Organizational structure concepts and design principles

Organizational structure of three companies in the mobile telephony industry, namely Ericsson, Nokia and Motorola.

The Organisational Structure of Ericsson:

The Business Organisation at Ericsson-- the international leaders in telecommunication based in Sweden -- is segmented as Business Units, Core Units, and Other Business Operations. The business units comprises of Systems, Mobile Systems CDMA, Global Services and Transmission and Transport Networks and the Core Units include Core Network Development, Radio Network Development, Service Network and Applications, Supply and Sourcing. The Other Business Operations include Mobile Platforms, Enterprise, Technology Licensing, Network Technologies, Microwave Systems, Business Innovations, Power Modules and Test Environments. The global market and sales organization is spread across three primary market areas- the Americas, Asia Pacific, and Europe, Middle East and Africa. (www.ericsson,2003)

The company is geared by the Executive Management Team headed by the President and CEO, who is reported to by the Deputy CEO and First Executive Vice President who is in charge of the Corporate Functions, along with the CFO and Executive Vice Presidents. The Corporate Management team comprises of Executive Vice Presidents for the three market areas and Vice Presidents for the different Business units and Core Units and also R&D, technology, Market Development, Corporate Communications and Legal Affairs. Ericsson's organizational structure emphasises decentralization of authority and with fewer market units the executive management of the company exercises closer control over the business and market segments, enabling a leading edge in global services. (www.ericsson,2003)

The Organisational Structure of Nokia:

The business of Nokia-- the Finnish Mobile Telephony leaders-- is organized essentially into two business groups-- Nokia Networks and Nokia Mobile Phones. Along with that the company also has Nokia Research Center, which is the corporate research unit. It also has a separate Nokia Ventures Organization. The Nokia Networks Division comprises of IP mobility Networks, Broadband System, Mobile Internet Application and Professional Mobile Radio and also includes Product Operation responsible for functions including manufacturing, contract manufacturing and delivery of products. Customer Operations is comprised of regional organization, that is responsible to the locally and regionally operating customers as well as global customer unit. Nokia Mobile Phones operates in over 130 countries worldwide. (www.nokia.com,2003)

The main market segments of Nokia are the Americas, Europe and Asia Pacific. The Nokia Ventures organization explores new business areas and includes Nokia Mobile Internet Technical Architecture, Nokia Internet Communication, Nokia Home Communication, Nokia Venture Partners and Nokia Entrepreneurial Web. The Nokia Research Centre undertakes the R&D activities of the group centrally and the different business units also undertake research activities independently. The Company adopts a more decentralised, hierarchical form of structure with the key strategic decisions being taken by the Board of Directors-- comprising of Chairman, Vice Chairman and members -- and Group Executive Board. The Group Executive Board is headed by the Chairman and CEO of Nokia Corporation and seconded by the President of Nokia Corporation. The Presidents of Nokia Mobile Phones and President of Nokia Networks report to the President of Nokia Corporation. The Group Executive Board extends to the Executive Vice President and CFO of Nokia Corporation and Executive Vice President and CTO of Nokia Mobile Phones who reports to the President Nokia Corporation. (www.nokia.com,2003)

The Executive Vice President of Nokia Mobile Phones and Executive Vice President and General Manager Customer Operation of Nokia Networks report to their Presidents respectively. The hierarchy of authority creates more of a line / staff organization structure with strict portfolios in terms of Business Units. (www.nokia.com,2003) However it is reported that Nokia Corporation has recently adopted a Knowledge Management business strategy to change the organization from hierarchical structure to a network-based structure, enabling a learning organization. (Rory, 1997)

The Organisational Structure of Motorola:

The business of Motorola is segmented into six sections -viz, Government and Industrial Solutions Sector, Semiconductor Products Sector, Broadband Communications Sector, Personal Communications Sector Commercial, Integrated Electronic Systems Sector, and Global Telecom Solutions Sector. The company is a family run business with a Board of Directors essentially constituting the Chairman and Chief Executive Officer and the Chairman of the Executive Committee. The Executive committee is essentially constituted by the Executive Vice Presidents of the different business segments who reports to the Chairman of the Executive Committee. Key Decisions as taken by the Executive Committee. (Camplin, Gupta, McNabb and Thomas, 2000)