Case Study: Creating Culture

Nokia Siemens Networks' birth involved more than merging product lines and operations. Soft issues rather than hard ones can kill a merger in its infancy, and considering the might and history of NSN's parents, unifying two distinct corporate cultures in to one would prove to be one of the venture's biggest challenges

In November 2006, 250 executives from Nokia Networks and Siemens Communications got together in a room in Munich, tasked with hashing out the details of their impending merger. Nokia and Siemens already had a good idea of what the company would look like on paper: They would create huge global company with strengths in both wireless and wireline telecommunications, leverage a massive international sales force and achieve economies of scale unavailable to either company so long as they remained network divisions of their parent companies. But NSN also would be the merger of two distinct corporate cultures. Bastions of engineering in their own countries, Germany and Finland, each had their own deeply ingrained identities and, yes, pride. The numbers aside, how would the new NSN function?

Attending that meeting was Bosco Novak, who would become the head of human resources for the new joint venture. The president of Nokia Networks and future CEO of NSN, Simon Beresford-Wylie, had asked Novak to take over the role in July, two days before the merger agreement was publicly announced. At the time, Novak headed Nokia's global services division and supervised a huge multinational organization - and also had an inherent cultural asset: He was a German who had worked for Nokia since 2000. But Novak had not a lick of HR experience and was puzzled by his boss' choice. But Beresford-Wylie explained that his role wouldn't be that of an ordinary HR manager. Novak would be responsible for crafting and implementing an entirely new culture at NSN. Novak accepted and five months later he and 249 other executives, managers and engineers were trying to figure out what exactly that new NSN culture would be.

The group managed to find several fundamentals that the two companies had in common: They both were Western European; they both had an ingrained engineering culture; and their employees also had a deep pride in being on technology's cutting edge and a feeling of making a difference in the world. But those cram sessions also revealed some profound differences, not just in their surface organizations but in how their employees related to one another and management and in their approach to problems. Most striking of those differences was a sense of formality and structure in Siemens' culture, as opposed to a looser set of relationships and emphasis on flexibility at Nokia.

(Source: Kevin Fitchard, 2009)

Questions:

1. How does Novak at NSN create new organizational culture, and how the new culture might be differing from the existing culture? Does the new culture will be strong or weak? (12 marks)

2. Do differences between the cultures at NSN generate problems? (8 marks)

3. How the new culture of NSN affects the mangers and what might be the constraints? (10 marks)

4. You are aware about how the organisation's culture is established. NSN employees need to adopt for the new culture, explain how do new employees learn their organisation's culture? (6