Case Study: Microsoft and Nokia’s Marriage

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Microsoft and Nokia's Marriage
31.10.2018
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Microsoft’s acquisition of Nokia is undoubtedly the most resonant news of the business world (Ando & Rigby, 2013). On September 3, Steven A. Ballmer, the outgoing CEO of Microsoft, announced about this marriage from the Finnish capital, Helsinki. Nokia, a 150-year old Finnish company that in the 1980s became the world’s largest manufacturer of the cell phones, surrendered its business, licenses, and patents to the software giant Microsoft for 7.2 billion dollars. Nokia is viewed as a company that once had 200 billion euros market value, which now worth 15 billion euros; that once captured 40 percent of the world’s handset market but now 15 percent; that has only 3 percent of the market share of the smartphone. Microsoft, on the other hand, though a software giant, but has so far failed to establish a profitable mobile device business. For many Fins, the acquisition is emotional. They blame the Nokia CEO Elop as Trojan horse who handed the Nokia key to the Microsoft. On the other hand, six percent slide of Microsoft share in the aftermath of acquisition exhibits investors’ protests of the acquisition of a company that lost more than $4 billion in 2012. Thus, the acquisition triggered more intrigues than it was expected.

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Information technology and its organizational behavior perhaps are the most intriguing phenomenon of the digital era. This acquisition shows that two leading companies that are geographically far apart for one another can operate across space, time, and organizational boundaries while being the integral parts of one company. Microsoft and Nokia’s marriage is a vivid example of globalization echoing the principal characteristics of the global economy where participation in other markets becomes vital for survival. The acquisition will form a new trend in organizational behavior of two companies, which will be expressed through workforce diversity. The acquisition will bring 32,000 Nokia employees to Microsoft contributing diversity to the Microsoft workforce; both at the surface and deep levels. Each of the two companies has its reasons for acquisition; however, it is no doubt that the goal of the acquisition is the same for both companies. The goal is to acquire a significant portion of the world smartphone market, which is mainly controlled by Apple and Samsung. The workforce’s employment relationship would play a vital role in achieving the goal. The employment relationship in the context of organizational behavior includes the ability to accomplish many tasks, and not a specific job as well as continuously learning skills. Though the uppermost management of two companies orchestrated the acquisition of Nokia by Microsoft, reaching the goal of the acquisition entirely depends on the values and ethics viewed and accepted by the workforce of these companies. In this case, stable and long-lasting belief of the workforce about the merits of the acquisition would play a paramount role in achieving Ballmer and Elop’s dreams.

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In the context of the current market capitalization of the smartphone, it is no doubt that Microsoft and Nokia merger is going to create a new challenge to Apple and Samsung. Though it is difficult to predict the winner of the forthcoming game, the merger is going to open a new era both for Nokia and Microsoft. In the new partnership, Nokia can provide hardware and marketing knowledge of cell phones while Microsoft can contribute to the software for the newer generation of smartphones. In the next coming years, the world is going to observe, whether the Windows Phone platform will emerge as a more vibrant alternative to Google’s Android and Apple’s iOS. The $7.2 billion acquisition has taken place, but the winner is yet to be decided.

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