Characteristics of a Good Leader - Essay Example

CASE ANALYSIS OF AT&T Executive Summary This report is divided into different sections. The first section deals with the AT&T's mission ment andhow are they planning to achieve what they say in their mission statement. The organization on the whole as a business is not doing too well. This is discussed in the internal and external analysis of the company in the form of SWOT analysis. The company is going through a lot of internal weaknesses that needs to be overcome, there are also opportunities given that the organization can avail. Then PEST analysis is done to review the political, economic, social and technological factors affecting the company due to these external issues. Then comes the Porter's five forces to see if it is favorable to invest in the telecom industry. The issues that need to be considered are stated after which the recommendations are given for the organization to take over. AT & T's mission statement: The AT&T Foundation invests globally in projects that are at the intersection of community needs and AT&T's business interests. Emphasis is placed on programs that serve the needs of people in communities where AT&T has a significant business presence, initiatives that use technology in innovative ways, and programs in which AT&T employees are actively involved as contributors or volunteers AT&T has a societal purpose. Public service and social responsibility are traditions deeply embedded at AT&T. The AT&T Foundation seeks to educate, enrich, engage, and empower the communities served by AT&T. Some of the priorities that the AT&T Foundation supports includes: Education AT&T make grants to projects that support lifelong learning, teacher training and parent participation in children's education; AT&T look for initiatives that use technology to connect students, teachers and institutions of learning; and they encourage efforts to win student interest and involvement in mathematics, science and engineering. Civic & Community Service We give to initiatives that promote diversity and advance equal opportunity; we back projects that promote economic capacity building in local communities; and we support organizations that aim to protect the environment. AT&T assists programs designed to give children a sound start in life and to equip parents to better balance the demands of work and family life; we contribute to organizations that deliver social and health servicesto people in need, particularly children, mothers and people living with HIV/AIDS. Arts & Culture We support artistic work that fosters communication, builds diverse audiences, and inspires innovation and learning in communities; we also target initiatives that help women and artists of diverse cultures bring their work to wider audiences. Employee Involvement The AT&T Foundation helps extend the reach of AT&T employees' community involvement efforts by matching employee contributions to educational and cultural organizations and by providing grants to recognize employee volunteer efforts in communities located in all areas of the country. SWOT ANALYSIS from the organizational perspectives. Strengths AT&T was the first telephone exchange company in the US. Weaknesses The first divestiture was the result of AT&T and the Regional Bell Operating Companies. With this divestiture, AT&T lost its ability to reach almost every consumer in the US by its wires and bills, as they were no more providing local exchange services. There was a need of reinvention of the company as a competitive player as they were lacking behind in most of the things. A proper structure and leadership was lacking. There was rigid corporate culture. There was no concept was empowerment or job sharing or rotation. People coming from other companies were not satisfied with this unbending culture. With the incoming of fiber optic transmission and other technologies, the competition aroused in long distance telephone services. AT&T had to build up on these new technologies and reinvention was required. The lack of it resulted in fall in market share One of the other weaknesses was that AT&T by 1984 did not have their own local network. Since there were few synergies between telecom operator and manufacturing businesses, the two businesses became obstacle to each other's growth, which resulted in second divestiture with NCR and Lutent Later acquiring of TCG saved tens of thousands of dollars but former top executives left TCG because they missed the entrepreneurial spirit that existed before the acquisition. Once again the culture caused issues within the new acquisition. When the company entered into the internet service business, lack of marketing investments lead to the loss of customers. Upgrading of cables was expensive and time consuming for AT&T, to make them suitable for voice phone calls. In 2002 AT&T was industry's most indebted company leaving the company's stock price far behind its competitors due to its acquisition of TCI and MediaOne. The improper management of the acquired companies resulted in the fall in revenues of overall AT&T revenues. The company was in need of an experienced CEO. Threats AT&T faced a lot of challenges after its transition from monopoly to competition. At first they use to purchase their equipments from its own manufacturing subsidiary, but with the divestiture RBOC's saw AT&T more as a competitor. Since regional Bells and their descendants' controlled local networks, it had proved difficult for the new operators to succeed. Therefore AT&T also had to face their competition and had to come up with such innovations that they could win back their lost customers. AT&T has failed in almost all of its acquisitions and divestitures Opportunities Systematic innovation was required in the system to gain competitive advantage as innovation is linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning, market share, etc. Technology needs alignment by carefully studying the upgrades and applying so that others tend to follow us rather vice versa. Coming up with the idea pf prepaid calling cards at lowest cost to the customers. Pre paid internet service is another area which is in great demand. Pre-paid Long Distance for cellular and home phone must be introduced catering to the migrants currently living in US or students who have come to states for their higher studies. Provide great rates on Prepaid Mobile.Provide lowest cost to customers in terms of all the services being provided so that AT&T can increase its market share. Cater untapped markets in other countries. Starting schemes like CGMA or GO4B and so on. PEST ANALYSIS Political Current telecommunications laws are at the breaking point, but the politics surrounding the current structure complicates reform efforts, panelists discussing telecom regulation have agreed on it. The panelists generally agree on the need to deregulate many current telecom rules and to pre-empt states from much regulation, particularly economic regulation of new communications-based technologies. The event, where this discussion occurred was hosted by the New Millennium Research Council, which is supported by regional Bell telephone companies. Policy makers and regulators in the United States continue to define universal service based on voice dial tone, while the 18 nations in front of us define it in terms of universal broadband deployment. U.S. policy has not even clarified basic standards for U.S. broadband speeds and is lagging behind the rest of the world. The global standard is now 10-100mbs, while in the United States, even a speed of 500 kbs can be described as broadband. Economic The United States has slipped from leading the world's economies in telecom services to 16th, and likely will fall to 18th in the future. The Economist's October 28th article (www.economist.com) page 65 "Banks In Trouble" shows how big banks are messing up. One main problem is the huge lending exposure to telecoms firms. This concentration risk is so grave a special committee has been formed to see how bad it is. November 2nd USA Today (Money section B, page 1B) wrote "Long Distance Phone Carriers Hanging" states that vicious competition and a tech revolution are pushing traditional firms out of the loop. A revenue drop from 41.2 billion in 1998 to only 40.2 billion in 2,000 is the first tremor in a seismic shift analysts say could end the telecom business, as it is known. Technological There have been a lot of advances in the technology side of telecom sectors. Different devices and services have come into existence. Companies falling in this sector have to remain alert due to frequent technological changes. Social There are certain social issues linked with telecom. Like the rays coming out of mobile phones devices are dangerous for customers. Porter's Five Forces Threat of new entrants The threat of new entrants is low and favorable to the industry because large firms do have a cost and performance advantage. There are no such proprietary product differences and the customers do not incur any significant costs in switching to suppliers. But there is a lot of capital needed to enter this industry. Bargaining power of buyers The bargaining power of buyers is low as there are a large number of buyers relative to the number of firms in the business. There are a large number of customers with relative small purchases. The buyers do not need a lot of important information for the telecom service industry. Threat of substitutes Threat of substitutes is high because the customer will not incur any significant cost when switching to other devices. The performance of substitutes is justified by their price. Bargaining power of suppliers The bargaining power of suppliers is favorable to the industry because the inputs are standard rather than unique or differentiated. It is easy to switch between suppliers. The costs of purchases do not have significant influence on the overall costs. Determinants of rivalry among existing competitors The determinants of rivalry is favorable to the industry because the industry is growing rapidly, the fixed cost of the business are relatively low portion of the total costs and the competitors are diversified rather then specialized. Issues that need to be considered Leadership AT&T does not know how to concentrate on opportunities and get rid of weaknesses. Most of the already existing strategies are not appropriate within the organization. Lets discuss how to manage this issue. Rauch & Behling (1984) define Leadership as the process of influencing the activities of an organized group toward goal achievement. AT&T needs to improve its leadership qualities by taking the following points into consideration. Explain the reasons for instructions and procedures. Care about employees and how are they doing. Give personal guidance and direction to her employees Be result oriented. Listen to all employees. Give credit where credit is due. Maintain an open door policy Managing change At AT&T acquires new businesses, they need change to know what changes will occur and how to manage them. Management failures lead to divestitures of the business. DIRECTIONS: How to manage change within AT&T Education and Communication This tactic assumes that the source of resistance lies in misinformation or poor communication. Participation Prior to making a change, those opposed can be brought into the decision process. Facilitation and Support The provision of various efforts to facilitate adjustment. Negotiation Exchange something of value for a lessening of resistance. Manipulation and Cooperation Twisting and distorting facts to make them appear more attractive. Coercion The applications of direct threats or force upon resisters. Effective Incentive Scheme The case study shows that the employees were not given any commission on the sale of products. In order to keep the organization running in a good manner we have to keep our employees happy in the form of effective incentive schemes. This is what AT&T needs to do. Communicate goals Communicate what you are doing and why is crucial to success. Everyone needs to know what the goals are and what are the rewards for achieving those goals. Know your objectives There is no point implementing an incentive scheme just because everyone else is. Establish what aspect of your business you are trying to improve, be it product knowledge, absenteeism rates, customer satisfaction or retention rates Convince the board If you have got the objectives right, know what you want to do, why and how, then winning the board over should not be too hard. Consult with staff As such schemes are all about staff participation, it makes sense to get them involved at the beginning. Find out what would motivate them to work harder or please more customers. Maintain momentum Management needs to keep banging the drum and alerting employees to any results, new targets or rewards. It needs to become part of the company culture. Make it pertinent This ties into ensuring the rewards are appropriate. Different departments or locations will probably have different objectives, so you need to establish what those are and how to reward them. Poor Management There seems to be a lot of poor management in AT&T. this is what they have to do. 1. Give the staff a huge goal that will keep their attention and ask them to develop the strategies or steps to effectuate the goal. 2. Have daily or weekly reports or check-ins, daily at first. 3. Ask the staff how willing they are be to effectively managed and inform them in advance them of your particular style and of your high standards/expectations/requirements. 4. Get the person focused on actions and outcomes, not just goal setting and reporting. 5. Set up your staff/goals so that you can afford for them not to produce or that you can afford to fire them as this will free you up to manage well as being fearful or reactive. Recommendations AT&T has gone through a lot of failures in the past. They need to get serious with what strategies to be implemented. Acquisitions and divestitures of the organizations have not proved successful at all. The consideration of following strategies may help. Backward integration The company should gain ownership or control over firms' suppliers because the RBOC's were acting as their competitors when it came to supplying the equipments. Gaining ownership of suppliers would reduce the costs that the company current incurs. They would have their own suppliers and get advantages of economies of scales and later giving low cost service to customers. Market Penetration Since AT&T has lost its market share they need more of market penetration. With market penetration the organization can increase its market share for present products or services in present markets through greater marketing efforts. Market Development AT&T should introduce present products and services into new geographic area. This would assist the organization in the increase in customers. Concentric diversification This is another strategy that they can implement by adding new but related products. They can get new products by a process of innovation. Hire new skilled workers to come up with bright new ideas and gain competitive advantage. Horizontal diversification AT&T can also go for horizontal diversification by adding new unrelated products or services for present customers. This would again be through innovation and bringing in new skilled workers. References 1. Characteristics of a good leader. Retrieved March 23rd, 2006, from http:// www.angelfire.com/il/adventureclub/leader.html 2. The Top 10 keys to effective, flexible management of others. Retrieved March 23rd, 2006, from http:// topten.org/Content/tt.AE4.htm 3. How to Train Your Employees to Be More Effective. Retrieved March 23rd, 2006, from http:// www.trainingsys.com/articles/trnojt.html Read More