Nokia: Business Interests vs German Pressures Case
In the world, the market trends of mobile handsets are increasing each day. Before 2001, the mobile handset enjoyed healthy market margins but after 2001, the mobile handset companies started experiencing problems in relation to cost pressures, which lead to weak profitability rates. In 2004, there was a resurge but it was expected to move at a slow pace at around 2008. In the Eastern European market during the year 2004, mobile handsets had a growth of eighty-eight percent, which was expected to rise up to one hundred percent by 2011.
Nokia, one of the main mobile handset providers has some strategies that it uses in its business. On of the strategies is to reduces costs of production and increase its products all over the world. This has been possible because, for every ten handsets bought all over the world four of them come from Nokia. However, the global market has affected its strategies leading to the closure of the German company based in Bochum and relocating it to Romania.
The backlash that Germany had over Nokia was not justified because it was the government policies in relation to their employment laws and taxes that made Nokia to close their company and move to Romania (Scullion & David 25). Additionally, Nokia was not the only company to close down its operation in the country because there were other companies, which closed their operation earlier. The only reason they was a backlash was that they were not aware of its closure. In order for countries to be more competitive, they should try to be friendly with their foreign investors by creating a friendly environment to conduct business by lowering their taxes and labor laws.
The only thing that Nokia did wrong was to close the company without even consulting with the government so that they could be able to look for ways to solve the problems that they might be having in relation to their closure (Jain & Rajendar 85). In addition to the damages that Nokia has caused due to its closure, they should pay an amount of money to the employees as compensation because what they did was inhuman to their employees. Additionally, they should also pay the government due to the profits they made while in Germany.
Works Cited
Jain, Shanul and Rajendar Rathore. Nokia (B): Business Interests vs German Pressures. Ranga Reddy District, India: IBS Case Development Center, 2008. Print.
Scullion, Hugh and David Collings. Global Talent Management. Florence, KY: Taylor & Francis, 2010. Print.
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