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Nokia

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This article is part of the Center for Media & Democracy's spotlight on global corporations.

Nokia Corp
Type Publicly-Traded
Founded 1865
Founder(s) Fredrik Idestam
Headquarters Espoo, Finland
Area served worldwide
Industry technology
Products communications equipment
Revenue $84.84 billion USD [1]
Net income $11.73 billion USD[2]
Employees 112,262 (full-time) [3]
Divisions Networks Technology; Mobile Devices and Enhancements

Nokia, based in Helsinki, Finland, is a global leader in telecommunications and the world’s largest mobile phone manufacturer. While it maintains several manufacturing units in Europe and the US, Nokia is shifting some of its production to Southeast Asia, Latin America and Central and Eastern Europe in order to keep production costs low and margins and profits high. [4]

Company History

Nokia was founded in 1865 by Fredrik Idestam. It began as a paper mill in southern Finland which exported to Russia, the UK, and France.[5] Nokia merged with Finnish Cable Works and Finiish Rubber works in 1967 to form the Nokia Group[6] at which point only about 3% of its sales were accounted for by electronics.[7]

"In the beginning of 1970, the telephone exchanges consisted of electro-mechanical analog switches. Soon Nokia successfully developed the digital switch (Nokia DX 200) thereby replacing the prior electro mechanical analog switch. The Nokia DX 200 was embedded with high-level computer language as well as Intel microprocessors which in turn allowed computer-controlled telephone exchanges to be on the top and which is till date the basis for Nokia's network infrastructure."[7]

In the 1980s Nokia began developing a multinational cellular network, and after that time it continued to increase its sales of cellar products as well as to produce televisions.[7][8] After 1992, the company's new president and CEO, Jorma Ollilo, chose to focus the company on telecommunications, an industry of which it has been the leader since 1998.[9]

Historical Financial Information

Global Fortune 500 Rank:[10]
2007: 119
2006: 131

Business Strategy

Nokia is an Original Equipment Manufacturer or OEM, meaning it directly designs and produces products which bear its brand.[11]

On its website Nokia cites a June 2007 vision statement that "Our vision is a world where everyone can be connected".

"Everyone has a need to communicate and share. Nokia helps people to fulfill this need and we help people feel close to what matters to them. We focus on providing consumers with very human technology – technology that is intuitive, a joy to use, and beautiful. We are living in an era where connectivity is becoming truly ubiquitous. The communications industry continues to change and the internet is at the center of this transformation. Today, the internet is Nokia's quest. Nokia's strategy relies on growing, transforming, and building the Nokia business to ensure its future success." [12]

Political and Public Influence

Political Contributions

Nokia reported spending $540,000 on lobbying in the U.S. in 2007 and a further $40,000 on the services of the lobbying firm Clark & Weinstock.[13]

In 2008 Nokia Corp spent $200,000 on lobbying itself and a further $20,000 on the services of Clark & Weinstock.[14]

Lobbying

There is no data available for the Nokia Corp political action committee after 2002, when it donated $1500 to Republican candidates; $500 to Randy "Duke" Cunningham (R-CA) and $1,000 to Fred Upton, (R-MI).[15]. In 2000, individuals from its political action committee donated $1000 to Hilary Clinton (D-NY) and $500 to Charles Pickering, Jr. (R-MS).[16]

Corporate Accountability

Labor

Nokia has several manufacturing plants in the U.S. and Europe, but it has moved some production to Asia (including Southeast Asia and China), Latin America, and Central and Eastern Europe. Nokia's own plants in China employ 4,500 people in R&D and manufacturing, and it contracts with various independent suppliers for manufacturing and parts, as well.[11]

In response to allegations of poor labor practices (including lack of freedom of association, forced overtime, and the use of poisonous and dangerous manufacturing materials and processes)[17] in some of Nokia's suppliers in SOMO's November 2006 report,[11] Nokia disclaimed any relationship with some of the factories investigated and did not respond to issues raised regarding Indian and Chinese suppliers. Nokia did undertake an investigation into two factories in Thailand (which it still claimed it did not do business with) suppliers in Thailand, Namiki and LTEC.[18] However, the methods used by auditors were not made clear in the report, and subsequent investigations by SOMO found that workers were interviewed with management present and were afraid to respond honestly to interviewer questions.[17]

Human Rights

Nokia developed a Code of Conduct in 1997 detailing it's position on corporate accountability, ethics, human rights, labor, and the environment, as well as its plans for the code's implementation. Nokia performs between 5 and 10 in-depth assessments of suppliers every year which evaluate social and environmental issues and include interviews with workers and management and dormitory and factory checks.[11]

A 2008 study demonstrated that Nokia, as well as several other major manufacturers of mobile phones, including Samsung, LG, and Motorola use cobalt mined in the Democratic Republic of Congo for the production of their mobile phones, thereby running the risk of supporting unfair labor practices in the mines and serious related human rights abuses.[19] Despite the companies former claims that they could not trace the origins of cobalt and other minerals used in the production of their mobile handsets, the report demonstrates that supply chains are identifiable and notes that despite this information, none of the mobile phone companies have taken action to insure that their cobalt suppliers comply with their Corporate Social Responsibility initiatives.[20]

Environment

Nokia Guidelines for Suppliers, accessed July 2008

Consumer Protection and Product Safety

Anti-Trust and Tax Practices

Social Responsibility Initiatives

Nokia participates in a number of voluntary corporate social responsibility initiatives. Nokia has been a member of the United Nations Global Compact since 2001.[4] Although Nokia is not a member of the Global e-Sustainability Initiative (GeSI), the company does participate in GeSI’s supply chain and capabilities working groups. Nokia has not signed the Electronics Industry Code of Conduct (EICC) because it claims that its own requirements on social issues, quality, health and safety, and environment are comparable to the EICC; it thus sees no need to work with a new code.[4]

At the moment, Nokia does not require its suppliers to get certification on norms such as the ISO and SA8000 because it feels that, “for some areas this will become very difficult, and suppliers will not be able to comply, for example on Freedom of Association and working hours.[4]

"Nokia Supplier Requirements" accessed July 2008]

"Corporate Responsibility and Nokia's Supply Chain"

Business Scope

Lines of Business and Major Products Paragraph

Production Units: China, Finland, India (networks technology); Brazil, China, Finland, Great Britain, Hungary, India, Mexico, Romania, South Korea (mobile devices and enhancements)


Customers Suppliers Creditors Competitors
Elcoteq Creditor 1 Ericsson
Hon Hai (Foxconn) Creditor 2 Motorola Inc.
BenQ Creditor 3 Samsung Electronics Co Ltd
Creditor 4 Cisco


Financial Information (2008)

Ticker Symbol: NOK
Main Exchanges:NYSE
Investor Website:[1]

Industry: Technology (Communications Equipment)

Shareholder % Total Shares held
FMR LLC 4.47%
Capital World Investors 2.31
Fidelity Magellan Fund Inc 1.76%
Growth Fund of America Inc 1.19%

Largest Shareholders

Geographic scope paragraph

Country Revenue Profits Assets Employees
Brazil Revenue 1 Profit 1 Assets 1 Employees 1
China Revenue 2 Profit 2 Assets 2 Employees 2
Finland Revenue 3 Profit 3 Assets 3 Employees 3
Great Britain Revenue 4 Profit 4 Assets 4 Employees 4
Hungary Revenue 4 Profit 4 Assets 4 Employees 4
India Revenue 4 Profit 4 Assets 4 Employees 4
Mexico Revenue 4 Profit 4 Assets 4 Employees 4
Romania Revenue 4 Profit 4 Assets 4 Employees 4
South Korea Revenue 4 Profit 4 Assets 4 Employees 4

Governance

Mr. Olli-Pekka Kallasvuo , 54
Chairman of Group Exec. Board, Chief Exec. Officer, Pres, Director and Pres of Mobile Phones
Compensation (2006): $ 2.39M

Mr. Rick Simonson , 49
Chief Financial Officer, Exec. VP and Member of Exec. Board
Compensation (2006): $ 1.15M

Mr. Anssi Vanjoki M.Sc. (Econ.), 52
Exec. VP, Head of Multimedia Bus., Head of Markets Division, Gen. Mang. of Multimedia and Group Exec. Board Member
Compensation (2006): $ 1.32M Stock Options Exercised (2006): $ 465.00K

Dr. Tero Ojanper, 42
Chief Technology Officer, Exec. VP and Member of Exec. Board

Mr. Simon Beresford-Wylie BA, 48
Member of Exec. Board, Member of Network Management Team and Chief Exec. Officer of Nokia Siemens Networks
Stock Options Exercised (2006): $ 17.00K [21]

Contact Information

Keilalahdentie 2-4
P.O. Box 226
FIN-00045 Nokia Group
Finland
Tel. +358 (0) 7180 08000
Fax. +358 7180 38226
Web: http://www.nokia.com

Articles and Resources

Books on the Company

Related SourceWatch Articles

Sources

  1. Yahoo Finance
  2. Yahoo Finance
  3. Yahoo Finance
  4. 4.0 4.1 4.2 4.3 "Nokia", Crocodyl, accessed July 2008.
  5. Nokia, "Story of Nokia: How it all began", Nokia website, accessed July 2008.
  6. Nokia, Story of Nokia: Three companies merge to form Nokia Corporation", Nokia website, accessed July 2008.
  7. 7.0 7.1 7.2 ConnectMobiles, accessed July 2008
  8. Nokia, "Story of Nokia: Cable Goes Electronic", Nokia website, accessed July 2008.
  9. "Story of Nokia", Nokia website,
  10. "Fortune Global 500: Nokia", Fortune Magazine, July 23, 2007.
  11. 11.0 11.1 11.2 11.3 Joseph Wilde & Esther de Haan, The High Cost of Calling: Critical Issues in the Mobile Phone Industry, SOMO – Centre for Research on Multinational Corporations, November 2006, p. 12.
  12. Nokia, Vision and Strategy, Nokia website, accessed July 2008.
  13. "Nokia Corp", Open Secrets, Center for Responsive politics, accessed July 2008.
  14. "Nokia Corp", Open Secrets, Center for Responsive politics, accessed July 2008.
  15. Nokia Corp: 2002 PAC Summary Data", Open Secrets, Center for Responsive Politics, accessed July 2008.
  16. "Nokia Corp Contributions to Federal Candidates: 2000", Open Secrets, Center for Responsive Politics, accessed July 2008.
  17. 17.0 17.1 SOMO, "SOMO Comments on Nokia Report: "Investigation into SOMO Claims of Poor Working Conditions at Two Suppliers - Summary of Findings", SOMO, undated, accessed July 2008.
  18. Nokia, Investigations into SOMO Claims of Poor Working Conditions at Two Nokia Suppliers - Summary of Findings, undated, accessed from SOMO website July 2008.
  19. DanWatch. May 2008. "Bad Connections: How your mobile phone is linked to abuse, fraud, and unfair mining practices in DR Congo."
  20. DanWatch. May 2008. "Bad Connections: How your mobile phone is linked to abuse, fraud, and unfair mining practices in DR Congo." p. 4.
  21. Yahoo Finance

External Resources

SOMO
EMS Now: The Global Source for the Electonics Manufacturing Industry

External Articles