A French Multinational Telecommunications Corporation Commerce Essay

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France Telecom S.A. is a French multinational telecommunications corporation created in 1988. Its head office is in Paris, and the current CEO is Stéphane Richard.

It currently employs about 180,000 people (half outside France) and has 227 million customers worldwide (2012) with an increase of +3.1% years on year.

However, in 2011, the group had revenue of €45.2 billion which represent a decrease of 12.4 % since 2006.

Orange represents its official brand for mobile and landline telephone services as well as its fixed (ISP), mobile internet services and IP television.

With a presence in over 160 countries, Orange Business Services has the world's largest seamless network.

Through this report I will try to explain how France Telecom, number one in France and among the leaders in the world, know problems of management and communication inside its organisation; and I will try to explain how these difficulties can be resolved using definition and theories coming from enterprise context module.


France Telecom is consequently an important French company. However, this firm is confronted, nowadays, to several critics since the beginning of the dramas of 2005.

In fact, since this year, 58 employees of France Telecom killed themselves due to very bad conditions of works (the two last suicides happened last June). When discontent was not manifested by suicides, it was manifested either by absenteeism or by the multiplication of sick leaves.

Indeed, an abusive system of management has been set up to initiate a forced march to modernization. Consequently a plan called "Plan Next" has been voted in a confidential manner in 2004 to encourage 22 000 employees to leave their jobs by their own in only three years. The executives of the company were also awarded in relation to the number of departure that they managed to initiate as well as they were commissioned on the turnover.

The aim of this new policy is to improve the organization of work and to be more competitive in front of its competitors.

All the means are good to carry out the objective of 22 000 employees less, as the fact to realize imposed transfers inside the company, from a service to another across the country every 3 years. This means that employees have to change completely their job for which they worked several years ago. Moreover, a lot of positions were deleted without any negotiation, to reach the objective of a plan called "degreasing staff plan".

France Telecom tried to calm down the polemics engendered by the ex-CEO Didier Lombard by making him redundant. This was just symbolic so they did not manage resolves the real problems.

The explanation is as follows. At its creation in 1988, France telecom was a public company of telecommunication in France but in 1997, the firm began to be privatized. And this is the origin of the problems. In fact, it is a radical change of culture because 70% of the workers in France Telecom were working for the company before it was privatized.

The French giant of the telecommunication moved therefore from a public service culture to a culture of private enterprise governed by private profit.

Today, the French state has 26 % of shares in the company and two third of the workers are still civil servants therefore they can't be fired. That explicates why the top manager and the executives has chosen this type of management by maximizing utility of the employees inside the firm and to encourage them to live France Telecom by their own.


From the Radical to the soft change of culture

As mentioned previously, France Telecom was a public company which changed into a private company. This radical change was catastrophic and has led to a social crisis very published in the media in France. The problem is that the top executives did not realize the importance of culture which is define as "a learned, shared, compelling, interrelated set of symbols whose meanings provide orientations for members of society" (Terpestra and David, 1991).

In fact, they passed from a public management to an American management where the employees are always controlled in their work without having a room for maneuver.

They did this suddenly without transition and in a radical way for the workers.

To take an example, when goals are not met, it is advised to change jobs, they try to push them out or punish them and this is very different for the staff.

The thing is that France has a lot of social values; very powerful in relation to other country in the world even developed country. These values are the symbols of the French history and cannot be overthrown from one day to the other.

Let's show you some examples: in the place of work, the French have a lot of social rights. They have the trade unions, the work doctor, the work inspector, the work committee and so on … All these persons or institutions are there to secure the work of a French employee.

However, the managers went far away (and still going far away) from the social rights specific to France and which does not exist in United-States of America or in UK for instance.

By this way, France Telecom has broken the traditional French culture within its own organisation.


To resolve this problem, France Telecom need to rebuild the culture within the company, the managers need to come back to the basics of French culture which provide jobs security. It is right that the company need to be more competitive because of their new statute. Nevertheless, the changing has to be more soft and assisted for the employees. In fact, by changing the job of numerous employees every three years, the workers cannot see what can be their individual future inside the company. This is therefore a factor of demotivation and inefficiency.

We can ask ourselves: why build a culture for a company? The answer is because "the culture is essential in the functioning of a company: she allows to differ, to make cost saving, to build up to himself a managerial style, and finally to attract the talents." (Olivier Devillard)

All right, but how can we rebuild or come back to the original values?

The managers can do a culture audit in order to know what are the values shared in France Telecom and adapt the management to these values.

France Telecom is now in a new environment when the competition is omnipresent. So, the company has to adapt its self. This can be done but not as the company did up to now. What we have to think it is that the civil servants are in a completely new world. That's why, formation can be a solution for the workers because this can permit a better understanding of the situation and it permits to have more efficient employees. Furthermore, in a general way, "the training facilitates the changes of internal structuring, contributes to the career developments and relaying on the evolution of the jobs and the qualifications. So, the training policy is an axis which allows the increase of the performance of any company." (Le Boterf, G., 1990)

The training has therefore the virtue to create values and new norms (so in a certain way a culture) more close to this new environment of competition. Moreover, training permit to have motivated employees and the "quality of service provided by motivated, helpful and knowledgeable staff is probably the single biggest advantage all firms have, big and small." (Paterson, 2005)

Need of a better communication and team spirit to have motivated employees

Communication and...

As we have seen previously, France has strong social rights in work with a lot of different actors as the work doctor or the union which are there to assist the employee. It is right that France Telecom try to resume the dialogue with the trade union which is a good thing but it is not sufficient. The solution is to use efficiency these entities (the trade union, the work doctors, the work inspector...) to have better communication between them (It is true that can be a little bit paradoxical for a company of telecommunication). Indeed, weekly or monthly meeting and report have to be set up to act in an efficient way and warn psychosocial risks engendering the suicide.

The communication solutions are numerous and can be sum up by this graph bellow:

One solution important is in the organisational structure of the company. In fact, there is a downward communication for some and a fortifying communication for the others that means that communication is too slow and inefficient. Thus, we can propose an organisational structure which is composed of matrix of teams.

... team spirit ...

The solidarity in a company, above all in a big company as France Telecom, can be very powerful. That's why, all the employees, executives as others, have to work together, in team, to resolve to improve the relationship between executive and workers.

"It is not a 'solo flight' but team spirit that leads to business success" (Vyakarnam and Handleberg, 1998);

"Team should travel on the trust of one another and lift each other along the way like geese because people who are part of a team and share common direction get where they want to go easier and quicker" ( Francis Neshamba, lecture 6, slides 34 to 36).

…for a better motivation

You are probably asking yourself what is the link between, having a good internal communication or team spirit, and the motivation of the employees.

This is simple. Firstly, the internal communication is a good mean to mobilize people but it is the manager that has an important role for the motivation of his co-worker because of the daily relationship that they have. And to manage to develop the employee implication by the communication, it is necessary to think firstly to what the employees are motivating. France Telecom can do it by establishing evaluation and motoring. The advantage it is that is quick, the employees will express their selves freely (anonymous questionnaire), and finally the manager will see from these points, how to motivate them further.

Furthermore, the communication can be useful because France Telecom can mention what are the objectives; and an employee will be motivated if they know why and to what he is working (what is the aim?). It's necessary to give meaning to what is asked, placing his contribution in the business.

Then, the workers have to be recognized for the job well done and the employees of the company will appreciate the congratulation spontaneous and personalized.

Greiner's model (see graph below) can also be used to motivate people. In fact, this model provides a system of management reward in relation to the size, the evolution of a company. I think that management reward can also be true for employees not in the management corpus. In my case I can argue that France Telecom is in the phase 5 because the company is in a moment where it has to face the problems. So, the model proposes to use team bonus and that fit totally with team spirit.


Phase 1


Phase 2


Phase 3


Phase 4


Phase 5


Management focus

Make and sell

Efficiency of operation

Expansion of markets

Consolidation of organisation

Problem solving& innovation

Organisational structure


Centralised & functional

Decentralised & geographical

Line staff & product groups

Matrix of teams

Top management and style

Individualistic & entrepreneurial





Control system

Market results

Standards & cost centres

Reports & profit centres

Plans & investment centres

Mutual goal setting

Management Reward Emphasis


Salary & merit


Individual bonus

Profit sharing & stock options

Team bonus


Crisis of leadership

Crisis of


Crisis of control

Crisis of red tape

Crisis of ?

Source: Greiner's Model, 1972

The other link that exists between internal communication and motivation is the following. To be motivated, the worker need to be listened and participate actively in the company because everyone must that he is important within the team. "The role of the internal communication is to create links and to revitalize the exchanges by proposing steps which foster the listening, the decompartmentalization and the work in network" (Emmanuelle Bravard).

A management that has failed

Why not a democratic or participative management?

The mode of management is maybe one of the most important points to resolve nay the most important. This is due to the fact that there are links between the problems of culture, of communication, of motivation and the mode of management.

The enterprises as France Telecom have to be characterised by a strong corporate culture in creativity, in human resources management (communication, team spirit, motivation) and in sophisticated technology. That's why it's important to restore these points. But these actions can be undertaken just by the executives, by the managerial corpus.

However, the management behaviour will act in function to the style of management chosen.

In the case of France Telecom, the management is not a democratic management but an autocratic one (See the graph bellow).


In fact, the mode of management of France Telecom is based on the fear and on the submission of the employees. The Medias have even called the management in the company, the "abusive management" or "the morbid management" to do reference to the employees that passed away. The decisions come from the top of the organisation without asking anything to anyone. It's exactly the definition of autocratic management according to Rensis Linkert where the communication is low and where the sanctions are omnipresent.


Source: Google image

This had as advantages to obtain results very quickly but the motivations, the creativity of the employees are forgotten and this entire thing has led to a social conflict.

Again I will use Greiner's model for the solution. Indeed, a participative type management seem to me appropriate.

The principle is to have strong links between the employees and d the managers. By using group works, the employees will be totally associated to the decision- making. The manager forms part of the group to supervise the workers and this has a lot of virtues.

First of all, the motivation will be developed because the employees will be encouraged to participate. Because we don't have to forget that "Leadership is a process through which leaders establish direction by motivating followers to achieve the outcome" (Conger, 1998). So the mains objectives will be fixed by the top managers while the allowance of the resources, the organization of the work and the command are the works of the group leaders.

Secondly, this method permits to manage difficult questions due to the diversity of opinions.

We can summarize advantages and disadvantages in a table:




Simple to follow

Limited arguments

Individual abilities can be developed

Staffs may feel more committed

Stronger relationships between colleagues


Unable to contribute ideas

Often viewed as dictatorial or controlling

Take long time to make a decision

May cause conflicts

Source : Paul.B, 2011

Not appropriated means

France Telecom needs to be competitive and for that it is necessary to restructure the organization.

That's why the direction has decided to encourage 22 000 persons to leave the company. The methods used are not good as we were able to notice it.

What I propose is to stop first of all the imposed transfers but the company can propose it. In fact, employees can be interested by the transfers but not all. Then, contrary to the previous CEO (which was Didier Lombard), I propose to the management to work actively to establish a social plan.

A "social plan" is "a set of measures which have to have for objectives to avoid the dismissals or to limit the number and to facilitate the deployment of the staff being the object of a redundancy" (http://cftc.manpower.free.fr/spip.php?article180).

To take some examples, instead of encouraging the civil servants to leave by their own by using moral harassment or dismissing the other, France Telecom can create a voluntary part-time work for workers who want. Helps can be a solution by helping people who want to create their own business and leave their job.

The company has to provide with a "social plan", a plan to support the search a job for those who have been dismissed and a better organization of working time (" which is the adaptation of schedules and working rhythms to the needs for the company"


In the end, I would like to highlight the theories used by the company which were really unproductive. In fact, the executives have training to encourage the employee to leave France Telecom. One of the theories used is from a psychologist and behavioural scientist called Doctor Elisabeth Kubler-Ross. She created "the seven stages of grief" destined to assist people who are at the end of their life and so to accept their imminent death.

The seven stages of grief


Source: Google Images

These theories discourage the employees. The discourse between the management team and the employees has to be focused on ambition, project, of future mission instead of the seven stages of grief. In fact, employees are often unmotivated without resigning.


To conclude France Telecom is very big company which knows problems of management due to a change of culture engendered by the privatization of the company. The style of management is such hard that employees are completely unmotivated which has led to absenteeism, sick leaves and 58 suicides which is enormous.

Despite of few good initiatives as the fact to reconnect with the dialogue with the trade union and by changing the CEO Didier Lombard, authors of several polemics, France Telecom needs to change a lot of things. First of the change concerning the new statutes of the company has to be softer and assisted. France Telecom has to do with the social values within it organisation to not discourage the employees and the break solidarity between employees. Eventually, the style of management needs to be quickly reviewed and changed into a democratic management.