Updated: Sep 25
Microsoft discovered that Finns’ views on work-life balance are different from those of Americans. Behavioral misunderstandings caused tension and friction between US and Finnish management teams and employees. Many problems could have been avoided had Microsoft embraced Nokia’s corporate and Finland’s national culture rather than expecting the Finns to adapt to their new owner’s native culture.
Individualism vs. Collectivism. While both the United States and Finland are considered individualist cultures, Americans display a higher level of individualism than the Finns. Individualism refers to the tendency for individuals within a society to display an individual-focused mentality rather than one focused on the collective society’s well-being. The degree of individuality expressed by Finnish employees generally leads to developments where the “employer/employee relationship is a contract based on mutual advantage….” Olli-Pekka Kallasvuo, a former CEO of Nokia, discusses the impact that individual gain seeking had on Nokia’s operations:
The company did not pay sufficient attention to the emotional undercurrents caused by internal competition for resources…. As [Nokia] grew larger and richer, each department became its own kingdom, each executive a little emperor, and people were more concerned about their status and internal promotion than cooperating actively with other departments….
Nokia’s increasing competitiveness and Nokia’s culture of employees misleading management is an example of national culture influencing corporate culture. When Nokia’s employees mislead upper management, they preferred to further their own positions rather than the overall position of the team, or for the company as a whole.
The notion of individualism was not new to Microsoft. “Americans find their own frankness, self-reliance, and tenacity in the Finnish psyche.” The way Microsoft Mobile operated enabled both Nokia and Microsoft employees to remain in a siloed culture, which further impeded the success of the newly formed entity. The siloes didn’t only exist between departments, they also existed between nationalities. One Nokia employee said, “You have to be a Finn or live in Finland to advance fast.” Another employee stated, “It’s hard to move up the ladder; too many foreigners with too few locals in higher middle management gives employees the impression that a glass ceiling exists.”
The degree to which Microsoft Mobile catered to individualist tendencies led to many employees expressing dissatisfaction. Even individualists prefer the equal opportunities that come with higher degrees of collectivism. Microsoft Mobile retained the individual-focused corporate cultures of Microsoft and Nokia. While companies seek to hire ambitious, success-driven employees, they should seek to create a culture focused on the well-being and profitability of the company.
Masculinity vs. Femininity. Finland and the United States are on opposing sides of the masculine and feminine spectrum: The United States is viewed as a masculine society whereas Finland is deemed a feminine society. Competition and achievement drive Americans while general well-being, free time, and flexibility define success for Finns. Finns view Americans as being desperate for popularity, stardom, and money. This “single-minded pursuit of wealth conflicts with Finnish ideas about self-fulfillment, artistic goals, calm inventiveness, and concern with the environment.” [Finns are] “modest and not chauvinistic; they have an inner, deeply rooted conviction that Finnish norms are optimal.” Nokia provides an interesting study on how corporate culture can override national culture – evidenced by Nokia’s culture of intense competition. If one were to merely look at Finland on the Masculinity versus Femininity scale, one would assume that their employees would display a preference toward corporate unity. This contradiction shows that relying on mere research of national culture can fail to properly inform a due diligence researcher. In fact, this is one of many cases where taking the time to understand corporate culture can aid in the deal making process.
Belief Systems.The fundamental tenets within Finnish society come from two sources: nature and Christianity. From nature, Finns believe that life should move at a slower, more natural pace as compared to the rushed pace most Americans live. They make sure to take lots of holiday vacation time, even a month at a time, to create a sense of balanced life. Most of their vacation time is often spent in forests at family cabins enjoying the scenic nature of their country. The other source of Finnish beliefs is Christianity. Finns exhibit a deep sense of loyalty and trust in the way they interact with one another. Children are taught from infancy the importance of faith and respect towards others. The family is held in high esteem within Finnish culture.
Nokia emanated these values through its international operations. “Having strong Finnish culture, the company is extremely flexible on your work-life tradeoffs. You can practically agree any arrangement with your line manager.” Further, one American employee noted, “It is a family-oriented job, so you can take time off while your professional career can still progress.” With these ideals set in place, Finns at Nokia strive for a perfection of balance and oftentimes look down on those who don’t follow or keep the same values. Finnish views on family and personal time can conflict with American views. This conflict can lead to disagreements on how long one should take for vacation and paternity leave. These differing preferences about family and personal time can lead to difficulties in developing HR policies for the combined company.
Strong Uncertainty Avoidance vs. Weak Uncertainty Avoidance. Uncertainty avoidance is defined as “the extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions to try to avoid these.” Finland is considered a society of strong uncertainty avoidance while the U.S. is deemed to be the opposite. Finnish disinclination towards ambiguity is manifested in strict security rules to guarantee the country’s future stability (e.g., every male is required to serve in the Finnish military to secure citizenship). Finns are risk avoiders; they do not accept change easily — especially when the change comes from outside of the country: Finns demonstrate a “lingering uneasiness in the presence of foreigners.” When Microsoft announced its intention to acquire Nokia’s mobile unit, many Finns expressed uneasiness with the notion that a prized Finnish company would be taken over by outsiders and, subsequently, ruined.
Task-Based vs. Relationship-Based. Both Finland and the United States are task-based cultures. In both countries, relationships are based on business skills and accomplishments rather than on friendships. In a typical meeting, both Finns and Americans are focused on completing the outlined agenda rather than on creating a lasting relationship. The effects of failing to take the time to develop business relationships can weaken morale and undermine company unity. Though Finns and Americans display similar inclinations toward task-based work, the similarities can lead to merged companies failing to effectively cooperate and share ideas.
Confrontational vs. Avoids Confrontation. Americans tend to be classified as “confrontational” and more emotional while Finns are described as stoic people who avoid confrontation. Where Americans welcome disagreement, Finns generally view debate as something to be avoided and instead remain silent. Usually, Finns choose silence out of “not wanting to upset others for fear of social retaliation and not wanting to show they had limitations or weaknesses.” Nokia employees also followed the Finnish ideal and avoided confrontation. As a company, management was “more intent on defending and preserving existing successes than on attacking competitors.” Microsoft Mobile’s unwillingness to attack competitors likely contributed to its inability to recapture lost market share.
Linear Time vs. Flexible Time. In both the U.S. and Finland, people operate on linear time. Both cultures follow outlined schedules and consider tardiness to be rude. However, the U.S. culture is generally seen as more flexible than Finnish culture; Americans are more lenient in scheduling and are more accepting of tardiness. Finland is more rigid in using time wisely, and if someone shows up late to a meeting, that person is generally frowned upon. Thus, differing views on what constitutes “late” can lead to distrust and resentment within MNE’s, such as Microsoft Mobile.