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Corporate Governance and Business Ethics at Nokia


For this task I have selected Nokia organisation. Reason for selecting this specific organisation to provide my project on would be that the Nokia organisation and the merchandise has been my favourite. Having inspired and experience about the merchandise and to proceed through some research for its organisation going to be even more interesting factor for this assignment to go through, and further knowledge about the corporate sociable strategy and activities.

For Nokia there a wide range of principals to follow because of their sustainability of the company, like understanding the customer need, using technology, keeping before competition and co-ordinating marketing activities. After that, there are several factors like commercial social strategy, business ethics and proper managing them are similarly important.

Nokia is focused on providing traits of the product can ingest energy, material use, packaging and disassembling and recycling procedures. The circulation of declaration should be user-friendly for its stakeholder and supportive honest issues. The organisation mission statement suggests that one small step at the same time can contribute look after environment in global idea. Further, the corporation valid and important issues to go over and manage has been running through work in environmental issues for history quit couple of years, furthermore it will continue to advance other honest grounding of resource chain in approaching future as well. Never the less Nokia is trying to indulge its total part in the management of the issues in a serious manner in co-operation with all prospective stakeholders.

Company's Backdrop:

The use of commercial cellular phone manufacturing company is a comparatively new one getting started in couple of decades, however the number of readers and the majority of services that was offered by cellular devices have sharply increased since last decade. Cell phones started to get more smarter and complicated as well, to keep up with this fast development of software and industry. The development of new software has developed many top features of these mobile phones, such as its excess of connectivity, multi touch selections, multi megapixel camcorders and hi-def (HD) video playbacks.

Nokia Company is the world's biggest manufacturer of mobiles which is mainly located in Finland. Now the business is providing customers in 130 countries and having more than 60, 000 employees during 2005 (Nokia 2006), but crossed more than 123 553 by the end of 2009 (2011). Nokia provides products, equipments, services and solutions for companies and network providers. Nokia as an iconic world leader in mobile communication technology, and delivering a positive travelling force of expansion and sustainability of the huge mobile industry.

"Nokia" the name it gets from the river Nokia of Finland which is the home country of its origins in the year 1865. The company mainly used to package in producing paper, cables and plastic till the finish of 1960, later they migrated into the business of telecommunication and gadgets.

Nokia's business has four divided groups; Networks, Enterprise solutions, Media and main the first is Mobile phones. The Venture solution group mainly handles developing cellular systems for used in the corporate sector, and Network group offers wireless switching and transmitting equipment. Multimedia cable television set-top containers and home satellite television products and also provides mobile video gaming devices. The main back bone of the company group offers and offers mobile, wireless speech and data products in corporate market and consumers.

In the field of gadgets, during eighties Nokia produced tv (Television) pieces as their main concentration of business to carefully turn towards International. Because of cost factor of Television sets, Nokia could not get acquisition positively in the local and global market, that company even was required to use under several brands and then for cell phones under two brands, none of them of both products were called Nokia.

Nokia Company put lot of emphasis mainly on telecommunication, mobile networks and cell phones by divesting non-core activities and concentrating the Nokia brand. The new corporate strategy proved helpful to attain the global market in 1998 in neuro-scientific leadership in cellular phone business. Today, Nokia stands as twice successful that of its close to rival competitors. The company has prevailed in making and projecting huge and strong brand. For the several years Nokia occupied the top ten on the brand's scorecard of the world's powerful and strongest brands. Beating both hugely strong brand organisations like McDonald's and Disney, Nokia stood 6th in best brand in 2005 (Haikio 2003;2006).

However, regardless of Nokia's present success, Nokia indeed should be plan future concern and sustainability in the extreme competitiveness in the field of telecommunication business.

Theoretical Grounding:

To start with conceptual composition for corporate sociable responsibility (CRS) had already started out reasoning in US in the half of a century before (Carroll 1999, cited by Crane, A and Matten, D). During those time there's been great deal of issues in theory and principles have risen with regards to CSR. This issue regarding the concept of CRS arose two main main questions first of all, why do firm have communal as well as financial duties? And why it can be argued. Secondly being, what is the nature of corporate sociable responsibilities?

Why do organization have social tasks?

The first question shows a wide array of different ideas and controversy and problem in the past time, but now it has hugely been accepted that there are other responsibilities simply just making income only. The idea of carrying out best on social responsibility, the organization has incorporated and promoted their own self interest adapting the proper channels and methods to care for sociable responsibility.

The organization may achieve success to fulfill their customers providing better product, services and furnished good code of social responsibility, but in the other hand it may lack to understand other unwanted consumers responsibility and action of consumers. We can take ExxonMobil engine oil giant as an example, (see www. greenpeace. org) agitation led by Greenpeace an international consumer boycott this oil large throughout 2000s and provoking that company in charge of making weather change. Further discouraging the consumers to choose the product of ExxonMobil.

To build the interest with the federal government by developing voluntary action programs towards world, so is to keep good relationship with legislation.

It helps to grow a wholesome romance with the population by providing them with the interpersonal helps like better education and even more equitability community, which helps the organization for long- term positive contribution to society.

Resulting to catch the attention of the staff to work in those kind of company who care for good level of social responsibility commitment.

The above mentioned aspects will be the once that firm would wish to build up for sustaining primarily good business reasons. There is absolutely no guaranty that organization going to be successful using their most important motivation of the decision machine (Bowie 1991. Cited by Crane, A and Matten).

It is not clear that the action of trading on interpersonal responsibility determine in overall financial success. There are other aspects also are present on moral discussion for CSR to consider.

Almost all the corporate activities have responsibility of social impact, either they package in service or product business. They can not deny the actual fact or escape reality of responsibility of corporate activity either it comes negative or positive and even natural.

There are many causes of social problems brought on by firms, for example being environmental pollution while producing. Hence the organization has the work to deal with that.

Carroll's four part model of corporate public responsibility.

(Source: Adapted from Carroll, A. B. 1991)

The nature of CSR:

The above mentioned Archie Carroll four part model of corporate social responsibility is the most accepted by nearly every establishments. Further Carroll regards the CSR as multi layered concept, which may be divided into four inter related aspects, those are Financial Responsibilities, Legal Responsibilities, Ethical Duties and Philanthropic Duties.


The stakeholder theory of the company strongly focuses on corporation and its tasks. The Stakeholder starts by considering numerous teams to which the organization has a responsibility. Freeman defines that "A stakeholder in the organisation is any group or person that make a difference, or is damaged by, the accomplishment of the organisation's targets(1984:46).


This statement regarding environmental factors is attended to to employees, customers, stakeholders and shareholders damaged by or is thinking about Nokia's environmental activities. It relates to Nokia understanding environmentally friendly aspects and impacts of its activities and also state governments objectives and concentrate on for ongoing improvement. Environmentally friendly data in this report includes energy usage, immediate and indirect skin tightening and emission, water use, discharges to water, waste materials, ozone depleting chemicals and other harmful fumes emission to air. The data also shows the idea of assistance of stakeholder and the engagement of Nokia in other practical environment factors. Through the technique of product life cycle, Nokia reduces the possible damaging environmental impact of its products, services and businesses. Taking into consideration the environmental issues, Nokia's step to become more environment friendly is to create for environment as their very first step was the merchandise life cycle. This step implies that it reduces the utilization on more natural resources and energy and at the same time it maximises the recycling and reuse of its materials used in its product. Nokia relies on an comprehensive network of global suppliers because of its components, manufacturing services, facilities management and end of life services. This network of suppliers and taking care of them plays an important role in the validation and improvement of the products' environmental performance.

The method product life bicycling begins with raw materials extraction and ends with the recycling of the materials and then is the waste materials treatment done and the recovered materials are reintroduced into the economic system. The usage of materials and energy at different levels of product life routine are linked to the environmental aspects of Nokia products. The main environmental influences related to Nokia are waste material and pollutants released in to the air, normal water and ground. So the procedure for life circuit is a way how Nokia helps and handles its environmental activities. This method followed by Nokia helps boost environmental performance of products and can be achieved cost effectively. This specifically pertains to product when the developing process comes to act.

What concerns Nokia is the change of weather which is increasing the environmental significance of transport and logistics, as these are largely based on use of fossil fuels. Nokia's coverage of recycling products is somewhat different as main products, mobile phones and network equipment aren't recycled in the similar method. For mobile phone, the periods of raw material extraction and the creation accounts for the most important part of the overall environmental impact. Energy utilization is another major issue when it comes to network equipment. Network products contain a huge percentage of metals whose processing and operating consumes more energy than that of plastics, which is the most dominating material in mobile phones. On the other hand, metal offers a major edge as metals can become more readily retrieved for reuse and recycling than plastics. Energy ingestion in various ways is the main reason behind environmental impacts through the use of all Nokia products. The release of new media features and internet features in mobile devices calls for better power management also to achieve this more of natural resources are being used to improve energy efficiency and expand power life which is another concern for the environment. While the capacity of mobile sites has increased their comparative energy use has decreased but to no point as the network equipment requires the major energy usage factor. Energy efficiency design advancement has been significant in mobile network elements.

Nokia's proposal for environmental development covers the complete method of product life routine and is carried out through different areas to focus on, areas such as design for the surroundings, supply chain, network management, environment management system and practice of end of life services. By using these areas to focus, Nokia strives to eliminate several dangers and gain the positive acceptance of its stakeholders and increase its revenue through client satisfaction. Nokia's definitive goal is to develop innovations technology, products and good services for people which have no undue environmental impact, take in energy efficiently and effectively and can be properly used again or recycled or disposed off.

Nokia's environmental strategy relates to the business enterprise strategy. The business groups have place environmental targets for their own activities to use and stress on the corporate and business environmental strategy. Nokia obviously notifies that environmental issues should be taken into account as it is more and more important individuals of development globally. Thus Nokia recognises the worthiness of co-operation in dealing with global issues such as consumption of resources and the emission of carbon dioxide from real human activity. So Nokia participates in a wide range of cooperative initiatives through method of industry association and several global organisations. While doing so, Nokia strives to lessen energy intake in its own activities by minimizing the utilization of cooling systems, warming systems and other lighting of facilities around its organisation.

Corporate public responsibility influences all resources of a small business but the key aspect which it is appearing in more and more is the resource chain and exactly how things are handled in the company. Employees focus on integrating CSR into the supply chain to make it more efficient. They work with the community they are currently in and they're applying CSR to their work within the domesticated part of the business combined with the global areas of their business. Apart from implementing the thought of CSR, they are making sure that they are finely tuning their strategies and putting forward a great deal of effort to ensure everything runs efficiently. Nokia is wanting to put more focus on what they can do and attempting to admit and take care of what they cannot do. Nokia want to be sure that their customers understand that they are working to the best of their potential to be socially liable in every facet of their productions. CSR is a hot subject for Nokia's managers and the implementation is the main element to making stakeholders and consumers happy. Commercial social responsibility has become a very popular application within the source chain in terms of Nokia but it has only emerged in the last decade. The thought of CSR targets "a total responsibility methodology that contributes societal issues to traditional economic motorists of the source string, "(Maloni and Brown, 2006). Many companies have been slow-moving to adopt CSR considerations and ideas but Nokia has been very successful in this theory. This idea is becoming increasingly more important within every part of the supply string today. Within the whole CSR idea, Nokia make sure that all their employees are participating and some of the suggested methods come through worker training, workplace diversity, health and protection and other community issues such as being hungry and homelessness. The categories representing environment, diversity and safety run through all CSR programs no matter what kind of company an example may be in. Depending about how Nokia's products are made, consumers are prepared to pay an increased price when they know the ethics behind the production. Along with consumers purchasing another brand's products, stakeholders may also be eager to pay a higher price to utilize the business on higher advancements of manufacturing to make certain that consumers know they are getting the quality of product they need. However, not every stakeholder may be happy assist in spending money on improvements plus they may well not be happy to invest in the thought of CSR improvements because they do not attain the knowledge of how beneficial it is to the company, (Maloni & Dark brown, 2006). In order to find the stakeholders up to speed, Nokia make sure they share this understanding of CSR with them and make sure they understand why it is beneficial to allow them to be a part of ensuring everyone and everything around them is taken care of. Nokia need to become more alert to their surroundings if they want to produce that sustainability of their social responsibilities.

Understanding stakeholders expectation from Nokia as a firm is simply as important as understanding customers objectives from its products. Hearing all employees and external sources and putting their ideas into business value can be an important process at Nokia. Nokia is translucent and focussing on stakeholder views they make their business approach as well as making positive connections with its employees. Nokia strive to activate new stations concerning the ways in which they meet their existing targets. This process in to the future can be an important part of their ongoing success. To be able to increase business, Nokia considers their most important stakeholder categories as employees, customers, and their shareholders. In addition they cherish and rely on good relationships with their source string and sector lovers, governments, NGOs and the wider public community. These engagements takes place within their business practice. Discussions with their external and internal stakeholders boosts their knowledge of how their activities are identified. It helps them examine stakeholder satisfaction, strengthens their interpersonal investment programs, and allows them to identify important issues to address.


It is important to generate and sustain an operating environment with opportunities for communication and opinions. Nokia regularly engages its employees in discussions about issues such as corporate values, job facts and competence development, performance, diversity and every day work-life balance. Some of the ways for discussions with employees include specific buying people, performance conversations and profession development planning. These conversations help them convert ideas into day-to-day actions. Nokia shows sustainability issues and initiatives on their internal programs and through various inner communication campaigns. In addition they ensure that each staff understand the Nokia Code of Conduct and their method of corporate public responsibility. They progressively engage with each day customers on issues related to sustainability. Nokia remains to get enquiries and assessment requests about cultural and environmental performance of their operator customers. They react to those demands through their normal customer bank account management interface. Nokia report says Consumer affinity for sustainability issues is also growing. They encourage consumers to consider the surroundings by applying means like unplugging chargers once handsets are completely charged and going back handsets they no more use for recycling. In addition they develop and promote the utilization of mobile services to get more sustainable lifestyles. The main element issues for both trade customers and consumers are product quality, satisfaction with their products and customer support. Nokia regularly survey their trade customers to attain a satisfaction levels. They engage with consumers through their Nokia Care and attention support service both online and through call centres, as well as through consumer satisfaction research and independent market research. Nokia recognizes that some consumers are worried about potential medical issues related to cell phones and base stations. So Nokia promotes public to go through latest online research or read their study regarding health and safety.

"Corporate interpersonal and environmental responsibility describes the actions by companies to keep the culture and moral norms of the societies in which companies operate, " (Tate, Ellram, & Kirchoff, 2010). Different research has been done and various people have explained that sociable responsibility of a company is to only earn a earnings for its shareholders. But today, cultural responsibility is more seen as altruistic goals and behaviours that are done apart from the company's economical pursuits. CSR sometimes appears as the "integration of financial, legal moral and discretionary types of business performance. " The construction of sociable responsibility claim that companies not only need to take part in socially responsible behavior but they also need to have positive financial gains that can be realized through the procedure of acting after public responsibility. As some "firms integrate corporate communal and environmental responsibility with economical strategies, benefits can be recognized through cost benefits from relations and brand image. " The development of these strategies has really helped create a new way that businesses can view their responsibility to world with the company's goals at heart.

If companies focus on producing these strategies of commercial public and environmental strategies, they can begin to realize "the gain from adopting more proactive" activities (Tate, Ellram, & Kirchoff, 2010). These businesses will commence to progress until they have reached their value and competitive advantages they have been seeking. "Most research into corporate and business responsibility supports an optimistic website link between proactive commercial social and environmental strategies and improved upon financial performance. " Most companies align their public and environmental responsibility ways of meet their commercial goals and meet stakeholders demands because those stakeholders are increasingly starting to impact those strategies. "Consumers and stakeholders demand the strategies derive from measureable financial goals including cost reductions, increased market show, higher quality, improved upon manufacturing performance and proceeds innovation. "

One way supplying managers can obtain the associates of the source chain involved is by requesting them to utilize the business to help "construct and support corporate responsibility strategies to meet tactical goals, " (Tate, Ellram, & Kirchoff, 2010). It is vital to be sure that everyone within the supply chain knows the proceedings and can help in developing goals that align with the different strategies. Along with dealing with the different customers of the resource chain, the government will play an important role "in the development of corporate sociable and environmental responsibility strategies. An organization's capacity to utilize the government rules to create progressive strategies can result in higher stable performance. " Once many of these strategies have been developed, it is better to have them implemented as fast as possible. Once they are in effect, the business can watch to observe how their corporate sociable and environmental obligations are closely linked into their financial goals. Once those goals are getting to be worked on, the company and then branch out to be sure they are interacting with those tasks and one of the best places they can target their energy on is within the community they are working in.

The Community Focus

When companies are piecing together their strategies for the corporate public and environmental strategies, they really should think about the community they are simply in. A community includes educational structures, parks, charities, and "habitats with an focus on good works locally, " (Tate, Ellram, & Kirchoff, 2010). The key reason why it's important for a business to utilize its community and incorporate its social responsibility within its community studies is to ensure they are making a good rapport within the area they are working. Companies today are moving further and further beyond their edges and other countries would like to see how well they work within their own community before they welcome them into theirs. "Scrutiny of globalization has resulted in stakeholder's backlash against global companies for disregarding the communities where in fact the firm's operations are centered. Global companies that give attention to local areas can diffuse a few of the angst leveled at them and produce a ecological positive image. " When outside the house communities are looking inside, they will judge the business about how well they treat their communities and weigh it against how well they will treat their customers; how they treat their community and how they treat their customers should go hand in hand.

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