Explanations of success and failure in management learning

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Explanations of success and failure in managementlearning : What can we learn from Nokia’s rise and fall

Tomi Laamanen, Juha-Antti Lamberg, Eero Vaara

To cite this version:Tomi Laamanen, Juha-Antti Lamberg, Eero Vaara. Explanations of success and failure in managementlearning : What can we learn from Nokia’s rise and fall. Academy of Management Learning andEducation (AMLE), 2016, pp.2-25 P. �hal-02276713�

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Q Academy of Management Learning & Education, 2016, Vol. 15, No. 1, 2–25. http://dx.doi.org/10.5465/amle.2013.0177

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Explanations of Success andFailure in Management Learning:What CanWe Learn From Nokia’s

Rise and Fall?TOMI LAAMANEN

University of St. Gallen, Switzerland

JUHA-ANTTI LAMBERGUniversity of Jyvaskyla, Finland

EERO VAARAAalto University School of Business, Finland

EM LYON Business School, FranceLancaster University, United Kingdom

We study the changing explanations of success and failure over the course of a firm’s history,building on a discursive approach that highlights the role of narrative attributions in makingsense of corporate performance. Specifically, we analyze how the Nokia Corporation wasframed first as a success and later as a failure and how these dimensions of performance wereexplained in various actors’ narrative accounts. In both the success and failure accounts, ouranalysis revealed a striking black-and-white picture that resulted in the institutionalization ofNokia’s metanarratives of success and failure. Our findings also reveal a number of discursiveattributional tendencies, and thus, warn of the cognitive and politically motivated biases thatare likely to characterize management literature.

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Success and failure stories can be seen as present-day corporate mythology. They are common in thepopular and academic management literature andplay a central role in the business media. Somecompanies achieve celebrity status complete witha positive reputation and a halo effect, whereasothersare framedas losers. Somemanagersbecomeheroes to admire and emulate, whereas others be-come objects of blame and stigmatization. Manage-ment books and case studies that have traditionally

playeda central role in business school teaching canbe seen as repositories of these corporate narratives.They are often based on clear-cut distinctions be-tween success and failure (Pfeffer & Fong, 2002;Raelin, 2009); they influence how we learn to makesense of successes and failures and are pivotal inmanagement education and managerial practice.Management booksandcase studies that focuson

success or failure stories provide ideas that man-agement can theoretically use to renew their ownstrategic practices (e.g., Alfalla-Luque & Medina-Lopez, 2009). However, critical voices have notedthat these publications’ prescriptions may containmajor cognitive and methodological biases(Denrell, 2003; McLaren & Mills, 2010). Overall, theliterature on the rhetorical and discursive aspects ofthe presentation of corporate success and failure

The authors are listed in alphabetical order.We gratefully acknowledge the comments of Kimmo Ala-

joutsijarvi, Jari Ojala, Jukka Luoma, Kalle Pajunen, and HenrikkiTikkanen. We also wish to thank Jarmo Taskinen and SandraLubinaite for research assistance. Arjo Laukia contributed greatlyto the earlier versions of the paper. This research project has beenfunded by the Academy of Finland.

2

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http://dx.doi.org/10.5465/amle.2013.0177

highlights the political and contested nature of suchdiscourses (e.g., Hegele & Kieser, 2001; Kieser &Nicolai, 2005). “Reading managers” are exposed toa host of explanations for successes and failures(Pfeffer & Sutton, 2006), reflecting the views of cor-porations that seek to control their legacy (Kuhn,2008; Boje, Rosile, Durant, & Luhman, 2004) andmanagement fashions that make some stories moreplausible than others (Abrahamson & Fairchild,1999).

Learning from the successes and failures of othercorporations has its problems. In particular, re-search on social psychology suggests that makingsense of performance necessarily involves bias. Forexample, causal attribution theory predicts thatpeople have a tendency to take credit for successesand to blame either external factors or others forfailures (Heider, 1958/2013; Kelley, 1973; Weiner,1985). Management scholars have also examinedand found evidence of such tendencies (Gooding &Kinicki, 1995; Salancik & Meindl, 1984; Vaara, 2002).Although most of the research has focused on self-attributions, it has also examined such tendenciesin the media (Mantere, Aula, Schildt, & Vaara, 2013).However, with a few exceptions (Mantere et al.,2013), there is a lack of understanding of how spe-cific parties such as the managers themselves, themedia, and researchers differ in their constructionsand explanations of success and failure. We alsolack understanding of how such framings and at-tributions change over time.

In our work here, we focus on the framing and at-tributions of success and failure in themanagementliterature. Although we draw from the insights ofattribution theory and related findings, we usea discursive approach to elucidate important ten-dencies in making sense of success and failure (seeBrown, 2000; Mantere et al., 2013; Vaara, 2002). Wefocus on the framings of success and failure andtransitions between the two. We examine howsomething is labeled a success or failure and howthe narrative attributions of success and failure areexplained in the accounts of different actors. Thisallowsus to developanunderstanding of the varietyof ways that specific instances of success and fail-ure are constructed and dispersed through popularmanagement literature and the media.

Our research object is the Finland-based telecomgroup, Nokia. That company can be seen as a re-velatory case that allows us to examine both thepredominant framing and explanations of successrelated to its rise to become a leading global playerin the 1990s and 2000s and its fall—in the narrative

sense—in the late 2000s and early 2010s. Our anal-ysis is twofold. First, we study how the managersthemselves, the media, and researchers developedexplanations for the group’s success. Second, we ex-amine how some of these same actors accounted forthe group’s failure inmore recent years, what types ofnarrative attributions were involved, and how thetransition between success and failure took place.Our analysis points to the central role of strategic

leadership, organizational capabilities, organiza-tional design, and environmental discourses in theaccounts of both success and failure. It revealsa striking black-and-white picture in which the ac-tual framings and narrative attributions differ dra-matically from each other in periods of both successand failure. We propose the use of “metanarrative”as a concept to refer to the overall intertextual to-tality of narratives that jointly constitute a widelyspread and institutionalized understanding of thesuccess or failure of a corporation and its explana-tions. We find that such metanarratives can becharacterized by cognitive and political discursivetendencies, which provide a problematic basis formanagerial learning and education.

THEORETICAL BACKGROUND

Success and Failure AccountsAs a Basis of Learning and Education

Stories of successes and failures of well-knowncompanies are at the core of the de facto readinglists of practitioners interested in their own pro-fessional development. Most managers do not, forexample, readarticles in theAdministrativeScienceQuarterly or books from theOxford University Press(cf. Kieser & Leiner, 2009). Instead, their independentlearning and self-education are based on hetero-geneous materials offered, for example, by thebusiness press (Pfeffer & Sutton, 2006) and popularmanagement books (Furusten, 1999). Moreover, dueto the extensive use of cases in management edu-cation, business school studentsareno lessexposedto success and failure stories. However, as somescholars have argued (Denrell, 2003), managementbooks and articles based on individual cases andexamples can have a potentially problematic role inmanagement learning.In general, the research literature views the pro-

liferation of these success or failure narratives inpopular management books, Harvard-style cases,company histories, and other forms of narrativematerial as either a problem that inhibits effective

2016 3Laamanen, Lamberg, and Vaara

management and management learning (e.g.,Pfeffer & Sutton, 2006; Rosenzweig, 2009), or a sign ofthe political and contested nature of managementdiscourses (Kieser, 1997). For example, the classicstudy by Barley and Kunda (1992) reveals how vari-ous ideologies of control coevolve with contextand practice. On the other hand, scholars study-ing management trends and popular managementbooks assume that trends arise in a sequentialmanner (i.e., each new one replacing the previousone; Abrahamson & Fairchild, 1999; Benders & vanVeen, 2001). Recent researchhasviewedmanagerialdiscourses as a contested terrain in which manydifferent types of “success” or “failure” narrativescompete for attention and influence among practic-ing managers (Scarbrough & Swan, 2001). In thissense, consumers of these narratives have thefreedom to choose from a variety of potential nar-ratives of success and failure.

We are not concerned here about the use or con-sumption of success formulas (i.e., the managerswho read management books and articles; cf.Kieser, 1997). Instead, we are interested in thequestion of who produces these stories and whatkind of narrative attributions they reflect. Unfortu-nately, studies on management literature, such asthe seminal article by Barley and Kunda (1992), havenot been very focused in the question of authorshipand insteadhaveconcentratedmoreon thestructuraldeterminants of the dominant managerial ideolo-gies. An interesting exception is Furusten (1999), whostudies Swedish management scholars from a bio-graphical perspective. In analyzing the work andbackground of Richard Norman and others, Furustenadopts an institutional perspective that emphasizesthe author as amediator betweenmanagement textsand the wider institutional environment.

Another noteworthy exception is the nascent re-search on corporatemyths. Kuhn (2008), for example,studies the proactive and purposeful manner inwhichGMparticipated in the textual construction ofits public image. Similarly, Boje and his colleagues(Boje, Rosile, Durant, &Luhman, 2004) studyEnronasa multilayered, dramatized story-telling organiza-tion. They use Boje’s (1995) earlier research on WaltDisney’s role as an active participant in the buildingandmanipulation of the Disney Corporation’s legacy(see also Hegele & Kieser, 2001) as a framework tounderstanddiscursivedynamics indifferent contexts.Generally, however, management-learning researchhas given scant attention to authorship in its discur-sive sense. Thus, we have only scattered knowledgeabout the extent of authorship in the claimsmadeby

management books and articles about successesand failures. In particular, we lack empirical evi-dence and theoretical insights to explain attribu-tional and political tendencies in the discourses ofsuccess and failure.

Discursive Construction of Success and Failure

Several strands of research have provided insightinto how success and failure are constructed andexplained. In particular, attribution theory predictsthat people attempt to understand the causes ofprior events tomake sense of their own performanceand to manage the future (Heider, 1958/2013; Kelley,1973;Weiner, 1985). This involves biased tendencies,such as taking credit for success and blaming exter-nal factors and other actors for failure. For example,research in sports and educational psychology hasfocused on how athletes and students attribute theirsuccesses and failures to different causes and foundclear biases (Si, Rethorst, & Willimezik, 1995; Bond,Biddle, & Ntoumanis 2001; Gernigon & Delloye, 2003;Locke, 2004). Such tendencieshavealsobeen found inthe management literature (Bettman & Weitz, 1983;Salancik & Meindl, 1984; Fiol, 1995; Tsang, 2002).However, these tendenciesmaynotbeasclear-cut asthe attribution theory would seem to suggest. Forexample,Mantere et al. (2013) find that attributions tofailure may be of various kinds and serve differentfunctions with respect to the emotional process ofgrief recovery (Shepherd & Cardon, 2009) and thecognitive process of self-justification (Kieser &Leiner, 2009, 2011; Staw, 1981).Although the bulk of this research has focused on

managers’ own attributions, recent research hasexamined the causal attributions made by externalparties. Wagner and Gooding (1997) find that whenmanagers receive equivocal information about theirown performance, they tend to associate successwith the organization and failure with the environ-ment. However, when they receive a similar type ofequivocal information about others’ performance,they tend toassociate thepositive outcomeswith theenvironment and the negative ones with the orga-nization. Similarly, Haleblian and Rajagopalan(2006) argue that causal attributions by boardmembers regarding the causes of success or failureinfluenced their decisions to replace theCEO. Theseauthors found that the more independent the boardmembers, the less likely they are to make self-serving attributions in favor of the CEO.External evaluations may also involve causal

ambiguity (Lippman&Rumelt, 1982; King, 2007), and

4 MarchAcademy of Management Learning & Education

informational, cultural, and other situational biasescan characterize the sense-making dynamics of ex-ternal observers (Tsang, 2002). Rindova and hercolleagues have extensively studied the effects offirm–constituent interactions on firm reputation(Rindova & Fombrun, 1999; Rindova, Williamson,Petkova, & Sever, 2005; Basdeo, Smith, Grimm,Rindova, & Derfus, 2006; Rindova, Petkova, &Kotha, 2007) and identified the antecedents andconsequences of corporate “celebrity status”(Rindova, Pollock, & Hayward, 2006). These authorsargue that there may be multiple intertwined, self-serving biases in the media, because the mediacreates a dramatized reality when reporting on in-dustry change and corporate actions.

Also important, in recent years, scholars havebecome increasingly interested in the discursive ornarrative aspects of success and failure (Brown,2000; Mantere et al., 2013; Vaara, 2002). For example,Brown (2000) examines how people accused ofquestionable arms deals addressed these accusa-tions by using self-deception, hypocrisy, andscapegoating. Vaara (2002) studied how managersconstructed success and failure in their retrospec-tive narrative accounts of mergers and acquisitionsand demonstrated how existing discourses providea variety of means for sense making. Mantere et al.(2013) examine how managers, owners, employees,and the media made sense of entrepreneurial fail-ure by identifying specific narrative attributions:catharsis, hubris, betrayal, and mechanistic expla-nations. Although mainstream sociopsychologicalresearch on attributions has relied on experimentsor surveys to establish cognitive patterns, the dis-cursive approach focuses on the linguistic aspect,which allows examination of how successes orfailures are framed and how success or failure canbe explained in actors’ narrative accounts. Thisapproach is useful because it enables us to examinenot only the constructions of success and failure byfocal actors such as managers, but also how otheractors, such as experts or the media, make sense ofsuccess and failure.

RESEARCH METHOD AND ANALYSIS

To understand how managers and other actorsmake sense of success or failure, we studied publi-cations that focus on the Nokia Corporation. Nokiaprovides a revealing case for our analysis for sev-eral reasons. First, as a pioneer in mobile tele-phones that became the global market leader in thelate 1990s, Nokia has attracted attention from book

authors, academics, historians, business scholars,and others interested in the corporation’s “successformula.” Later, at the end of the 2000s, the corpora-tion faced a crisis that led to a new discussion—thistime describing and explaining the company’s fail-ure in and exit from the mobile telephone business.Second, the existence of a large number of publica-tions of both Nokia’s success and failure enabled usto identify a corpus of Nokia-specific literature andto collect the extensive material needed for discur-sive analysis. Third, Nokia is also an important re-search topic due to its symbolic position in Finnishsociety. Although Nokia has received global atten-tion, the consequences of its success and failurewere most important in Finland, where it had be-come a symbol of professional management andinnovativeness (cf. Lamberg, Laukia, & Ojala, 2014).When Nokia became the opposite, the societal ef-fects of that transformation were magnified be-cause Nokia’s oft-imitated (especially by publicorganizations) management practices were sud-denly questioned.Our analysis focuses on two distinctive periods in

Nokia’s history: (1) its strategic turnaround and riseto a leadership position in the mobile telephone in-dustry in the 1990s; and (2) the erosion of its mar-ket leader position after 2006 as a consequence ofregime-changing business model innovations byApple, Samsung, and Google. Figure 1 below pro-vides an overview of not only the key turning points,but also the publications explaining Nokia’s suc-cess and failure. The research design allows us tocompare the explanations of success with those offailure. Although Nokia represents an extreme casethat does not lend itself to empirical generalizability(Mahoney & Goertz, 2006), it has the potential to en-hance our theoretical understanding of the framingof success and failure and the different narrativeattributions.

Data Collection

The first step in our research process was to collecta comprehensive list of the publications regardingNokia and its contemporary history. The goal was tofind all the books and articles on Nokia that hadbeenpublishedboth in Finlandand internationallysince the 1990s. We searched for Nokia-relatedpublications by using standard reference data-bases containing articles and book listings froma wide variety of publications (see Appendix 1).We selected items for inclusion in the study that(1) in some way addressed Nokia’s turnaround


and success in1989–2000 (cf.Aspara,Lamberg,Laukia,& Tikkanen, 2011) or Nokia’s market erosion in themobile-telephone business in 2006–2013; and (2)contained text that addressed Nokia’s success orfailure in narrative format. We omitted publicationsthat consisted of statistical and other types of formalanalyses (e.g., Keil, McGrath, & Tukiainen, 2009).

We identified, read, and carefully examined 81relevant publications. This was an iterative pro-cess involving several encounters with scholarsstudying Nokia and Nokia managers monitoringNokia-specific literature.Webelieve that our list of81 books and articles is close to the total pop-ulation of published texts in narrative format onNokia’s evolution from 1990 to 2014 and even if wemissed some texts, 81 publications representssuch a large amount of material on a single casethat we can relatively safely assume that addingfurther publications would have added only mar-ginal value.

To complement our data collection, we alsosearched for texts in newspapers and nonacademicjournals. Althoughwe assume that published booksand articles contain more variation in terms of thecontent of their success formulas, we recognize theimportance of media discourse on corporate self-reflection. However, newspaper journalists need toreact quickly to ongoingprocesses,which caneasilyresult in a high degree of homogeneity in their in-terpretations (Zhong & Newhagen, 2009). For thisreason, we focused only on media texts that includedirect quotes from interviewees or in some cases,from journalists themselves. This part of the re-search process was important because many of thebook writers reacted in 2013 when Nokia’s mobile-telephonebusinesswas sold toMicrosoft. Therefore,the collection of media quotes allowed us to trackpossible author-specific changes in discursivesense making when the discourse changed fromsuccess to failure.

GoogleacquiresAndroid andstarts rumorsof its mobilestrategy

Olli-PekkaKallasvuobecomespresidentand CEOof Nokia

Nokia reaches 40%market share inmobile phones

Apple iPhoneis launchedto the market

Nokia’s brandthe 5th valuablein the world

NokiaacquiresSymbianfoundation

Nokia’sfinancialperformancestarts todeteriorate

StephenElopbecomesCEO ofNokia

Elop’sburningplatformspeech

Nokia loses itsposition as thelargest handheldmanufacturer toSamsung

MicrosoftacquiresNokia’s mobilephone division

A host ofpublications

Jorma Ollila’s memoirscritical to Kallasvuo’s eraaccompanied by a host ofother critical publications

Juhani Risku’sbook is the firstopenly criticalNokia publication

Shift of discourse to reasons of failure

Publications elaborating Nokia’s success

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Mikko Kosonen’s and YvesDoz, book uses Nokia as anexample of an agile company

Dan Steinbock’s book framesNokia as an example of globalcompetitiveness, thelast success book of its kind

Nokia unveilsa strategicpartnershipwith Microsoft

First Andriodphone tothe market

FIGURE 1Nokia Timeline and the Transition From Success to Failure Discourses


Data Analysis

Ouranalysiswasabductive innature (Locke,Golden-Biddle, & Feldman, 2008) and proceeded in stages.Once we had gathered all the material, we searchedthe texts for discursive framings and attributions ofsuccess and failure. This phase was crucial becausewe needed to decide which text segments to includein our database. We focused on sentences that hadadirect causal proposition regardingNokia’s successor failure. Another alternative would have been toanalyze the text quantitatively (e.g., Duriau, Reger, &Pfarrer, 2007). However, becausewesought to identifytheprocesses of discursive framingsandattributions,quantitative analysis would not have sufficed.

We searched the texts for attributions of successand failure. We identified 625 narrative attributionsby using a thematic analysis and iterated rounds ofintensive interpretative readings. In most cases,identification of the arguments was relativelystraightforward because the texts used standardlanguage (either Finnish or English), and the causalarguments played a central role in the texts. Afteridentifying the 625 arguments, we listed their at-tributions and illustrative inserts in an Excelspreadsheet.

Wealso collected informationabout theauthors ofthe texts. To identify their professional and educa-tional backgrounds, we performed a biographicalsearch using academic and professional calendars(e.g., “who’s who” types of publications), websearches, and interviews with Nokia researchers.Accordingly, all the attributions were coded andassembled into a table that included details abouttheir respective authors, availability of primarysources, and publication dates. We also coded whenthese attributions were made with the aim of obtain-ing an accurate representation of how narratives ofNokia’s success and failure evolved over time.

At the next stage of the analysis, we used the 625attributions for identifying four broad discursivecategories, which included both firm-endogenousfactors (strategic leadership, capabilities, and or-ganizational design) and firm-exogenous factors(the environment, including government and publicpolicies). These categories are also theoretical (cf.Corley & Gioia, 2004) and provide links to broaderacademic themes in the strategic managementliterature (cf., e.g., to the classification in Ramos‐Rodrıguez & Ruız‐Navarro, 2004).

After we had identified the four discursive cate-gories, two research assistants independently codedthe 625 narrative attributions. When coding, they

used Table 1 as a coding rule. The two codersreached consensus about the categories in 81% ofthe arguments. For the remaining arguments, weused the following procedure. First, twomembers ofthe research team and a third research assistantcoded the attributions on which we disagreed. Afterobtaining five competing lists of codes,weallocatedattributions to the categories that were the mostpopular among the five coders. Ultimately, onemember of the research team (who had not con-ducted any coding) checked the categorization ofthe disputed arguments. No changesweremade atthat point.This led us to develop an understanding of the

specific discourses that the texts used tomakesenseof success and failure and their explanations. Wethen analyzed these discourses more carefully interms of how success and failure were framed andattributed. This helped us to better understand notonly the characteristics of the various alternativeaccounts, but also how they collectively constitutedthe metanarrative of success and later failure.1

Table 1 reports the coding rules.To examine how the transition from success to

failure narratives occurred over time and how thenarratives differed among the different authortypes, we also coded the relative weights that thedifferent author types (journalists, governmentpublic policy researchers, academics, and formerNokia managers) placed on the different explana-tions of success and failure. We did this by codingthe success and failure discourses according to thedifferent author types and by examining the relativeuse of the different discourses by each author type.(Appendix 3 provides the relative prevalence of thedifferent discourses according to each of the fourauthor types.)When the success narratives transformed into

failure narratives, the four discursive categoriesremained the same, but the relative importance thatthe different authors placed on the different cate-gories changed. The figures in the Appendix showthis change in emphasis. Also of interest, all theauthors of the different Nokia publications reducedtheir assessment of the influence of the externalenvironment on Nokia’s performance; that is, all the

1 Metanarrative is a concept sometimes used to denote societalnarratives, such as modernism, that explain the overall devel-opment of society. We use this term more restrictively to refer tothe totality of the overall intertextual narratives that togetherconstitute awidely spreadand institutionalizedunderstandingofthe success or failure of a corporation and its explanations.


TABL

E1

Cod

ingRules

Disco

urse

Succ

ess

attributions

’

distribu

tion

(%)

Failure

attributions

’

distribu

tion

(%)

Attribu

tion

focu

sSimilar

them

esin

theo

retica

lliterature

Succes

sattributions

exam

ples

Failureattribution

exam

ples

Man

agerial:

Strategic

lead

ersh

ip

33.6

37.3

Attribu

tion

sfocu

sing

onlead

ersh

ipqu

alities;

exec

utivede

cision

s;top

man

agem

enttea

missu

es;a

ndmiddle-man

agem

ent.

Upp

erec

helontheo

ry:

lead

ersh

ip;d

ecision

mak

ing.

“Ollilamay

have

been

prec

iselywha

tthe

compa

nyne

eded

...firm

andflex

ible

vision

s,ca

lmne

ssto

survive

thepres

enta

ndbo

ldne

ssto

look

tothefuture”(Steinbo

ck&Po

rter,199

8).

“W

hentheco

mpa

nyha

dstartedto

fail,the

nece

ssary

chan

gesto

theGEB

were

notm

ade”

(Risku

,201

0).

Indica

tesex

actd

ecisions

mad

eby

lead

ers,ex

ecutives

,tea

ms,

man

agem

ent.Dec

isions

that

have

morethan

onepo

ssible

option

.

“Either

therewas

note

noug

hco

nsiderationforthene

eds

ofthecu

stom

eror

thos

ene

edswereno

tmet”(O

llila

&Sa

ukko

maa

,201

3).

Organ

izationa

l:Des

ign

10.3

23.7

Attribu

tion

sfocu

sing

onorga

niza

tion

alstructure;

culture;co

rporatego

vernan

ce.

Func

tion

s;ac

tion

patterns

ofco

rporation’sinside

system

;ex

clud

ingthos

elink

eddirectly

withthesk

ills;

know

ledg

e;or

know

-how

ofco

rporation’sac

tors

(then

“ca

pabilities

”).

Organ

izationa

ldes

ign;

configurationa

lap

proa

ches

tostrategy

;orga

niza

tion

alcu

lture;

continge

ncytheo

ry;

institutiona

lthe

ory;

system

thinking

.

“[The

]con

scious

and

continuo

usthinking

abou

ttheco

mpa

ny’sstructureis

cons

idered

anim

portan

tinno

vation

equa

ltoits

prod

uctinn

ovations

”

(Cas

tells&Him

anen

,2002).

“Nok

ia’scu

lturewas

too

tech

nica

llyoriented

”

(Risku

,201

0).

Organ

izationa

l:Cap

abilities

18.5

29.8

Attribu

tion

sfocu

sing

onsk

ills;

know

ledg

eas

antece

dents;

obstac

lesforissu

esto

realize.

Skills;cap

abilitiesof

corporationno

tdirec

tly

structural

(i.e.,p

arto

f“orga

niza

tion

alde

sign

”).

Des

cribeon

efeatureof

corporationim

portan

tfor

succ

ess.W

ith“failures

,”po

ssible

tose

eargu

men

tspo

sitive

ly,i.e.,en

gage

inco

unterfac

tual

reas

oning.

Cap

abilities;

orga

niza

tion

alroutines

;kn

owledg

e-ba

sed;

orga

niza

tion

al;

learning

;res

ource-

base

dview

.

“W

hath

asmad

eNok

iadistinctiveam

ongits

contem

poraries

isthefact

that

itha

sco

nsistently

focu

sedon

mas

tering

thefull

valuech

ain,

from

operations

andne

wprod

uct

deve

lopm

enttomarke

ting

,sa

les,

andse

rvice”

(Steinbo

ck,2

001).

”Nok

iaso

ldde

vice

s,App

leso

ldlifestyle”

(Cord,

2014).

“Finn

s[in

theco

mpa

ny]d

idno

tund

erstan

dor

couldno

tha

ndle

thene

wworld

very

well(Ollila&Sa

ukko

maa

,20

13).

“Actions

ofthehigh

est

man

agem

entw

eretoo

amateu

rish

”(Risku

,2010).

External:

Environm

ent

37.6

9.2

Attribu

tion

sfocu

sing

onforces

;proc

esse

staking

plac

eou

tsidefoca

lcorpo

ration

but

determ

iningop

portun

ity

spac

e.

Evolutiona

rytheo

ry;

institutiona

lthe

ory;

stak

eholde

rtheo

ry.

“...Finn

ishprac

ticality

and

persev

eran

ceas

wella

sthe

ability

totake

person

alresp

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author types regarded the discourse relating to theexternal environment as relatively more importantwhen explaining Nokia’s success than when ex-plaining Nokia’s failure. This is noteworthy whenconsidering thatNokiamight nothave failedhad thecompetitive situation not have changed because ofApple and Google. In contrast, most of the authorsregarded discourses related to the internal organi-zation design and strategic leadership as more rel-evant to explaining Nokia’s failure than its success.Consistent with attribution theory, only the formerNokia managers assessed that strategic leadershipplayeda less important role inNokia’s failure than itplayed in Nokia’s success. However, even formerNokia managers tended to emphasize failures as-sociated with strategic leadership when assessingeach other’s behavior.

Last, the analysis of the author types shows that assuccess narratives transformed into failure narra-tives, the authors with an academic backgroundchanged their assessments the most. The govern-mental public policy researchers revised their as-sessments somewhat less, the journalists even lessthan that, and the former Nokia managers revisedtheir assessments the least. Thus, the academicsseemed to be the most sensitive to changing the cat-egories according to which they assessed successesand failures, whereas the former Nokia managersseemed to be more conservative and used mostly thesame discursive categories when explaining bothsuccess and failure.

SUCCESS DISCOURSES

Nokia had been one of the largest Finnish compa-nies since the 1960s and was a large company eversince its 19th-century founding as a paper-industrycompany. However, the framing of Nokia as a suc-cess story became more widespread in the Finnishcontext only in the mid-1990s alongside Nokia’s in-creasing international reputation. First, Nokia’srapid international success catalyzed a series ofpublications focused on explaining the reasons forthat success. For example, in 1996, a group of busi-ness scholars, historians, and innovation re-searchers publishedaneditedbook that specificallyasked “Miksi Nokia, Finland”—that is, “Why Nokia,Finland?” (Lemola & Lovio, 1996). The academiccommunity was characteristically motivated to findanswers to the mystery of why Nokia was the spe-cific company from Finland that was able to reacha position in the international market, in contrastto more predictable winners such as Motorola and

Ericsson. Second, managers who worked at or wereclose to Nokia published a series of doctoral dis-sertations based on Nokia’s evolution (e.g., Ala-Pietila, 1992; Kosonen, 1992; Pulkkinen, 1997). Thosepublications theorized the formula of Nokia’s suc-cess inanacademically credibleway, thusaffectingthe discursive position of Nokia as a professionallymanaged international firm. After this first seriesof publications, Nokia became an example of thesuccessful coevolution of innovation policy andfirm-level capabilities (e.g., Paija, 2001b); a case toexemplify different aspects of successful manage-rial practice (e.g., Steinbock, 2010; Laaksonen et al.,1998); and a topic in academic historical research(especially Haikio’s official history of Nokia) andpopular books (e.g., Bruun et al., 1999).Although the first wave of literature was not nor-

mative, it worked effectively to create a myth ofNokia’s history and superb managerial capabilities.The influence ofNokiaand themytharound its historyresulted in it becoming the dominant model of pro-fessional management in Finnish society in the late1990s and 2000s (practically until the “burning plat-form”speechbyStephenElop).Overall,Nokiabecamea synonym for superior management in Finland,which partly explains the discursive dynamics in itssuccess explanations. We next elaborate on the dis-cursive tendencies in the framings and attributions ofsuccess and failure, assigning various success orfailure attributions to four discursive categories: (1)strategic leadership, (2) organizational design, (3) ca-pabilities, and (4) environment.

Discursive Category 1:Strategic Leadership

Theactionsof individualexecutivesconstituteamajorgroup of explanations for Nokia’s rise to global domi-nance in the telecommunications industry. For ex-ample, Bjorn Westerlund, Nokia’s former CEO, iscredited for his caution toward the fast-growing So-viet trade that existed at that time. Years later, thiscautionwas seenasapositive factor for performancewhenNokia’s geographically balanced internationaltrade saved the company from the effects of the col-lapse of the Soviet Union. Furthermore, other authorsargue that Nokia’s entry into the electronics and ra-diotelephone industries would not have been possi-ble without the patience of Westerlund and otherNokia directors, who believed in the nascent di-visions and their potential:

Nokia’s current strong position in the telecom-munications industry canbeattributed to Bjorn


Westerlund. He had faith in the future of elec-tronics and allowed the continuously unprofit-able unit to continue operations for years(Maenpaa & Luukkainen, 1994).

Kari Kairamo, the company’s CEO from 1977 to1988, is also acknowledged in many texts as an im-portant contributor to the company’s success. He isseen as a charismatic and extroverted personalitywho acted as the driving force behind Nokia’s initialinternational expansion and as an avid supporter ofa flexible, dynamic, and constantly learning orga-nization. Jorma Ollila was Nokia’s CEO when thecompany turned around in the 1990s from nearbankruptcy to extraordinary growth. Ollila’s finan-cial expertise was seen as crucial in the company’srise from failed conglomerate to successful telecom-munications company. Moreover, many accountsglorify Ollila’s personality and skills as the sourcesof Nokia’s success. Whether it is Ollila’s publicpresentations (Sokala, 2002), organizational skills(Bruun, Wallen, & Hyrkas, 1999), innovativeness(Castells & Himanen, 2002), vision (Steinbock &Porter, 1998), or negotiation skills (Steinbock, 2001),many authors recognize him as a major contributorto Nokia’s success story.

In addition to management personality-relateddeterminants, management’s key actions and strat-egies were also identified as important successfactors. For example, Nokia’s successes in acquisi-tions were attributed to management foresight.Various texts argue that Nokia’s acquisitions ofSalora and Televa were crucial to the company’ssuccess because they brought competences in mo-bile telephony and consolidated the development ofFinnish communications equipment under Nokia’sroof.Others claim thatNokiawaswise toacquire theU.K.-based Technophone at the beginning of the1990s because by doing so, Nokia gained criticalproduction competences and an important footholdin the French and Italian markets. We also foundargumentsemphasizing thatNokia’s involvement inthe electronics business and the company’s focuson the emerging mobile communications businesswere riskymanagement decisions that turned out tobe beneficial for the company. Steinbock (2001: 39)describes these strategic decisions by Nokia’s man-agement as follows:

Again and again in the course of its history,Nokia has seized opportunities to enter newand exciting businesses characterized by highrisk but great promise for growth.

It is noteworthy that authors representing Nokia’sformer management tend to emphasize the role ofstrategic leadership and organization design and toplay down the role of external factors, such as thebusiness environment. In a presentation of hisbook, Mikko Kosonen (Doz & Kosonen, 2008a), a for-mer chief strategy and technology officer of Nokia,commented on the role of management in Nokia’ssuccess, summarizing the overall feelings of ex-Nokia managers by stating that “there were onlya handful of people and key decisions responsiblefor Nokia’s success.”The high importance placed on strategic leader-

ship is consistent with the core argument of the at-tribution theory, according to which managers havea tendency to bias their sense making of successfactors according to their own actions and the orga-nization that theyhavebuilt. However, theattributionof the role of strategic leadership quickly changedfrom positive to negative when the performance ofNokia started to deteriorate, as we report in the con-text of failure discourses.

Discursive Category 2:Capabilities

Although Nokia was founded as a pulp and papercompany in 1865, its first large-scale organizationalchange occurred in 1966 when it merged with twoindustrial companies of the same age (the FinnishRubber Works founded in 1898 and Finnish CableWorks founded in 1912). Several authors argue thatthe resulting conglomerate formed the basis for to-day’s Nokia by providing the needed critical mass,certain useful capabilities in theareas of electronicsand radiotelephony from the Finnish Cable Works,and important customer relationships, especiallywith the Soviet Union.Some authors argue that Nokia’s early capabil-

ities in telecommunications were boosted bya public bid for the supply of radiotelephones to theFinnish Defense Forces in 1972, which resulted inthe company’s involvement in the electronics in-dustry. These capabilities were developed throughvarious phases into technologies such as theDX200digital exchange product, which later became thebackbone of Nokia’s mobile network technologyand its most successful early network product.Overall, the DX200 exchange system is seen asa defining step in Nokia’s involvement in mobilecommunications because that product, along withrelated new skills and knowledge, opened new in-ternational markets for Nokia.


Many authors argue that some of Nokia’s mostimportant breakthroughs were its involvement intwo mobile telecommunications standards—theNordicMobile Telephone (NMT) and a decade later,the Global System for Mobile Communication(GSM)—and the development of associated capa-bilities. Accordingly, Nokia gained considerableadvantages frombeing involved in the formation ofthese standards, especially theGSM.Manyauthorscontend that the pan-Scandinavian NMT standard,introduced in 1981, gave Nokia a highmarket sharein the world’s largest uniform mobile-telephonenetwork, and as such, provided the company witha unique testing ground, a first-mover status inthe industry, and a belief in the future of mobiledevices.

A decade later, the GSM standard emerged whenthe first call from a Nokia telephone was made inFinland in 1991. Several texts suggest that Nokiagambled by developing capabilities based on theGSM standard while involved in its formation.These texts argue that as the mobile telephonemarkets began to grow in the 1990s, the Nokia-backed GSM standard soon became widespread,which benefited Nokia immensely.

Other capability-related drivers have also beenproposed as sources of Nokia’s success. Some au-thors argue that Nokia’s high levels of research anddevelopment gave the company an advantage overits competitors. Moreover, other authors portrayNokia’s mastery of the value chain as a source ofcompetitive advantage. Last, the technological di-versity of Nokia’s involvement in the varying mo-bile technology standards is also identified as animportant aspect of Nokia’s international growthand success. Various texts also portray Nokia’sbrand management as one of the company’s mostimportant success factors. The importance of thecompany’s brand can be seen in the followingextracts:

Nokia has highlighted the life-style feature ofcommunications in its brand building - a strat-egy that explains an important share of itsbreakthrough. (Paija, 2001a)

Nokia had products for every consumer onthe planet . . . we avoided pushing the samemodel everywhere. Instead we tailored ourproducts to meet the local expectations andchanging consumer habits. Andwewere veryoften successful in that. (Ollila & Saukkomaa,2013: 466)

Discursive Category 3:Organizational Design

Several authors argued that Nokia’smanagement keptthe company’s processes flexible and dynamic, whichmadeNokia better able than its competitors to confrontchallenges. Furthermore, many authors stated that thecompany’s extensive collaboration with its network inboth production and R&D resulted in superior perfor-mance, efficient logistics, andamodern,well-managedsupply chain. In addition, Nokia’s culture was de-scribed in many texts as atypical, and many con-sider that a part of Nokia’s success. Various authorsdescribed Nokia’s culture as ranging from humble(Bruun, Wallen, & Hyrkas, 1999) to innovation- andinitiative-driven (Steinbock, 2001; Lemola, 1996);to continuous learning-centered (Koivusalo, 1995;Castells & Himanen, 2002). The following passageillustrates the admiration for the continuous-learningorientation of the company:

[The] conscious and continuous thinking aboutthe company’s structure is considered an im-portant innovation equal to its product in-novations (Castells & Himanen, 2002: 132).

Jorma Ollila (Ollila & Saukkomaa, 2013), for ex-ample, argued thatNokia’s strengthwas its effectiveintraorganizational communication and the com-pany’s values, strategies, and vision, alongwith thequick dissemination of everyday information in aneasily accessible manner throughout the company.Last,manyauthorsargued that oneof thekey factorsin Nokia’s successwas themastery that it displayedin international expansion. Nokia was able to rap-idly expand internationally, thereby acquiring first-mover advantages in many emerging markets andbenefiting from economies of scale that would havebeen unattainable in its small home market.

Discursive Category 4:Environment

Authorswith a background in economics andworkingin research institutes were especially focused onpublic policy and emphasized the environment—bothmarket and regulatory—as an important, if notdecisive, factor in Nokia’s success. For example,many texts mentioned the early importance of theFinnish government and the state-owned publictelecommunications operator (PTO), Telecom Fin-land, in Nokia’s success. In addition, many authorssaw the PTOasa sophisticated anddemandingleadcustomer forNokia. ThePTOwas seenasan important


driver behind Nokia’s involvement in the Scandina-vian NMT mobile standard, which was regarded asa cornerstone of the company’s success by manypublications.

Another explanation of success focused on the roleof Finnish government policy. The government’spolicies on competition and deregulation in the tele-communications sector were important for the evo-lution of the Finnish telecommunications cluster andNokia’s success. Furthermore, the liberalization ofthe Finnish capital market provided Nokia withforeign investmentat thestart of the1990s,whichwasnecessary to finance the company’s focus on tele-communications and the rapid growth that ensued.Various texts—especially by government-sponsoredscholars—portrayed public funding as an importantresource for the early development of radiotelephonyand later for R&D programs.

Someaspects of theFinnishmarket havealsobeenintroduced as plausible preconditions for the com-pany’s success.Unlikemost other telecommarkets inthe world, the Finnish domestic market lacks a mo-nopoly. Various texts argue that this gave Nokiaa sophisticated, technologically progressive, anddemanding home market that drove the company’stechnological expertise and innovation. Some au-thors also point to the importance of high mobiletelephone penetration rates in Scandinavia, espe-cially in Finland, which, they argue, gave Nokiaa valuable feedback loop that helped it to realize thepotential ofmobile telephonesasconsumerproducts.This attitudinal shift away from “yuppie” telephonesis described as immensely successful and as havingresulted in the most innovative products with ap-pealing designs.

Last, many authors also argue that Nokia’s accessto skilled people in its home country was importantfor the company’s success. Some claim that theFinnish people’s perseverance, determination, andopen-mindedness toward technology might havebeen a factor in Nokia’s success. On more than oneoccasion, the distinctly innovative culture of Finlandas an antecedent of Nokia’s success is compared tothe Kalevala—the Finnish mythic national epic:

In the Finnish epic Kalevala, a researcher andan engineer join their creative forces to helpthe hero. Together, these early innovators cre-ated the sun and the moon. Today, the task ofresearchers and engineers—along KalevalaRoad and elsewhere—is only slightly lessdaunting. Theywill have toworkwithdecision-makers to forge a new, sustainable way of life.

It’s clear that Finland, especially Otaniemi,will need to take a leading role in this effort(Himanen, Au, & Margulies, 2011).

Institutionalization of the Success Metanarrativeand Its Implications

Taken together, these various success discoursesconstituted an intertextual totality that reinforced theframing of Nokia as a success story and reproducedspecific attributions as generally held explanations.Characteristic of this discussion was that althoughthere were various viewpoints and attributions,Nokia’s success itself and its key explanations werenot contested. Instead, new narrative explanationsadded to the richness of Nokia’s success story but didnot challenge its key elements, such as the crucialrole of the top managers, Nokia’s capabilities, andFinland as a near-optimal innovation environment.The discussion thus led to the institutionaliza-

tion of Nokia’s success story as a widely sharedmetanarrative. This is interesting per se; the meta-narrativebecamean inherentpartof thehypearoundNokia, and the metanarrative of success turned intoa canonical truth that almost no one dared question.Furthermore, this institutionalization also had im-portant consequences for learning, both inside andoutside the corporation. Specific positive versions ofNokia’s success were disseminated internally andused in internal training for new recruits. Externally,Nokia was increasingly used as a case example inboth the media and in management education. It isdifficult to estimate the exact impact of all this, butthe hype clearly had major consequences for com-panies and managers following Nokia’s example.Moreover, the absence of criticism must have madepeople less eager to challenge the company’s pre-vailing strategies and practices in the early 2000s.

FAILURE DISCOURSES

The transition from the institutionalizedmetanarrativeof Nokia’s success to that of its failure was rapid. Im-portant events included the company’s first quarterlylosses in 2009, Stephen Elop’s nomination as the newCEO, and Nokia executives’ flight to other corpora-tions. Stephen Elop’s (in)famous “burning platform”

speech and the widely shared news about Nokia’sdifficulties in meeting the competitors’ product offer-ings, which led to increasingly negative media dis-cussion in 2010. The first openly critical Nokia bookwas Risku (2010), and other publications followed suit.Some books and articles were clearly motivated by


former executives’ willingness to save their histori-cal legacy, which seemed to be the case, for exam-ple, with Jorma Ollila’s memoirs. Overall, whatfollowed was a discussion that was very critical.Although we found little criticism of Nokia in thebooks and articles that concentrated on the rise andsuccess of the company, the opposite was the casefor texts focusedon theproblems that emerged in themobile telephone business.2

Discursive Category 1:Strategic Leadership

Whereas in the explanations of Nokia’s success, keymanagers such as Kari Kairamo and his closest exec-utives or the “Dream Team” led byOllila were praisedfor success, in the failure explanations, the emphasiswas on blaming such individuals or their erroneouschoices. For example, Stephen Elop is seen by some oftheauthorsasnotonly incompetent,butalsomalicious;he was regarded as the mole or “Trojan horse” whodestroyed and sold Nokia’smobile telephone businessto Microsoft according to a predetermined plot:

TheyhiredaMicrosoft “mole”who forcedNokia toconvert to a new platform at the expense ofshareholders’money.Finally themolehanded therevamped and Microsoft-ready mobile phonesdivision to Microsoft on a golden platter(Anonymous financial sector expert, Talous-sanomat, September 11, 2013).

Other Finns were deeply bitter and enraged,and it was easy for them to find a target for theirire: Stephen Elop. During his two-year tenure inEspoo, he was ultimately responsible for a 62percent drop in Nokia’s stock price, a halving oftheir mobile phone market share, a precipitousfall in the smart-phonemarket share from 33 to 3percent, and a cumulative loss of €4.9 billion. Hewas dubbed “Stephen eFlop” (Cord, 2014: 282).

Nokia’s directors will go down in Europeanbusiness history as one of the most perversecrews to lead a major corporation in the post-war era (TeroKuittinen,Forbes,March 21, 2013).

A common explanation, especially among jour-nalists and financial sector experts, was that the

executiveshad failed. This criticism focused onbothcurrent and former executives. Thus, Nokia’s down-turn was seen as a series of wrong decisions: (1) theneglect of innovations and products that couldhave been triumphant; (2) the decision to invest inSymbian as the main software package; (3) de-cisionsnot to invest enough in Symbian; (3)Ollila’s2006 decision to promote Olli-Pekka Kallasvuo toCEO; (4) recruiting Stephen Elop as the newCEO in2010; (5) the decision to publicly denounce Symbiantelephones in Elop’s famous “burning platform”

speech on February 8, 2013; (6) the decision to aban-don Symbian and Meego and to choose Microsoftas an ally for smart-phone software; and (7) overallmistakes in strategy.An interesting feature in the narratives that em-

phasize strategic leadership as an antecedent of fail-ure is the personification of the corporation. In thetexts, Nokia was seen as corrupt, arrogant, lazy, slow,inconsistent, focused on internal competition, andthreatened. Two business scholars offered the fol-lowing interpretation: “Kallasvuo now sees that thecompany did not pay sufficient attention to the emo-tional undercurrents caused by internal competitionfor resources to developa vast array of phonemodels”(Huy & Vuori, 2014). Ex-Nokia executive Frank Nuovoemphasized the laziness and stagnation that resultsfrom the combination of normal corporate evolutionand large size:

I look back and I think Nokia was just a very bigcompany that started to maintain its positionmore than innovate for new opportunities . . .werealized at Nokia that touch was increasinglyimportant andwereworking toward doing it, butwhen a company is really busy holding on towhat it has built, it is difficult to put enough ofapush toward something sodrastically newandengender urgency in it (Frank Nuovo,AustralianFinancial Review, September 6, 2013).

Discursive Category 2:Capabilities

The capability-based failure arguments focusedon three categories: insufficient technologicalknowledge in the top management team, an in-correct approach to consumer marketing, and pro-ducts that were inferior to those of competitors.Many authors, especially ex-Nokia executivesand journalists, debated the question about theneed for technological knowledge among topexecutives:

2 There is one important exception to the overall criticism. Both ofthe historians who commented in themedia (Markku Kuisma andMartti Haikio) were quite optimistic about Nokia’s future withouttelephones.


There is no need for the CEO to be an expert insoftware development or technology. Instead,she or he must be passionate to learn the basictechnological logics; andwillingandcapable tofind the right people for the right positions.Nokiawasnotable to findmanagerswhowouldhave built it as a software company. Nokia wasphlegmatic and powerless with Symbian [. . .]when Pertti Korhonen left Nokia in 2006 thesoftware-specific understanding of business inthe top management team decreased dramati-cally (Ollila & Saukkomaa, 2013: 458).

According to the capability narrative, the lackof industry-specific knowledge on Nokia’s boardslowed down its responses to increasing competi-tionbyAppleandSamsungandenabledadoption ofElop’s new strategy. Some writers also saw thecombination of an inexperienced board (in the mo-bile telephone business) and Elop’s insufficientknowledge of the industry as the problem:

With the authority of a software expert, StephenElop was able to convince the top managementand team and Nokia board that Nokia must fo-cus solely on Microsoft phones. At the time, theboard of directors was in a transformationphase: Risto Siilasmaa was just starting andJouko Karvinen and Kari Stadigh came fromoutside the mobile phone business. However,Elop had the same problem. He knew softwarebutnot themobilephone industryand itshistory(Jukka-Pekka Raeste, Helsingin Sanomat, Sep-tember 3, 2013).

Most of the writers who participated in the publicdiscourse regardingNokia’s failure consideredNokia’sproducts inferior to those of Apple and Android.According to this explanation, consumers beganto prefer the products of competitors, and Nokia’scountermoves (e.g., E97) went badly wrong:

Thesoftwarewas inferior in termsof capacityanddesign; and the phone suffered from elementarytechnical problems. Anssi Vanjoki stated laterthat N97 was “a huge disappointment for the con-sumers’ quality expectations.” It was a polite wayof saying that N97was a total failure at amomentwhen Nokia should have succeeded and turnedcourse (Ollila & Saukkomaa, 2013: 456).

JuhaniRisku, anex-Nokiamanager,wasevenmorecritical regarding Nokia’s abilities:

Nokia’s biggest problem and at the same timethe problem of its brand strategy is that thebrand is not construct of products and services;it is built on a shallow marketing shell whichdoes not have a relevant link to product design,concept building, and fulfilling the needs ofindividual customers (Risku, 2010: 70).

Many of the failure explanations note that Nokia’sattempts to address the new digital environmentwent astray because of Symbian-related problems.Kallasvuo explained that “Symbian was an old op-erating system… to link newsolutionswasadifficulttechnological challenge. That was one reason whythe decision to adopt Microsoft was made; the in-terpretation was that it was impossible to continuewith Symbian” (InterviewwithOlli-Pekka Kallasvuo,Former Nokia CEO, YLE, September 7, 2013). Last,most of the failure narratives include an explanationaccording to which after achieving a dominant po-sition, the quality of Nokia’s products deteriorated.Nokia’sproductsweresimplyno longerasgoodas itscompetitors’ equivalent products and services.

Discursive Category 3:Organizational Design

In terms of organizational design, there is lessagreement among the failure narratives than thesuccess narratives. A typical example is the above-mentionedproblemwithSymbian,which isgenerallyseen as one of the system’s greatest shortcomings.However, other voices argued that Nokia’s internalsystemswere the reason that Symbian never fulfilledthecompany’sexpectations.Anex-Symbianengineeraccused Nokia’s leadership and the resource alloca-tion system of preventing Symbian’s rise:

It is a mistake to assume that the reasons whySymbian didn’t become the dominant mobileplatform were technical in nature or based onthe limitations of capability or design . . . theNokia leadership responsible for the Devicesunit’s execution of Symbian Open Sourceproducts and initiatives was told directly thatthe ecosystem (consisting of manufacturersand suppliers) andour effortswould falter ifwedidn’t have commitments to (1) relocate andimprovedeveloper tools under our openmodel,(2) to have an effective App Store strategy,e.g., not onehomegrownbyNokiaalone, and (3)to secure our operating budget. We asked fortheir direct support on all three . . . The Foun-dation and our ecosystem initiatives didn’t get


any support for those initiatives, despite sittingdown with the leadership at the key moment.Quite the opposite, the rugwas pulled out fromunder us at almost every turn (Interview withLee Williams, Forbes, September 3, 2013).

JormaOllila’s ownbook seesNokia’s organizationas a factor that was critical to decision making:

In spring 2009 I started to receive messagesfrom Nokia’s organization that the companywas not managed consistently. Issues startedto stack up, decision-making was slow, anddiscussion had been transferred to large com-mittees in which the focus was lost (Ollila &Saukkomaa, 2013: 457).

Apple’s Tim Cook echoed this interpretation inan interview by recalling that “Nokia’s internalbureaucracy inhibited efficient software development”(Interviewwith TimCook, BusinessWeek, September 3,2013). These statements related to the period beforeStephen Elop. Dan Steinbock, who has also writtenmany success books, went further by claiming thatElop’s new organization destroyed Nokia:

What followed was three years of massiverestructuring. It cut costs, as it had to, but itfailed to create revenues. Successful restruc-turing can reviveailing corporate giants, but inthe case of Nokia, it all went terribly wrong(Dan Steinbock, CNBC, September 17, 2013).

Finally, ex-Nokia managers argued that the in-centive structure and matrix organization togethercorrupted decision-making processes by erodingthe motivation of managers and channeling toomuch effort into organizational politics.

Discursive Category 4:Environment

Overall, the failure narratives report the changesoutside Nokia as fatal for the company. Perhaps themost thorough description of the environmentalchallenges faced by Nokia is that of researchersfrom a government-sponsored semipublic Finnishthink tank:

Up until the launch of Apple’s iPhone in 2007,and Google’s Android in 2009, Nokia andMicrosoft were indisputable leaders in theirown respective industries. Since then theywere both caught by the rapid convergence of

digital communications, information systems,consumer electronics, as well as software anddigital content of various sorts. This conver-gence broke the previously prevailing sectoralsilos and replaced them with a rapidly evolv-ing “Internet of everything world.” Both com-panies found themselves facing new andunknown competition, and were forced to de-sign new strategies fit for a newmarket regime(Ali-Yrkko, Kalm,Pajarinen,Rouvinen, Seppala,& Tahvanainen, 2013).

That same degree of environmental determin-ism also characterizes many other accounts. DanSteinbock, one of the most active Nokia authors,described Nokia’s fall as an adaptation problem:

Nokia didn’t just struggle to make betterphones in recent years. It struggled to adaptculturally to a new business environment. It’sdifficult to pinpoint precisely what culturalchanges were needed (Dan Steinbock, CNBC,September 17, 2013).

Similarly, Jorma Ollila accused Olli-Pekka Kal-lasvuoof not beingable to face competitivepressurefrom Apple: “[T]he biggest mistake was that Nokiaunder his (i.e., Kallasvuo’s) leadership was not ableto respond to the challenge of iPhone with a killerphone” (Ollila & Saukkomaa, 2013: 458).An interesting tendency among the failure narra-

tives is their emphasis of the unpredictability andextremely dynamic nature of the market and com-petitive environment, in contrast to the successnarratives, which emphasize Nokia’s ability tosense and manage the environment. An underlyingtheme in almost all of the failure narratives (in-cluding those in the strategic leadership category) isthat Nokia’s destiny was determined by externaldynamics. Framed like this, a summarizing “meta-narrative” becomes apparent: Due to personal andorganizational incompetence and behavioral errors(arrogance, fear, and laziness) the environmentalturbulence became too complex and difficult tohandle, and the end result was public humiliation.

Institutionalization of the Failure Metanarrativeand Its Implications

These failure discourses form an intertextual total-ity that increasingly framed Nokia as a failure caseand provided a number of explanations that couldbe used to make sense of the failure. Just as in the


case of the success discourses, the interpretationof failure was increasingly salient. However, theframings and attributions were more complex thanthose in the success discourses. In particular, man-agers and other actors frequently defended theirown actions and blamed others.

Thus, the failure discourses produced a failuremetanarrative that was widely shared and dissemi-nated. This failuremetanarrative replaced thesuccessmetanarrative; in fact, the replacementprocess itself isan interesting phenomenon. Many managers andother observers were quick to reassess Nokia’s newsituation. This could be readily achieved by focusingattention on themost recent events; therewas no needtochallenge themetanarrativeofsuccessandat times,it was possible to build on it. Either Elop could be seenas the scapegoat, or the collapse could be attributed tofundamentalchanges in theenvironment (e.g., thenewcategory of smart phones introduced by Apple).

However, the failure discourses often also resultedina reinterpretation of the past, for example the long-term effects of managerial decisions or Nokia’s ca-pabilities or systems. Some expert observers madespecial efforts to correct their previous assessments,which nowappeared overly positive. For instance, inhis CNBC column on September 17 (almost immedi-ately after the mobile telephone division was sold toMicrosoft), Dan Steinbock emphasized that althoughNokia had been at the peak of its success in 2010when his most recent book had been published, Ste-phen Elop destroyed all of the good that Kallasvuohad achieved. Similarly, JormaOllila andOlli-PekkaKallasvuo have engaged in a discursive struggleover where to place the blame for the decline.

Overall, the institutionalization of the failure met-anarrative had significant implications for learningboth within and outside the corporation. Internally,the focus turned to thecrisis,whichwasat leastpartlyaggravated by the collapse of the successful past.However, it may also be that a sense of crisis wasnecessary for renewal; this was visible, for example,in Elop’s famous “burning platform” speech. Exter-nally, Nokia could no longer serve as a success storyto be imitated. Failure became the issue on whichboth the media and management education seemedto focus, although Nokia’s selling of its mobile tele-phone division could also be attributed as a success-ful business exit instead of as failure of any kind.

DISCUSSION

Our analysis has focused on how success andfailure were discursively framed and explained in

the accounts of managers, experts, and the mediaduring the peak of Nokia’s success and after thecompany experienced crisis. Although the sametypes of discourses were used in both the successand failure accounts, a closer analysis revealssignificant differences between the framings andattributions. Table 2 summarizes the primarycharacteristics of the metanarratives of successand failure.Individual managers and their decisions played

a key role in both success and failure constructions.As could be expected, almost all of the author typeslargely attributed success to managers’ skills orspecific decisions. In many instances, specific man-agers came to personify the company in the sensethat the success stories had clear parallels betweenthe characteristics and personality of the key people,suchas the twopowerfulCEOs, JormaOllilaandKariKairamo, and Nokia as a corporation. These successaccounts were frequently full of heroism and glorifi-cation. The failure accounts also focused on themanagers and their actions; in particular, recent ac-tions such as the recruitment of Stephen Elop and thedecision to focus on Microsoft were criticized. How-ever, inmanycases, therewasalsoa re-evaluation ofthe past; for example, Jorma Ollila’s actions werenow more critically evaluated. Like the successstories, the failure accounts draw strong parallelsbetween the top managers and the entire organiza-tion; for example, Kallasvuo came to symbolize mis-takes anda lack of innovativeness.Moreover, hewasoften constructed as a scapegoat. The failure storiesalso included conspiracy theories; for instance, see-ing Elop as amolewhose primary rolewas to deliverNokia into Microsoft’s hands.Organizational capabilities were used as more

long-term explanations of success or failure. In par-ticular, Nokia’s capabilities, such as innovative com-petence, were portrayed as key success factors. Inturn, the failureaccountsprovided reinterpretationsofNokia’s capabilities. Nokia’s innovation capabilities,whichpreviouslyhadbeenpraised,werenowseenasinsufficient. Furthermore, changing times were seenas requiring new capabilities that Nokiawas lacking,thus combining capability- and environment-basedexplanations.Organizational-design-related attributes, for ex-

ample, the corporation’s culture and systems, werealso used as explanations of success. This was thecase, for example, with global logistics. At times,the success stories also included accounts of thedifficulties and challenges that the organizationhadmanaged to overcome; these were later seen as


valuable learning experiences. Together with therole of strategic leadership, this area was the mostcritically re-evaluated by all author types in con-nection with failure. Whereas the success narra-tives praised Nokia’s strategic agility, the failurestories focused on the complexity of the company’sorganizational structure, committees, and a dys-functional matrix organization that made it bu-reaucratic and slow. It was also argued thatprevious success had made the organization com-placent, and thus, success could be used as an ex-planation for failure.

Last, the success and failure accounts also fo-cused on the role of the environment. Contrary towhat could be expected based on attribution the-ory, the environment was much less central to ex-planations of failure than it was to explanations ofsuccess. The reason is that the environment wasseen as conducive to success in the success ac-counts; for example, the role of the Finnish nationalbusiness system or the role of the government insupporting innovation were frequently used asexplanations for success. In the failure accounts,the environment played a different type of role.Whereas Samsung’s progress and Apple’s devel-opment of the iPhone were frequently portrayed asa major change in the competitive environment,these changes were often not seen as the mainproblem, but instead related back to organizationalcomplacency, inward orientation, or Nokia man-agers’ capabilities.

This comparison highlights four interesting is-sues. First, it is striking to see how the same corpo-ration could turn from an emblematic success storyinto an outright failure in a very short period. In thissense, our analysis is consistent with other recentstudies that point to examples where corporationstend tomaintainaverypositive imageuntilproblemsaccumulate, leading toa collapse in its public image.Nokia’s case is not as dramatic as that of Enron (Bojeet al., 2004) or GM (Kuhn, 2008) in this respect. More-over, unlike Enron, Nokia’s case is not about ethicalviolations or serious wrongdoing. Obviously part ofthe positive spin aroundNokiamay have been due toits interest in a positive image, but more important,popular and more academic commentators and ex-perts contributed to and spread this success meta-narrative—until Nokia’s problems were too big toconceal. The diversity of different types of commen-tators led to a proliferation of different success ex-planations,whichcreatedahaloeffectaroundNokia.Therewas a tendency to see everything Nokia did asbest-in-class. When the success narrative then sud-denly turned to a failure narrative, it was almost as ifNokia had betrayed its commentators and almostovernight, everything that the firm did was seen ina negative light, despite the fact that the divest-ment of mobile telephones was most likely the mostefficient and fastest way to solve the company’sproblems.Second, our analysis shows that framings and

attributions not only relate to specific events leading

TABLE 2Characteristics of Success and Failure Discourses

Discourses Characteristics of success discourses Characteristics of failure discourses

Strategic leadership • Attributions to managers’ skills, specificdecisions, choices

•Attributionsofmanagers’decisions, choices (focuson most recent)

• Personification of company • Personification of company• Glorification of individuals • Scapegoating

• Conspiracy theoriesCapabilities • Focus on unique capabilities

developed over time• Reinterpretation of capabilities reframed asinsufficient

• Lack of capabilities needed to address newchallenges

• Inertia in focusing capabilities, routines to newcompetitive regime

Organizational design •Focuson internal cultureas conducive to culture • Focus on lack of development in recent years• Organizational systems as providing

competitive advantage•Observations on internal problems growing out ofsuccess

• Problems seen as learning experiences • Structure that inhibited efficient research,development

Environment • Environment seen as conducive to success • Environment seen asmajor explanation of failure,thus reducing managerial responsibility• Linkages with national business system


to improving or deteriorating financial performance,but also usually relate to the reassessment of thecorporation’s longer term development. Thus, the suc-cess period tended to produce overwhelmingly posi-tive accounts of the corporation’s long-termdevelopment, going so far as to glorify the heroic deedsof the company’s various CEOs, whereas the failureperiod led to drastically negative interpretations of thecorporation’s history of “muddling through” instead ofpossessing “heroic far-sighted visions.” This charac-teristic bias is the essence of the black-and-white met-anarratives of success and failure. Thus, in the spirit ofRosenzweig (2009), our analysis should avoid takingany framing of success or failure cases at face value orsharing one-sided explanations without caution aboutmanagement practice or education.

Third, our comparison of success and failure nar-ratives also points to the political aspects of theseaccounts. On the one hand, managers and otheractors seek recognition and legacy, which is re-flected in the success stories and their production.Apart from the focus on specific individuals’ strate-gic leadership, it is interesting to note that not allmanagers were seen as heroes or were even recog-nized in the success accounts. This was the casewith someofNokia’s cell-phone business’s foundingfathers, whose contributions were ignored in thesuccessdiscourses.On theotherhand, failure raisesissues of responsibility, blame, and even stigma,and there are vested interests in promoting partic-ular interpretations of the past and present. Thefailure accounts can be seen as a search for scape-goats and as a struggle to establish blame. It is in-teresting to note how the interpretations of thecauses of Nokia’s failure by the three CEOs (Ollila,Kallasvuo, & Elop) differ. Thus, failure discoursesarealsopoliticallymotivated. Thismaybeoneof theprimary reasons that the failure metanarrative ismore contested than the success metanarrative.

Fourth, the shift from the previous success ac-counts to failure accounts is particularly interestingfrom the narrative perspective. To simplify, refram-ingNokia as a failure casemeant thatmanagers andother actors also had to take a stand regarding thepast. One strategy was to focus only on the mostrecent events and to see them as turning points; ac-cording to this strategy, the past was less impor-tant and failure was simply due to the most recentevents, decisions, and actions. Another approachwas to reinterpret the past and to challenge someof the widely held assumptions; for example, thestrategic leadership, organizational capabilities, anddesign that previously hadbeenpraised could be seen

as the key causes of failure. Yet another strategy, asexemplified in the organizational-level explanations,was to see the previous success, for example, in thesense of complacency, as an explanation of failure:Success and failure narratives become parts of thesame metanarrative, similar to the structure of a clas-sical tragedy (Boje, 2008; Gabriel, 2010).

CONTRIBUTIONS AND FUTURE RESEARCH

Although learning, both in corporations and on amore institutional level in management education,is based on observing businesses’ successes andfailures, we still know surprisingly little about howpopular management literature constructs succes-ses and failures. This is unfortunate, as success andfailure stories may be characterized by cognitivebiases and simplification that can easily pass un-noticed. Our motivation was to adopt a discursiveperspective to explore discursive framings and at-tributional tendencies in the case of recent publica-tions about Nokia Corporation.Our analysis reveals a striking black-and-white pic-

ture in the success and failure accounts and shows at-tributionaldiscursive tendencies thatcharacterizeboth.In so doing, it makes contributions both to research ontheuseofmanagement literatureasabasis for learningas well as to research on third-party attributions inmanagement and organization studiesmore generally.Most important, our analysis helps us to understandhow success and failure stories are constructed inpopular management literature and what this entailsfor management learning and education. Thus, ouranalysis contributes to the somewhat dispersed butgrowingbodyofworkonmanagement literatureand itsrole in knowledge production and learning (Furusten,1999; Kieser, 1997; Abrahamson & Fairchild, 1999).Although previous analyses have pointed to the

role of management fashions in institutionalization(Abrahamson&Fairchild, 1999) and the implicationsof management books for organizations and man-agers (Furusten, 1999), our analysis complementsthis body ofwork by focusing on the specific ways inwhich success and failure stories are constructed.By revealing the black-and-white framings and bysimplifying the attributional tendencies in theseaccounts, our analysis underscores the need to takea critical view of not only the success and failurecases but also the success factors. This can beseen as a major theoretical challenge for criti-cally oriented research in the area of managementeducation (Morrell, 2008; Spicer & Bohm, 2007); it isalso a concrete challenge for practitioners.


Second, our analysis contributes to research onattributions in management and organizations. Inparticular, our discursive analysis adds to thegrowingstreamof researchondiscursiveandnarrativeattributional tendencies (seeBrown,2000;Mantereetal.,2013; Vaara, 2002). We show how various accounts bydifferent authors jointly constitute metanarratives onsuccessand failure. From thisperspective, it is easier tounderstandhow theprevailingdominant framingsandexplanations are created and to see how dominantconceptions of successand failure are institutionalized.In the Nokia case, the framings provide a clear-cut,black-and-white view. Thus, our case serves as a re-vealing illustration of the differences between the suc-cess and failure attributions. In other cases, successor failure metanarratives could be more complex, in-cluding elements of both success and failure.

Overall, our analysis confirms general tendenciessuch as the need to attribute success to specific in-dividuals and the prominence of self-serving attribu-tionsof failure.However, italsoshowsthat theseoveralltendencies are not the only ones that matter. We mustalso focus attention on case-specific nuances, such ashow interpretations of Nokia’s organizational capabil-ities or design changed, or how changes in the com-petitive environment have been accounted for. To oursurprise, the role of the environmentwas seen asmuchless important in the failure attributions than in thesuccess attributions. As our analysis shows, it is im-portant not only to distinguish specific explanations ofsuccess and failure but also to see how they are in-terrelated and how they work together to constructmetanarratives of success or failure.

Our findings are based on an analysis of one casealone, and future research should compare thesefindingswithother cases. Inaddition to theEnronandGMcases, itwouldbe interesting to examinewhetherApple’s or Microsoft’s success and failure stories fol-lowsimilarpatterns to thoseseen in thecaseofNokia,orwhether they tend to focusmore on the charismaticleadership cults around Steve Jobs and Bill Gates. Itwill also be important to examine and compare thesuccess and failure story types in different industrial,cultural, and historical contexts. Although our anal-ysis has revealed a number of interesting attribu-tional tendencies, future research could go further inthe analysis of aspects such as forgetting (ignoringthe past in the new success or failure explanations),scapegoating, and whitewashing.

Furthermore, it would be interesting to dig deeperinto the narrative genres of success and failure stories,including epic, romantic, and tragic tales and combi-nations of those genres (Boje, 2008; Gabriel, 2000). Our

analysis has focused on popular management litera-ture, particularly management books. Other studiescould also concentrate on other media and examinewhether media accounts differ from those of manage-ment books or academic articles. Another interestingtopic would be to examine how corporate reputationsaremanaged in successand failure accounts, and last,it will be important to study the political struggles thattake place around publishing—with respect to bothmanagement books and the media—and whether thecompanies themselves actively participate in shapingtheir own images.Ultimately, ouranalysis indicates thatweshouldbe

beware of the cognitive and politically motivateddiscursive and attributional tendencies that are likelyto characterize management literature. These ten-dencies should be taken seriously, especially inmanagement education, because many central ped-agogical practices build on examples of success andfailure. Moreover, specific companies and managersalso seem to be all too easily glorified or portrayed asheroes and then as culprits or stigmatized in popularmanagement books and the media. If we are notaware of these tendencies, we risk learning andteaching partial truths, following management fads,and reproducing celebrity culture in ways that do nothelp managers address their complex strategic andorganizational problems and challenges.

APPENDIX 1

APPENDIX 2

Identified Corpus of Nokia-Specific Literature

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List of Databases Used

ABI/Inform (ProQuest) JSTOR - Business CollectionBusinessSourcePremier(EBSCO) KauppalehtiCompendex (Ei Village 2) KH Net –kiinteistotietopalveluEbrary Materials Business File (CSA)Edilex PSK StandarditEllibs Science Direct (Elsevier) SDEmerald Fulltext (Emerald) Teemu - teknillinenkorkeakouluHanna - Svenska handelshogsk. Web of Science - WoS (ISI)Helecon CLASSIC Wiley InterscienceHelecon MIX Yritysonline - WSOYpro.fiJSTOR - Arts & Sciences ICollection


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4. Ali-Yrkko, J., Paija, L., Rouvinen, P., & Yla-Anttila, P. 2003.Nokia: An extended company with local and global opera-tions. In P. Gooderham & O. Nordhaug (Eds.), Internationalmanagement: Cross-boundary challenges: 399–411. Malden,MA: Blackwell.

5. Ali-Yrkko, J., & Hermans, R. 2002. Nokia in the Finnish in-novation system. ETLA Discussion Papers, No. 811. Hel-sinki: The Research Institute of the Finnish Economy(ETLA).

6. Ali-Yrkko, J., & Hermans, R. 2004. Nokia: A giant in the Finnishinnovation system. In G. Schienstock (Ed.), Embracing theknowledge economy: The dynamic transformation of theFinnish innovation system: 106–127. Northampton, MA:Edward Elgar.

7. Ali-Yrkko, J., Kalm,M., Pajarinen,M., Rouvinen, P., Seppala, T.,& Tahvanainen, A. J. 2013. Microsoft acquires Nokia: Implica-tions for the two companies andFinland (No. 16). TheResearchInstitute of the Finnish Economy.

8. Aspara, J., Lamberg, J. A., Laukia, A., & Tikkanen, H. 2011.Strategic management of business model transformation:Lessons from Nokia.Management Decision, 49(4): 622–647.

9. Aspara, J., Lamberg, J. A., Laukia, A., & Tikkanen, H. 2013.Corporate business model transformation and inter-organizational cognition: The case of Nokia. Long RangePlanning, 46(6): 459–474.

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14. Bruun, S., Wallen, M., & Hyrkas, S. 1999. Nokian valtatie:Taistelu tiedosta, tulevaisudesta ja optioista. Helsinki: Tammi.

15. Carral, R., & Kajanto, M. 2008. Nokia: A case study in man-aging industry downturn. The Journal of Business Strategy,29(1): 25–33.

16. Castells, M., & Himanen, P. 2002. The information societyand the welfare state: The Finnish model. Oxford: OxfordUniversity Press.

17. Cord, D.J. 2014. The decline and fall of Nokia. Helsinki:Schildts and Soderstroms.

18. Day, J. D., Mang, P. Y., Richter, A., & Roberts, J. 2001. Theinnovative organization: Why new ventures need morethan a room of their own. The McKinsey Quarterly, (2):20–31.

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30. Koivusalo, M. 1995. Kipinasta tuli syttyy: Suomalaisenradiopuhelinteollisuuden kehitys ja tulevaisuuden haasteet.Helsinki: Cetonia Systems.

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APPENDIX 3

Relative Occurrence of Success and Failure Categories by Author Type

0.0%Capabilities

Journalists

Government

Academic

Former Nokia

Environment Organizational design Strategic leadership

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

FIGURE A3.1.SuccessAttributions.The figure showshowmuch relativeemphasis thedifferentauthorgroupsplaced in their explanationsofNokia’ssuccess.For example, of the total number of success factors identified by governmental public-policy researchers (Government), 19.3%were associatedwith the capabilities discourse, 58.6%with the external environment discourse, 4.4%with the organization design discourse, and 17.7%with the

strategic leadership discourse.

0.0%Capabilities

Journalists

Government

Academic

Former Nokia

Environment Organizational design Strategic leadership

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

FIGURE A3.2.Failure Attributions. The figure shows how much relative emphasis the different author groups placed in their explanations of Nokia’s

failure.


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-40.0%

40.0%

-10.0%

0.0%

-20.0%

-30.0%

10.0%

20.0%

30.0%

Capabilities

Journalists

Government

Academic

Former NokiaEnvironment Organizational design Strategic leadership

FIGURE A3.3.Change in Emphasis. The figure shows how much the relative emphasis of the different author groups changed.

3 Excludes Nokia-specific literature, which is listed in theAppendix 2.


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Tomi Laamanen is professor of strategic management, director of the Institute of Management,and director of the PhD program of management at the University of St. Gallen. Laamanen holdsPhD degrees in strategy and finance. His research focuses on strategic management witha special emphasis on M&A, capability dynamics, strategy processes, and cognition.

Juha-Antti Lamberg is a professor of strategyand economichistory at theUniversity of Jyvaskyla.Lamberg’s researchhas focusedonstrategyandeconomichistorywithanemphasisondecliningindustries, consistency and change in strategy, and history of strategy and historicalmethods instrategic analysis.

Eero Vaara is a professor of organization and management at Aalto University School of Busi-ness, a permanent visiting professor at EM LYON Business School, and a distinguished visitingscholar at Lancaster University, U.K. Vaara’s research interests focus on organizational, strate-gic, and institutional change, strategic practices and processes, historical analysis, and man-agement education. He has worked especially on discursive and narrative approaches.


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Explanations of success and failure in management learning