TITLE Effectiveness of International HRM Practices at Nokia INTRODUCTION This proposed research is an effort to compare and contrast the practices of Fin land based telecom giant, Nokia in the field of international human resource man agement (IHRM). The globalization of business is forcing managers to grapple with complex issues as they seek to gain or sustain a competitive advantage. Faced with unprecedent ed levels of foreign competition at home and abroad, firms are beginning to reco gnize not only that international business is high on top management’s list of pri orities but that findings and nurturing the human resources required to implemen t an international or global strategy is of critical importance. Effective human resource management is essential, especially for small and medium firms where i nternational expansion places additional stress on limited resources, particular ly people. The research would focus the HR practice of Nokia in the fields of development o f multicultural workforce, management of performance and rewards, and looks into the ethical issues faced by the company in the context of international HRM. Th e analysis will also be based on the comparison of theory with the company pract ice in each topic. Importance of the research The rapid growth of internationalization and global competition has increased th e number and significance of MNCs in recent years, resulting in the increased mo bility of human resources (Black et al., 2000). The success of these global busi ness companies depend most importantly on the quality of management in the MNC. The effective management of human resources is increasingly being recognized as a major determinant of success or failure in international business (Black et al ., 2000) Shortages of international managers are becoming an increasing problem for inter national firms (Scullion, 1994) Importantly, IHRM issues are becoming increasingly important in a far wider rang e of organizations partly due to the rapid growth of small and medium-sized ente rprise internationalization and also the emergence of ‘micromultinationals’ in recen t years (Dimitratos et al., 2002). Recent researches suggests that growing number of cross-border mergers and acqui sitions has further increased the strategic importance of IHRM ( Doz and Hamel, 1998; Schuler et al., 2004) Last but not least, the problem of how to internationalize the HRM function itse lf has been identified as a major issue facing international organizations, and it is seen that same HR policies will not produce the same effects in different country contexts. The huge Finnish telecom company, Nokia is the world’s biggest cellular phone manu facturer in the international electronic industry. Nokia was established in 1865 as a forest industry company, since then the company has climbed a long way, bu t has still remained under private ownership. Mr. Jorma Ollila became the CEO in 1992, who then took the company’s current strategic direction. The company s prod ucts are divided mainly between four divisions: mobile phones (wireless voice an d data devices for personal and business uses), multimedia (home satellite syste ms, and mobile gaming devices), networks (wireless switching and transmission eq uipment used in carrier networks), and enterprise solutions (wireless systems fo r businesses).
Currently Nokia has more than 50,000 employees, 16 factories in nine countries a nd research and development facilities in 11 countries. These facts make Nokia a truly global company. The company has reached 40 percent share of the global handset market along with the industry leading profit margins of 20 - 25 percent. The core reason behind the company’s growth is Nokia’s people policy. Analysts like Pollitt (2004) have cla imed that the company’s people policies stems from Nokia ‘Employee Value Proposition’, which according to company’s Corporate Social Responsibility Report is described as “a concrete employment offering for each employee from the very first Nokia day onwards” (Nokia, 2004, 2003). Nokia is one of the most successful multinational enterprises. It is the largest cellular phone manufacturer in the world. Major business of Nokia is in the fie ld of wireless and wired telecommunications. Nokia have 112,262 employees in mor e than 120 countries, sales in more than 150 countries and global annual revenue of 51.1 billion euros and operating profit of 8.0 billion as of 2007. (Annual R eport, 2008). Nokia’s global device market share was about 39% in Q1 of 2008, up f rom 36% in Q1 2007 and down from 40% in Q4 2007 (http://www.nokia.com/2008/Q1/in dex.html). Major products of Nokia is mobile handsets for every major markets, i ncluding GSM, CDMA, and W-CDMA (UMTS). Nokia have good R&D department, Production and sales department in many countrie s throughout the world. In March 2008, Nokia had R&D centers in 10 countries and employed 30,415 people in research and development, representing approximately 27% of Nokia’s total workforce. Nokia Market share
RESEARCH AIMS AND OBJECTIVES It has been established that inductive approach to research is particularly conc erned with the context in which the events are taking place (Cooper & Schindler, 2006). Therefore an inductive qualitative approach is considered appropriate. T he inductive approach is more flexible and appropriate for the topic of this res earch. Instead of hypothesizing, basic aim and research objectives has been set out for this proposed research. The basic aim of the proposed research is to pro vide a comparative analysis of the HRM practices adopted by the multinational mo bile giant company, Nokia. The research objectives for this proposed project are: • To determine the strategy of Nokia on how to develop a multicultural workforce o f its employees who are working in 45 different countries around the world. • To estimate the degree of international human resource management practices and processes used by the Nokia. • To determine the strategy of Nokia on how to measure performance of its expatria tes and thus rewarding them according to their results. • To evaluate the strategy of Nokia for handling the various ethical issues it fac es in different countries.
