Betrayal or Blindness? The Nokia Dilemma

Abstract The present paper discusses the case of the strategic fall of Nokia, which was once the market leader in the field ofmobile communications worldwide, to understand which of the key explanatory factors contributed to its downfall. Theanalysis compares two rival explanations the Trojan Horse theory, that involves intentional sabotage, and the morecommonly held view of strategic misjudgment. Based on the secondary research that relies on the Resource-BasedView, Strategic Inertia Theory, and Agency Theory, the study is a synthesis of recent publications and reliable statistics.The results have revealed that the failure of Nokia was mainly due to internal strategic misjudgment and not acalculated betrayal. In this way, the paper adds to the greater discussion of the topic of strategic failure to give practicalimplications in the innovation inertia, executive decision-making, and the ecosystem-based competition.