Nokia Corporation, Innovation and Efficiency in a High-Growth Global Firm

Nokia Corporation is a global telecommunications company that in eight years went from a near-bankrupt conglomerate to a global leader in mobile telephony, delivering almost 30 percent annual compound growth in revenues during 1992-2000 while shedding businesses that had accounted for almost 90 percent of its 1988 shares. By spring 2000, Nokia had the highest margins in the mobile phone industry, a negative debt-equity ratio, the most valuable non-U.S. brand in the world, Europe’s highest market capitalization, a presence in 140 countries, and unique corporate structures, processes and culture that gave it the feel of “a small company soul in a big corporate body.” Along with growth in size and diversity, however, came growth in complexity: Nokia had to develop multiple businesses and technologies (while dealing with the great technological uncertainties that were inherent in the convergence of mobile telephony and the Internet), and had to manage a growing network of alliances and a number of acquisitions, mostly in the U.S. This case provides the background to the issues Nokia faced as it considered how to meet these challenges while maintaining its unique company values and way of working that made it possible to execute efficiently while continuing to innovate.