«Abstract We conducted a qualitative study of Nokia to understand its rapid downfall over the 2005–2010 period from its position as a world-dominant ...»
The pressure was not personified in any one [person], but came from the whole executive group.... For me personally and my team, the pressure was the message that ‘‘we need these phones, we need those phones, we have to have releases in such and such a time.’’ (UMM#3, software) Those [key technological decisions] were all taken to the executive group and they approved the technical choices.... It was like the TMs told us that ‘‘now we’re using [specific software], end of discussion, this is what we’ll do.’’... Each morning we had a new strategy and each morning there was a new angle. It was very much dependent on what someone had said to [EVP in charge of the unit] on the previous day—that was the new direction. (UMM#4, software) Even in the early 2000s, the sales organization had already been changed such that the link to the customer was rather unclear.... There was a layer between the customer and the units developing the software.... This blocked transparency and also motivation. (MM#7, software) Organizational norms—an element of attention structures (Ocasio, 1997)—also intensified MMs’ internal focus. Nokia’s TMs believed that MMs’ narrow internal focus would ensure effective implementation, and therefore they discouraged MMs’ external focus.
Don’t challenge me, but focus on implementation’’’ (MM#2).
TMs’ and MMs’ different appraisals. As a result of the structural distribution of attention, different appraisals generated different emotional reactions among TMs and MMs. Whereas the TMs’ appraisals of the person– environment relationship focused on the external environment, MMs’ appraisals mainly focused on factors inside Nokia. TMs recognized early on that external conditions beyond Nokia’s control threatened its survival. As one of
[In 2007], Sergey Brin, one of the founders of Google, took something out of his pocket that I’d learned to call a ‘‘smartphone.’’ He put it on the desk, then he pulled out another, and a third. Then he turned to the audience and said, ‘‘In two or three years’ time, these displays’’—that’s what he called them—’’won’t add any value. All the value will be in the cloud, and these displays will just be a window on the cloud.’’ 16 Administrative Science Quarterly XX (2015) I’m looking at him and I’m smiling, of course—there were 500 people watching. But I’m thinking, ‘‘Oh shit!’’ because he was spelling out Google’s strategy: make the smartphone less value-adding and move the intelligence to the cloud [which would make Nokia irrelevant as its core business was making ‘‘these displays’’].
In contrast, MMs’ appraisals focused on threats perceived inside Nokia.
Though PUs also made sense of their respective narrow market segments, their appraisals often focused on what TMs wanted from them. These appraisals included a perception of potential harm to their well-being and uncertainty over their ability to cope with it. For example, an MM from a PU (MM#3) told us: ‘‘The people who told the truth [about the feasibility of schedules put] their reputations on the line. They ran that risk.’’ Similarly, the focus of software MMs’ appraisals was on the threats and uncertainty relating to TMs’ requests.
UMM#5 noted that ‘‘if you did not comply [with TMs’ unreasonable request to maintain a steady pace despite mounting technical challenges], you would be labeled as a loser.’’ In addition, Nokia’s tendency to change its organizational structures frequently to ensure effective resource allocation made MMs in both PUs and the software organizations perceive heightened threats to their well-being inside the organization (a primary appraisal of fear) and low ability to cope with such uncertainty (a secondary appraisal).4 As a software MM told us: ‘‘Reorganizations were difficult. People had to reapply for their jobs at Nokia.... I sent my application. Then you got an invitation to an interview...
It was quite tough.... At that point, you started to wonder whether you were working at Nokia or not. I felt like I wasn’t—I didn’t have a job or a position’’ (MM#4, software). Conversely, we found very little evidence of MMs’ threatrelated appraisals related to the external environment beyond PUs’ considerations of how well a specific product would sell in its segment. Our informants
described very few appraisals related to the external environment:
Our view of our competitors’ products’ usage was completely distorted in 2005–
2008. People didn’t know how good Android was, or the iPhone.... So, a certain small group knew, but it wasn’t known throughout the company how good the competitors’ products are becoming. The group of people who really knew the pain was way too small. (MM#3) Structural–Behavioral Antecedents of Shared Fear TMs’ history of aggression. A second factor that triggered fear among Nokia’s MMs was its TMs’ history of aggressive behaviors toward MMs, which was widely known inside the organization. When conducting our interviews, we were struck by how often informants referred to the aggressive behavior of Nokia’s chairman, who was also the CEO from 1992 to 2006. He was described as ‘‘extremely temperamental’’ (UMM#6) and shouting at people ‘‘at the top of his lungs’’ (top-level strategy consultant) ‘‘so hard that [the target’s] balls shrank... in front of 15 other VPs and SVPs’’ (MM#5, software). Thus ‘‘it was very difficult to tell him things he didn’t want to hear’’ (top-level HR consultant). Our informants also described several other TMs as highly aggressive.
UMM#7 told how one of the EVPs once ‘‘pounded the table so hard that Structural changes included both major ones (2004 and 2008) and more minor ones, such as establishing new teams and units and rotating people in different roles, which happened yearly.
Vuori and Huy 17 pieces of fruit went flying,’’ and MM#6 said the same EVP ‘‘had nothing but poison running through his veins.’’ MMs’ intuitive fear reactions. Research suggests that aggressiveness often automatically triggers fear in social situations (e.g., Hareli and Rafaeli, 2008), especially when the aggressor has a higher status than the target of the aggression (e.g., van Kleef, De Dreu, and Manstead, 2004); that emotions can become associated with the places where they have been felt (such as meeting rooms with TMs) (Damasio, 2003: chap. 2); and that hearing stories of others’ previous aversive experiences with their leaders can intuitively activate fear toward authority figures (Kish-Gephart et al., 2009). Most of our informants reported having experienced or heard stories of the chairman or other Nokia TMs behaving aggressively, and thus intuitive fear of TMs seems to have
gripped Nokia’s MMs:
[The chairman] had the habit that if someone said that ‘‘things aren’t going so well,’’ then after that the person would be doing very poorly. [The chairman] had a distinctive style so that everyone had to tell him that things were going very well. (MM#7, software) [The chairman] was very cold and it seemed to me that many Nokians feared him.
(Reporter close to Nokia) The atmosphere of fear was created through speech. The worst one was the presentation that [the chairman] gave at Tampere [a city in Finland] about R&D expenses....
He said that his only mistake had been to give us too much money, and that despite that, our products still weren’t good enough, and we weren’t making them fast enough. On top of that, he said that if things continued as they were, 15% of the people in that seminar hall would be gone by the time he came back next year.... This was my first encounter with [the chairman], and it left a permanent negative feeling.
(MM#4, software) One TM noted that ‘‘[MMs who interacted with me] were nervous.... certainly you could sense... people’s natural fear of their lord and master.’’ But he also admitted that he had not adequately realized the implications of MMs’ fear. The aggressive behaviors of the chairman and some EVPs activated a generic fear toward authority figures at Nokia, in particular all powerful TMs.
Shared Fears In contrast to conventional accounts (e.g., Henderson and Clark, 1990; Ocasio, 1997; Eggers and Kaplan, 2013) that depict engineers and managers as relatively unemotional, our informants described having felt strong emotions.
Nokia’s TMs felt high external fear triggered by sources outside the organization such as competitors and shareholders, whereas MMs mainly experienced little external fear and high internal fear triggered by sources inside the firm such as superiors and peers. Our informants described experiencing fear of the same targets repeatedly—when the targets were encountered, recalled, or imagined—rather than feeling fear continuously. These fears had largely a structural rather than personal origin, meaning they were related to the focal groups’ formal position in the organizational structure. We describe these various fears below and present additional data in Online Appendix B, table B1.
18 Administrative Science Quarterly XX (2015) TMs’ high external fear. Nokia’s TMs experienced high fear toward external entities in regard to both the long- and short-term survival of the organization. One described an intense fear reaction relating to long-term survival when reacting to news of the iPhone: ‘‘When [internal market intelligence] news of the iPhone arrived [in fall 2005], I asked which OS they were using. When I found out it was iOS, it made my hair stand on end. iOS was a bombshell....
It was shocking news.... iPhone was an extension of Mac—a Mac computer with radio added. They’d been building the applications and the OS for 35 or 40 years’’ (TM). A second TM confirmed, ‘‘I do identify with your statement that the top management felt external fear,’’ and a third one validated that TMs experienced shared fear for the long-term well-being of their firm. In the short term, TMs’ shared fear was related to the threat of cannibalization of Nokia’s current OS, Symbian. If the firm did not keep posting strong quarterly sales, the board of directors and financial markets might punish TMs. As a TM said, ‘‘Management is under huge pressure from investors.... If you don’t hit your quarterly targets, you’re going to be a former [executive] very fast.’’ Though TMs knew Nokia needed a better OS (MeeGo) to match iOS, they also knew that developing it would take several years. But they were afraid that publicly acknowledging Symbian’s inferiority to iOS would torpedo sales figures and
shatter internal morale in the short term:
I couldn’t say [publicly] that Symbian was no good and that we had to replace it with MeeGo as soon as possible, because I was afraid of the [negative effect on] Symbian sales.... Our organization had to have faith in it—you must believe in the gun you’re holding, because there’s nothing else. It takes years to make a new OS. That’s why we had to keep the faith with Symbian. (TM) MMs’ high internal fear. Most of the MMs we interviewed or spoke with informally admitted that they had feared their superiors. MM#3 told us that ‘‘they were rather scary moments when you had to go against [TMs],’’ and software MM#8 told us, ‘‘I felt fear,’’ and indicated that the target of his fear was TMs. Another informant said that shared fear among MMs toward TMs ‘‘describes the company very well’’ (MM#9, software). Some informants expressed manifestations of internal fear, such as MM#4 (software) who, when reporting fear of his superiors during vertical interactions, wailed loudly, almost breaking into tears.
Nokia MMs also seemed aware of the fear felt by their colleagues; many described not only their personal fears but also the tendency of many individuals to feel a similar fear (i.e., shared fear). MM#10 told us how ‘‘the atmosphere of fear emerged’’ in Nokia, and MM#11 described shared fear using the metaphor of a highly feared, dictatorial national leader: ‘‘General sentiment and communication ended up like North Korea.’’ Software MM#7 noted that MMs in general ‘‘were afraid of being caught.’’ Some informants also remembered specific occasions when they could infer their colleagues’ fear from observable cues or when they and their colleagues had spoken explicitly about fear. For example, software MM#12 told us that his colleague ‘‘was typically open and clear, but in certain meetings [with higher-level leaders], he became very quiet and when he spoke his voice was shaking.’’ Software MM#7 said he had suggested criticizing a TM’s decision, but his colleague ‘‘said that he didn’t have Vuori and Huy 19 the courage; he had a family and small children.’’ MM#13 explained that an R&D MM had perceived that his superior was afraid of TMs; the R&D MM approached MM#13 privately after a meeting and complained: ‘‘[My boss in R&D] has got no balls. He won’t push this [technological issue] upstairs.’’ Software MM#8 said he and his colleague once discussed their shared fear toward TMs in a private gathering at a Helsinki bar, and MM#14 said she had multiple conversations about ‘‘reduced trust and higher worries and fear with my colleagues since the late nineties.’’ As well as fearing their superiors, many MMs described feeling afraid of
their colleagues in other units: