management case study of at&t

AT & T

Group 5A

ENG3003 : Engineering Management

American Telephone & Telegraph

Tutorial Document : https://goo.gl/4I1nJE

Group Members

Student Name Student ID Programme

LI Wai Kin 15022276D IMT

FOK Ching Kit 15023151D IMT

WONG Kai Ho 15022322D IMT

TSE Chiu Tung 15024454D IMT

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Introduction

● AT&T Inc. - an American multinational telecommunications

conglomerate, headquartered at Whitacre Tower in downtown Dallas,

Texas, USA.

● The largest provider of fixed telephone services

● The second-largest provider of mobile telephone services

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History of AT&T

The former AT&T is well-known to be one of the subsidiaries of Bell

Telephone Company which is a joint stock company that founded in 1876.

The business provided by the AT&T in the 1980s was mainly the

government-authorized telephone services in the US and Canada.

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History of AT&T

At the time that AT&T was still a member of Bell Telephone Company, it was only a division of the company that have it’s own business.

After AT&T acquired the main company, it began to protect its franchise by performing various tasks:

This result the monopoly of AT&T until 1984 when the company lost in a lawsuit and forced to spun off its regional companies.

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1. Prevent other companies to enter the telephone market 2. Take over other companies to strengthen its own

Discussion Questions

1. Analyze AT&T’s organization based on functional and divi-sional structures.

2. Would a matrix structure be more effective for AT&T?

3. What is the purpose of the headquarters staff now that AT&T has split into three businesses?

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Analyze AT&T’s organization based on functional and divi­sional

structures.

QUESTION 1

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Traditional Structures

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AT&T has been adopted to not only one structure in the past century. In fact, the company has switched from one to another in order to survive in the market.

The structures that AT&T applied can be analyzed to 2 major strategies:

Organization Structures of AT&T

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1. Functional structure2. Divisional structure

Functional Structure of AT&T (1876-1983)

At the time that AT&T was still a member of Bell Telephone Company, it was only a division of the company that have it’s own business.

The former AT&T was only a small size company.

● Focus on only a few businesses (eg. telephone service in US)

● The works of the company are concentrated(eg. no extra business)

● Work units are grouped by people with similar skills or tasks

● All members of the unit are the expertises in that area

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Functional Structure of AT&T (1876-1983)

AT&T at that time divided the work according to their functions.

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Divisional Structure

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Divisional Structure of AT&T (1984 --)

There are two divisional structure that AT&T adopted.

From 1984 onwards, AT&T spun off its seven regional Bell companies.

Geographical-divisional Structure

From 1996 onwards, AT&T split into three operating units.

Product-divisional Structure

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Geographical-divisional Structure (1984-1995)

January 1, 1984, AT&T Corp.'s local operations were split into seven independent Regional Bell Operating Companies known as "Baby Bells".

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Product-divisional Structure (1996 onwards)

After the Robert Allen became the CEO, he announced a trivestiture plan in response to the The Telecommunication Act of 1996, resulting AT&T to split into three operating units:

Each unit is corresponding to one service only.

People working on the same product are grouped together.15

I. AT&T ServicesII. AT&T Network EquipmentIII. AT&T Global Information Systems

Divisions of AT&T nowadays according to Wikipedia

Advantages of divisional structure of AT&T

The divisional structure can effectively solve the problems in the functional model including the obsess of upward referral of decisions and the lack of a broad view on objectives’ performance.

This also bring advantages to the organisation:

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I. Improved coordinationII. Expertise focused on region/productIII. Easy restructuring

Comparison

http://keydifferences.com/difference-between-functional-and-divisional-structure.html17

Would a matrix structure be more effective for AT&T?

QUESTION 2

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Splitting into 3 Operating Units

❖ 2-boss system

➢ Power struggles ➜ Conflict in work priorities ➜ Dual chain of commands

➢ Task confusion

➢ Double cost for 2 team leaders

❖ To keep people on the right track

➢ Time consuming for team meetings

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Disadvantage using Matrix Structure

● Better cooperation across functions

● Improved decision making

● Increased flexibility in restructuring

● Better customer service

● Better performance accountability

● Improved strategic management

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Advantages using Matrix Structure

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Yes !

What is the purpose of the headquarters staff now that AT&T

has split into three businesses?

QUESTION 3

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3 businesses

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In 1996...

● New CEO C. Michael Armstrong has brought in an “invest or divest”:○ Sold AT&T’s Universal Card Services, its credit card division with 18 million accounts, to Citibank

for $3.5 billion.

○ Sold AT&T’s Solutions Cus-tomer Care unit, which pro-vides outsourcing and con-sulting for call

centers, to Cincinnati Bell for $625 million.

○ Bought Teleport Communica-tions Group, an upstart local phone company with strong

management. [1]

● Strategic Analysis: Identify and analyze core

values

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Focusing back on the Core Businesses

● " The biggest impact Armstrong is having at AT&T is to shake up the

old bureaucratic ways and shorten decision-making cycles. "[1]

● Disadvantages of matrix structures: Team meetings are time

consuming

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Improving Decision Making

● " Restructured compensation for AT&T’s top management, closely linking performance to salary. "[1]

● Advantages of matrix structures: Better performance accountability

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Improving Performance Accountability

Conclusion

Q1. Analyze AT&T’s organization based on functional and divi-sional structures.

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Conclusion

Q2. Would a matrix structure be more effective for AT&T?

Yes, the matrix structure is more effective for the current AT&T.

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Conclusion

Q3. What is the purpose of the headquarters staff now that AT&T has split into three businesses?

1. Focusing back on the Core Businesses

2. Improving Decision Making

3. Improving Performance Accountability

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References

1. Schermerhorn, J.R. Management, 6th Edition, John Wiley, 1999, p.433-435.

2. "History of AT&T," in Wikipedia, Wikimedia Foundation, 2016. [Online]. Available:

https://en.wikipedia.org/wiki/History_of_AT%26T. Accessed: Nov. 2, 2016.

3. S. S, "Business," in Business, Key Differences, 2016. [Online]. Available:

http://keydifferences.com/difference-between-functional-and-divisional-structure.html. Accessed: Nov. 2,

2016.

4. Nodir M. A., "Matrix Organization Structure: Advantages and Disadvantages" [Online]. Available:

http://bibliofond.ru/view.aspx?id=464506. Accessed: Nov. 4, 2016.

5. Rose J., "Advantages & Disadvantages of Matrix Organizational Structures in Business Organizations",

Chron [Online]. Available:

http://smallbusiness.chron.com/advantages-disadvantages-matrix-organizational-structures-business-or

ganizations-26350.html. Accessed: Nov. 8, 2016.31

References

6. Christopher C., "Advantages & Disadvantages of the Four Basic Organization Structures", Chron [Online].

Available:

http://smallbusiness.chron.com/advantages-disadvantages-four-basic-organization-structures-24062.htm

l. Accessed: Nov. 8, 2016.

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ENDThank you for listening

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