concept of contingency planning should be adapted in this
particular department as it is essential that they have a back-up plan (product) ready to be
implemented if the current product fails to be successful. If this back-up plan is never required, it
could be further developed into a second successful product after the initial product succeeds.
Planning is a vital part of a successful organisation and needs to be integrated (French, 2009). The
incorporation of the stated recommendations will result in an increase in Nokias efficiency which
will lead to an increase in competitive advantage and progress within in the organisation. This is
because there will be more collaboration amongst the different levels of management and cooperation when it comes to decisions and delegation of resources, this will be very prevalent
amongst the Research and Development teams.

Michaela Hardwick
S2895058

1101IBA

Report on Planning in Nokia

4.0 References
Bechor, T., Neumann, S., Zviran, M., & Glezer, C. (2010). A contingency model for estimating
success of strategic information systems planning. Information & Management, 47, 17-29.
doi:10.1016/j.im.2009.09.004
Braekers, K., Janssens, G. K., & Caris, A. (2011, November). Challenges in Managing Empty
Container Movements at Multiple Planning Levels. Transport Reviews, 31(6), 681-708.
doi:10.1080/01441647.2011.584979
Duff, V. (2013). What Is a Business Contingency Plan? (D. Media, Editor) Retrieved April 14,
2013, from Chron: http://smallbusiness.chron.com/business-contingency-plan-1081.html
French, S. (2009). Re-thinking the foundations of the strategic business process. Journal of
Management Development, 28(1), 51-76. doi:10.1108/02621710910923863
Hall, D. J., Skipper, J. B., Hazen, B. T., & Hanna, J. B. (2012). Inter-organizational IT use,
cooperative attitude, and inter-organizational collaboration as antecedents to contingency
planning effectiveness. The International Journal of Logistics Management, 23(1), 50-76.
doi:10.1108/09574091211226920
Howell, D., Windahl, C., & Seidel, R. (2010). A project contingency framework based on
uncertainty and it's consequences. International Journal of Project Management, 28, 256264. doi:10.1016/j.ijproman.2009.06.002
Ivanov, D. (2010, July 1). An adaptive framework for aligning (re)planning decisions on supply
chain strategy, design, tactics, and operations. International Journal of Production
Research, 48(13), 39994017. doi:10.1080/00207540902893417
Johnson, R. (2013). Tactical and Operational Planning. (D. Media, Ed.) Retrieved April 14, 2013,
from Chron: http://smallbusiness.chron.com/tactical-operational-planning-18336.html
Kannegiesser, M., & Gunther, H.-O. (2011). An integrated optimizationmodel for managing the
global value chain of a chemical commodities manufacturer. Journal of the Operational
Research Society, 62(4), 711 - 721. doi:0160-5682/11
Nokia. (2013). The Nokia Story. Retrieved April 12, 2013, from Nokia:
http://www.nokia.com/global/about-nokia/about-us/the-nokia-story/
Ozier, W. (1999). CONTINGENCY PLANNING ... A Cost Versus Benefit Analysis. Retrieved April
16, 2013, from Disaster Recovery Journal: http://www.drj.com/drworld/content/w1_020.htm
Schremerhorn, J. R., Davidson, Poole, Simon, Woods, & Chau. (2011). Management foundations
and applications (1st Asia Pacific Edition ed.). Milton, QLD, Australia: John Wiley & Sons
Australia Ltd. Retrieved April 14, 2013
Stone, M. M., & Brush, C. G. (1996). PLANNING IN AMBIGUOUS CONTEXTS: THE
DILEMMA OF MEETING NEEDS FOR COMMITMENT AND DEMANDS FOR
LEGITIMACY. Strategic Management Journal, 17, 633-652. Retrieved April 14, 2013
To, C. K., Fung, H.-K., Harwood, R. J., & Ho, K. (2009). Coordinating dispersed product
development processes: A contingency perspective of project design and modelling.
International Journal of Production Economics, 120, 570-584.
doi:10.1016/j.ijpe.2009.03.014
Xue, G., Offodile, O. F., Zhou, H., & Troutt, M. D. (2011, June). Integrated production planning
with sequence-dependent family setup times. International Journal of Production
Economics, 131(2), 674 - 681. doi:10.1016/j.ijpe.2011.02.012

Michaela Hardwick
S2895058

1101IBA