This chapter reviews the period 2004–6, opening with a description of the problems Nokia was facing due to a boycott of its products by operators. However, the problems ran deeper than this, as Nokia was losing its agility and entrepreneurialism, and focusing on scale rather than speed, so its products were constantly late to market. It goes on to analyze the implications of a reorganization into a matrix structure in 2004, which led to wide-ranging top management changes over the following two years and a subsequent deterioration of strategic thinking and strategic leadership. We also see a growing bureaucratization and loss of agility during this period, along with increasing internal competition and difficulties as Nokia grappled with the challenges of shifting from a “hardware-first” to “software-first” approach.
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