Last Updated 31 Jul 2021

Case study operation management

Category Case Study
Essay type Case Study
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Table of contents

SYNOPSIS

AT&T and Bellsouth are the two of the world’s giant telecommunication company. According to Mark del Bianco, a Communications Attorney who wrote Bumps in the road for AT&T-BellSouth merger, both BellSouth and AT&T own considerable chunks of prime wireless spectrum that is unused and that could quickly and relatively cheaply be used to provide broadband services that would compete with telecom and cable wireline broadband services--in other words, the long-sought "third pipe" to the home or business.

            The merging of these two companies will give AT&T and Bellsouth an edge over their competitors, and in this case, as Atty. Mark del Bianco have written, competitors will no doubt argue that the Federal Communications Commission and the Justice Department should worry about the loss of intermodal competition that will result if the two companies are permitted to retain this valuable spectrum.

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            While AT&T, being the largest phone company, bought Bellsouth, of which, being the 3rd largest phone company, this reduced the phone company into 2 large players and consumers are now alarmed because the constant merging of companies gives them fewer choices, of which case, these companies can immediately shoot up their prices. The proposed merger of AT&T and BellSouth means the death of the Internet and the unmasking of fictional competition between telecom companies, charged two Washington, DC-based consumer groups. The Consumer Federation of America and the Consumer Union urged regulators to reject the $67 billion proposal. (Ed Sutherland, 2006)

            While the plan gives AT&T to kill the internet so that they can cableize the internet connection, Sutherland quoted Gene Kimmelman, Consumer Union vice president for federal and international affairs which said:

“Congress and federal regulators need to look carefully at the lifeless 'competition' their flawed policies have created and reject this merger.”

BRIEF HISTORY OF AT&T

            The beginnings of AT&T or American Telephone and Telegraph started as soon as the telephone was invented. It is stated in AT&T’s website that The company that became AT&T began in 1875, in an arrangement among inventor Alexander Graham Bell and the two men, Gardiner Hubbard and Thomas Sanders, who agreed to finance his work. Bell was trying to invent a talking telegraph -- a telephone. He succeeded, earning patents in 1876 and 1877. In 1877, the three men formed the Bell Telephone Company to exploit the invention. The first telephone exchange, operating under license from Bell Telephone, opened in New Haven, CT in 1878. Within three years, telephone exchanges existed in most major cities and towns in the United States, operating under licenses from what was now the American Bell Telephone Company. In 1882, American Bell acquired a controlling interest in the Western Electric Company, which became its manufacturing unit. Gradually, American Bell came to own most of its licensees. Collectively the enterprise became known as the Bell System.

BRIEF HISTORY OF BELLSOUTH

Being todays 3rd biggest telephone company in USA, Bellsouth started its roots in 1984 where they opened for business and hire a total of 96,000 employees. In their 1984 highlights, it is stated that BellSouth Mobility activates cellular systems in the Miami/Ft. Lauderdale area and is the first cellular systems in the southeastern United States. In 1990, BellSouth became the world's first cellular company to hit the 500,000 customer mark and approximately 73 percent of BellSouth access lines in the southeast are now under a more flexible regulatory framework called incentive regulation. In year 2000, BellSouth announces on February 24 that it has closed its joint venture agreement with KPN Royal Dutch Telecom for ownership of E-Plus. BellSouth and KPN now share equal control of E-Plus, the third largest mobile operator in Germany. BellSouth holds a 22.507% share and KPN holds 77.493% and today, based from the article BellSouth Shareholders Vote Overwhelmingly to Approve Merger Agreement with AT;T, Shareholders of BellSouth Corporation (NYSE: BLS) have overwhelmingly voted to approve a merger agreement with AT;T (NYSE: T), the company reported at the conclusion of the special shareholder meeting today. BellSouth reported that approximately 97 percent of the shares that were voted approved the merger. This represents 1.22 billion - or more than 67 percent - of the company's outstanding shares. Approval of the merger agreement required a positive vote of a majority of the outstanding shares.

 DEPARTMENT OF JUSTICE DECISION AND APPROVAL

According to John Dunbar in his article U.S. Justice Department unconditionally approves AT&T-BellSouth merger plan, last October 11, 2006, the Justice Department gave its unconditional approval to AT&T Inc.'s (NYSE:T) buyout of BellSouth Corp. (NYSE:BLS) on Wednesday, a coast-to-coast behemoth that would be the largest U.S. provider of telephone, wireless and broadband Internet services. Despite the scale of the purchase, the Justice Department found no potentially adverse effects on competition.

            The event have literally saddened the consumers, as a Democrat named Jonathan Adelstein, was caught commenting on the event as "a reckless abandonment of DoJ's responsibility to protect competition and consumers."

 EFFECTS OF AT;T AND BELLSOUTH MERGER TO INDUSTRY

The news of the merger caused quite of bit of reaction in the industry. According to Susan Campbell, the coming together of AT;T/SBC and BellSouth will create the largest North American carrier, surpassing the current dominant company, Verizon/MCI, with larger revenues and capex. The combined revenues of AT;T (News - Alert)/SBC, Cingular and BellSouth for 2005 were roughly 31 percent of total North American service provider revenues. The combined Verizon/MCI totals represented about 23 percent.

            According to Howard, this puts the capital intensity of the combined AT;T group at 14 percent with the Verizon group at 18 percent, leaving breathing room for the proposed AT;T group to increase spending over the next couple of years to create a single more efficient and competitive next gen-network.

            The combined AT;T/SBC-BellSouth entity will certainly have more leverage over vendors, which have already been suffering from the telecom crash. Vendor consolidation has been lagging behind that of service providers, but predicts that a few giant vendors will emerge.

PERFORMANCE MANAGEMENT

Following the concepts of the core processes and process improvement, we can now keep track of the merged companies’ evaluative performance to boost up their seemingly ‘lifeless’ competition in the telecommunications industry by using performance management.

To executives, it often means managing the business `by the numbers` commitments to the business and meeting the bottom line.

            To fully define Performance Management, we have to look on the three dimensions of the word Performance. Performance can be seen on the effectiveness, efficiency and the changeability of a performer. For example, effectiveness can be seen in the extent of meeting the customer’s needs. Efficiency can be seen on how economic resources of the company are being utilized and changeability can be seen as to what extent the company is prepared for future change.

            With this, performance management is a process of  creating visions of what the desired future state is, planning and assessing the present organizational status relative to the vision, creating strategies for how to desired future state can be attained, and building on strengths so as to move toward your vision and lastly designing, developing, and effectively implementing specific improvement interventions that have a high probability of moving a company towards the desired future state, particularly in terms of levels of performance.

            After all these, effectivity and efficiency will be assessed preparing for the company’s changeability by redesigning, redeveloping and implementing measurement and evaluation systems that will tell us whether the company is going to where we said we wanted to go and how well we are doing along the way; as well as ensuring that cultural support systems are in place so that we are rewarding and reinforcing process. This is necessary to maintain the excellence we are achieving and to control levels of performance necessary to compete in future.

            In short, performance management is an ongoing communication process between employees and supervisors. Supervisors set expectations, monitor performance, and provide feedback to employees. Performance management directs and develops employee performance by identifying training and developmental needs, correcting problems, and determining raises and promotions.

Ethics in Performance Management

            The perceptions we impose upon reality are known by psychologists as mindsets that can be defined as "the psychological structures and schemas that make sense of our experience." For example, these mindsets are; all politicians are corrupt, people is business are only out to make money, my mother still thinks of me as child or a good education will equip you for life.

 People sometimes jump to the conclusion that to have mindsets is somehow wrong or unnecessary. In fact, mindsets are essential because without them we would not be able to understand and relate to the world in which we live. Although mindsets are essential as current reference points, they are not absolute truth, only opinions.  So we need to learn to step back and become aware of our own mindsets and appreciate how much they condition our experience of reality.

            Great leaders know that they must challenge everyone to become their best, but not everyone will become their best. And when they don't, we need to confront the individual regarding their performance. When a performance issue exists, there are really only two choices. It is either to ignore it or to confront it.

Truth be told, most managers are notoriously bad about confronting performance issues in a timely manner.

 Conclusion and Recommendations

During the course of performance management, the internal trainer has been active in facilitating sessions for new supervisors, following up to verify that classroom learning had transferred to the workplace, and being available as a consultant. In addition, new employee orientation introduces positive performance® management, with a follow-up by the supervisor providing details of the process.

With this, positive results had been found. Employee perception regarding fairness is the greatest change. Satisfaction-survey results initially improved by approximately 25% in this category and have not faltered since. Employee satisfaction results indicated employees trusted their supervisors to be fair. These results also indicated that employees felt they have a part in decision-making as it relates to their own work activities.

According to Lori Ulichnie, former Vice President of Human Resources, "Our managers have a positive framework to use when coaching their employees. This means they are spending more time actually working together to improve. As a result, we have experienced reduced turnover, better performance, and significant cost savings."

            In conclusion, simply put, performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc. Information in this topic will give you some sense of the overall activities involved in employee performance management. The reader would benefit from reviewing closely related topics referenced from the section, including basics concepts in performance management, organization performance management and group performance management.

            All supervisors should be trained about the policies and procedures. A large number of suits brought against organizations is because, although the organizations had clear policies, supervisors did not enact the policies because they did not understand them. Note that courts may consider policies and procedures as superseded by the actual behaviors displayed by supervisors.

            Document all intended policies and procedures and collect them in a policies and procedures manual. Having all policies and procedures in a manual facilitates training about them to all employees. All employees should have read the manual to understand and accept its contents. They should sign a form indicating so, and provide the signed form to the organization's administrator

References 

  • Bianco, Mark del. April 4, 2006. Bumps in the road for AT;T-BellSouth merger?.July 26 2007.
  • http://news.com.com/Is+the+AT38TBellSouth+merger+in+trouble/2010-1037_3-6057214.html
  • Batcher, Jeff. July 26, 2006. BellSouth Shareholders Vote Overwhelmingly to Approve
  • Merger Agreement with AT;T. Bellsouth Corporation. July 26 2007. ; http://bellsouth.mediaroom.com/index.php?s=press_releases;item=2897 ;
  • Campbelle, Susan. March 7, 2006. AT;T/SBC and BellSouth Merger Sure to Create Ripple
  • Effects Across the Industry. July 26 2007.;http://news.tmcnet.com/news/2006/03/07/1435915.htm;
  • Ulchini, Lorie. Positive Performance® Management. Excell Agent Services POSITIVE
  • Sutherland Ed. March 6, 2006. AT;T, BellSouth Merger Denounced. July 26 2007.;http://www.internetnews.com/bus-news/article.php/3589426
  • (No date). AT;T, A Brief History. July 26 2007.;http://www.att.com/history/history1.html;

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