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Telecommunication Industry: Whenever we hear the name of Telecommunication the first name comes in our mind is, "Yes" its Telecom. It is the largest service provider in the area of telecommunications to whole New Zealand and its has reached every corner of New Zealand through its various products and services they have produce so far. The company's main business is providing phone lines, selling broadband and mobile connections. Telecom was established in 1987 and since then the company has excelled in providing different technologies, products and services to its New Zealand providers. Since the establishment Telecom has taken-over different ventures; most of the projects have turned out to be a success making Telecom one of the largest companies by value on the New Zealand Exchange. One of the difficult Situations which Telecom has experienced so far is Ferrit. I believe the life is full of surprise its doesn't have to be good all the time, sometime it has bad too. So Ferrit is one of the Telecom hard experienced. In 2005 Telecom launched Ferrit.co.nz as online retail store with about 150 retailers and after four years. That's in the year 2009 Telecom had to shut down the operations of Ferrit, As it was not making any profits for the company rather it turned out to be a financial disaster. This report will discuss and analyse what went wrong on the part of management, Control and Planning in the running of the website and what they could have done to save the venture. How it affected the Environment, Community, and people involved within the company. And Also it details about Importance of Ethics and Social Responsibility of Organisation, Its Structure, The Style of Leadership, the strategies they use to motivate their employee and how team can influence the organisation.
Ferrit.co.nz The website was set-up in 2005 and the online retail market scene was maturing and people had high expectations from this venture. Telecom launched Ferrit to further develop New Zealand's online retail market.
Background of the issues encountered by Telecom
Ferrit failed due to poor technology, poor usability and a poor business model according to the Media Analyst Lance Wiggs. The management refused to confirm to media that how much they spent or made on online venture but its closure after only four years of operations came as no surprise to the technology analysts and the internet sector. They were aware that even Telecom's huge spent and advertising could not save the venture as lot of decisions and ways to manage the online store went wrong which will be discussed in detail later on in this report. The website merely relied on taking a large commission from retailers for directing traffic to their sites. But its 98 retailers could easily set up their own sites and buyers could find them via Google. In late 2009 after a six-monthly review lead to the recommendation that Telecom to close Ferrit.
Purpose of the report -
The Purpose of the organisation and Management
Is to understand how external factors influence the operations of a company like Environment, Organisation Behaviour and by applying knowledge to a typical (tough) situation.
Learn and understand the importance of Ethical and social responsibility of the Organisation.
Understand the elements of Planning and Control and apply process to given situation and solving and apply range of techniques to the given situation.
E.g. understanding where Ferrit the Telecom venture which i am discussing in this report went wrong, recommendations are provided what could have been done to save Ferrit. Or in future if Telecom wants to invest again in the same nature of project what different they can do to avoid the loss.
Understanding Organisational Structure, followed by Telecom and its advantages and Disadvantages and also recommending a Structure.
Understanding and applying knowledge of leadership, motivation and delegation.
Understanding Team Dynamics and how teams can influence the organisation.
The organisation and Management:
Definition: Management is the act of accomplishing or achieving goals of organization in the most productive and proper manner through planning, organizing, leading and controlling organizational resources.
And The purpose of Telecom is to provide best service to whole New Zealand in the area of Telecommunication like phone, Mobile phone and Broad Band.
Planning (Setting up the goals and reaching it with best possible way)
Controlling (Keeping an eye and making correction)
Organising (Assigning the task and use best possible resource)
Slogan of the Company: Connecting New Zealanders.
Heroes : Dr Paul Reynolds.
Ceremonies : They often do ceremonies in every 6 months and they even participate in Rugby matches to cheer all blacks etc.
Impact of General and External environment:
Environment - Telecom's technology can help reduce the environmental impacts of its travel demands as well as those if its customers. The introduction of the Video Conferencing technology facilitates cheaper and more frequent contact nationally and internationally between work colleague and clients. Telecom's technology has reduced the environmental impacts of the travel demands as well as those of the customers. The use of Telecom's video conferencing has generally increased each year.
Political - Telecom provides certain specified telephone services on specified terms. Telecom has updated its Kiwi Share Obligations by entering into the Telecommunications Service Obligations Deed in December 2001. The Telecommunications Service Obligation is currently subject to review by the Government. Also government factors which affect the company are Tax policy, Labour laws, environment laws, Trade restrictions, tariffs etc.
Economic - Telecom is one of the largest companies by value on the NZ Exchange. The company employs over 7000 staff in NZ and more than 1600 in different countries. Other economic factors which affect the company are Interest rates, exchange rates and the inflation rates.
Social - The company has a range of social responsibility focused programmes and initiatives. Some are First Foundation - providing funds for NZ students to study further. Other programmes are Disaster relief, internet security etc.
Technology - Telecom's products and services are all about providing latest technology. About and year or two ago Telecom has faced a huge loss due to its XT network outage through Dec-09 to Mar-10. The mobile service was totally down in Taupo. The network got crashed due to serious hardware failure. As a result of loss of service Telecom has offered a five million dollar compensation package for its customers. But on 14 May 2012 the Telecomm has announced live customer trials of Long Term Evolution (LTE) mobile technology in late 2012 in preparation for the evolution of the XT network to 4G. The delisted from the New York Stock Exchange, with the last day of trading 9 July 2012. The CDMA network closed at midnight on 31 July 2012. Simon Moutter's first day as CEO Telecom was 13 August 2012.
Legal - Telecom complies with the following listed few government/legal acts and more -
Consumer Guarantees Act
Fair Trading Act
Employment Act regarding employment rights
Companies Act 1992
Health & Safety Act 1992
Situation: Telecom becoming first to provide 4G technology.
The Situation when company is to provide first time 4G technology is always good Situation when the organisation trying to accomplished new goal which was planned through the best possible resources.
Who doesn't like appreciation in this world, When media is taking your name all the time for good reason the employee who works with the organisation, gets self-motivated more dedicated to work and trying to reach the success as soon as possible and after reaching the success. Setting up another goal, this is now what's happening in Telecom.
Everyone from outside want their name to be associate with "The Successful organisation".
An analysis of internal and external environment is very important part of the strategic planning process. Environmental factors internal to the firm usually are strengths (S) or weaknesses (W), and those external to the firm are opportunities (O) or threats (T). An analysis of these four environmental factors is referred to as a SWOT analysis.
SWOT Analysis helps in matching company's resources and capabilities to the competitive environment in which it operates. SWOT Analysis helps a company to know where it stands.
Strength: local owned, largest telecommunication provider
Weakness: Got lot of Competitor like Vodafone, 2 degree etc
Opportunity: Good Technical Team and Can everybody ready to invest
Threat: Like Ferrit goes down if other goes down too then it will be real trouble.
. Ethics And Social Responsibility
The company expects all its employees and directors to maintain the highest ethical standards. Telecom's Code of Ethics establishes the framework by which Telecom employees (including the CEO and CFO) are expected to conduct their professional lives by facilitating behaviour and decision-making that meets Telecom's business goals and is also consistent with Telecom's values, policies and legal obligations. The Code of Ethics is available to all Telecom employees via Telecom's intranet site.
The Code of Ethics addresses:
Conflicts of interest
Receipt of gifts
Expected behaviours (including fair dealing)
The proper use of Telecom's assets and information, compliance with law and Telecom policies.
Reporting issues regarding breaches of the Code of Ethics legal obligations or other Telecom policies
As far as Telecomm internal culture is considered the employees are really very satisfied with Telecom's norms values, artefacts (tangible signs) and behaviour of members of the other organisation. By conducting the survey of the sales employees in Telecom that 90% of the employees of Telecom to took the Training most effective, The major components of Telecom culture are:
They believe in creating an environment where talented individuals can shine.
There breadth of operations means they can offer a multitude of opportunities tailored to your career aspirations.
People can specialise by working in there area of expertise and broaden there skills by moving between business units.
Fresher's can get a chance to work on some of the biggest and most exciting projects in New Zealand with most experienced people.
Basic approach is the development of employees no matter what their goals. This is addressed in a number of ways like.
Performance management: All employees develop their own individual performance plan with their manager. This will help to facilitate ongoing discussion and tracking to help ensure goals are met.
Career Planning: They wholeheartedly encourage the movement of people within the telecom group.
All vacant roles are advertised internally before being opened to the wider market.
The have clear plans detailing the skills and experience required for all roles within the group.
Identify likely career steps within the group to help the people think about where they are going.
3. Training and Development Programmes: Telecom has a number of Development and training programmes to help ensure their employees so that they can able to perform at their best, these cover areas such as Managing people, managing money and Influencing people.
Purpose of Planning and Control:
One of the most important part or foundation part of any successful organisation is planning and Controlling the things. Well every management has different planning and its differ to the organisation, In Telecom the management realize that organisation plan must provide the blueprint for the company control system. The objectives, missions, goals, strategies and plans change, then controls should be change also.
The organisation (Telecom) standards of the control systems are derived from previous years budgets rather than from current objectives of organisation plans Which is also referred BYO That's Beat year Ago as The result is that employees at lower levels are simply given "numbers to make" based on factors of which they have little knowledge and over which they have practically no influence.
The most interesting and exciting part they have made the charts and hook up in main notice board of every department like Finance, HR, Sales, Technical etc..
Finance: The Last budget was some 1 million dollars and we have used 1.2 million dollars, So they have to come with some strong plan, so that they shouldn't cross the budget limit but before find the root cause.(its not true amount as no organisation leaks its budget information and its just rough figure)
Human Resource: The last year we hired 100 people, Out of them 50 promoted, 25 didn't show progress 15 left and 5 are fired. So the plan must be focussing rest 50% who hasn't done well.
Operations: Behind the best service is the best team. The consultants are drawn from the top of their class, experienced leaders in their specialist fields.
They have proven success in turning service operations into profit centres.
That may come from consolidating several sites into a single, centrally controlled site or implementing multiple sites in diverse locations.
Their collective knowledge and experience will improve their sales and customer service delivery.
The Team would answer the question about:
Strategic Business Planning
Budgeting and Finance
Professional Development and Training
Technology and Support
The contact are powered by the most highly equipment and most high rated technology and its Contact Centres are continuously challenged by change in the marketplace and pressure to maintain performance. To meet these challenges, management must periodically conduct an in-depth analysis of its Contact Centre operations.
Looking from outside your business, we can analyse objectively and recommend improvements through:
A world-class Contact Centre gives your company a competitive edge by strengthening customer loyalty; boosting sales and stimulating repeat business. Our team will advise how you can ensure your technology works for your business by improving service and efficiency through:
Infrastructure review and recommendations
Process or Relationship between Planning and Control
Measure and Compare
Feedback and Coach
Take corrective Action.
Communication and co-ordinate
Analysis of Planning and Controlling and issues face by the managers:
Complacency: Individuals either do not see signs of danger/opportunity or avoid them. They are lazy in taking their decisions or taking too much of time in thinking.
Defensive avoidance: Individuals either deny the importance of a danger/ opportunity or deny any responsibility for taking action The manager fearing too much on taking decision or avoiding to take a decision.
Panic: Individuals become so upset they frantically seek a way to solve the problem. Managers always take a rash decision in hurry.
Deciding to decide: Decision makers accept the challenges and follow an effective decision-making process.
Functions of Management in telecom
Telecom is based on "Divisional Structure" also called "Product structure" as Telecom has different products and services to provide. Telecom's business units (a brief) are listed below -
Each division within the Telecom divisional structure contains all the necessary resources and functions within it. Each business is aligned with Group's overall objectives and strategies. Each business works to an annual business plan which sets out financial targets and the research, development and resources required meeting or exceeding the plan. Performance is reviewed monthly and adjustments to spend, activity and resources are made where necessary.
The board and management are committed to ensuring that Telecom maintains international best practice governance structures and adheres to the highest ethical standards. The management ensures that the Telecom business and support groups
Identify risks that relate to the achievement of their business objectives;
Assess those risks and determine if they are acceptable under existing controls or whether additional treatment is required;
Respond appropriately to the risks, based on that assessment
Monitor and report on the current status and the effectiveness of their controls.
The management provides quarterly, half year and yearly reports to the board and the internal and external stakeholders. Management plays an important role in business planning, investment analysis, project management and operations management.
Analysis of Organisation Structure:
Well said by newton for every action there is equal and opposite reaction and every medicine which gives soothing and relief has also a side effect. The same thing goes on with Organisation Structure it has some advantages and disadvantages too which are listed below.
Advantages and Disadvantages of the Divisional Structure
The divisional structure focuses the attention of employees and managers on results for the products and customer
Divisional structure is flexible and responsive to change, because each unit focuses on its own environment. Coordination among different functions within the division benefits from singleness of purpose.
Each division is a self-contained unit, responsibility and accountability for performance are easier to target
The major disadvantage of divisional structure is duplication of activities and resources. Instead of a single marketing or research department, each division maintains its own.
The structure loses efficiency and economies of scale; and a lack of technical specialization, expertise, and training can result. Interdivisional coordination may suffer, and employees in different divisions may feel that they are competing with one another
This structure results in duplication of resources because, for example we need to have equipment, for each division. Obviously, it does not support the exchange of knowledge between people working in the same profession because part of them are working in one division and the others are working in other divisions
C. Issues faced by Management
There was failure at a number of levels from Telecom, including poor strategy, poor execution, and most important poor governance -
The idea behind the venture was great and it could have turned into a success but didn't seem to happen. While there were opportunities to make it successful, the prosecution was flawed. The problem was that the proffered solution did not offer anything of value neither to the customers nor to the retailers. The problem was that for an aggregator site like Ferrit to work properly the retailers had to get their own websites in order, and once they had them in order there was no need for Ferrit. The business model was fundamentally flawed. It relied on taking a commission from retailers for directing traffic to their sites, charging them big commission. The flaw was that the retailers can simply set up their own sites and buyers can easily find them using Google.
Understanding the Term Leadership, Motivation and Delegation:
Leadership: A simple definition of leadership is that leadership is the art of motivating a group of people to act towards achieving a common goal. This essay is describing and analysing the concepts of leadership and its style which is used in Telecom.
Description of Leadership:
The organization leaders in the telecom practice bring broad strategy and organization skills, as well as specific expertise in areas such as Group/Operating Company organization design, talent management and leadership development, innovation, and merger management and cultural change. Global team of Telecom has extensive experience working in mature and emerging markets, with recent engagements with Australian Companies. And it is a self-organizing - better, a self-leading - group may sound terrific. But if you're an Share holder or involve in top level management, you're likely to have some valid reservations about surrendering the fate of your investment and goals to that process. Leader of Telecom I mean the top level management directly or through the medium of professional executive management, to direct and control the operation of that process. This is accomplished through placing a distinct and separate authority at the top of the organization, in order to manage the otherwise self-directing leadership that exists naturally within it. Its driven perfectly by leaders like Dr Paul Reynolds, Mark Ratcliffe, Chief Operating Officer for Technology, who recently appointed as CEO of Telecom's.
That authority at the top is not leadership as commonly understood. Rather, it is command. It gives legitimate expression to the superior role of management over the inferior function of leadership.
As Telecom which is the largest telecommunication company which has very diverse culture, it has a great impact on leadership style. According to my study and interview Telecom Company has adopted combination of two styles i.e. Democratic and Laissez-fair.
In democratic type of leadership, the behavioural of the leaders who tend to involve the group in decision making, let the group determine work methods, make overall goals known, as an opportunity for helpful approaches.
Where as in laissez-fair, the behavioural style of the leaders who generally give the group complete freedom, provide necessary materials, participate only to answer questions, and avoid giving feedback.
Internal and external factors that stimulate desire and energy in people to be continually interested in and committed to a job, role, or subject, and to exert persistent effort in attaining a goal.
Motivation results from the interactions among conscious and unconscious factors such as the
(1) Intensity of desire or need,
(2) Incentive or reward value of the goal, and
(3) Expectations of the individual and of his or her significant others.
In Telecom they motivate their employees by recognition to their work,
Putting up their name on Notice boards
Sending Emails and making awareness of the employee's work
Increase in salary
Incentive and also
By taking to Rugby matches.
Issues related to Motivation:
Well the topic goes back to the basis which described by Maslow in his motivational theory. Here and in every organisation issues would be same like depends person to person what he actually want rather than one common goals. The differences would be..
Analysis of Leadership its styles with theories and references:
Authoritarian leaders, also known as autocratic leaders, provide clear expectations for what needs to be done, when it should be done, and how it should be done.
There is also a clear division between the leader and the followers. Authoritarian leaders make decisions independently with little or no input from the rest of the group.
Decision-making was less creative under authoritarian leadership and it is more difficult to move from an authoritarian style to a democratic style than vice versa. Abuse of this style is usually viewed as controlling, bossy, and dictatorial.
Authoritarian leadership is best applied to situations where there is little time for group decision-making or where the leader is the most knowledgeable member of the group.
At present, the autocratic leadership mostly seen in military.
5 main Disadvantages of Autocratic or dictatorial leadership are as follows:
a) One way communication without feedback leads to misunderstanding, and communications breakdown.
b) An autocratic leader makes own decisions which can be very dangerous in this age of technological and sociological complexity.
c) It fails to develop the worker's commitment to the objectives of the organisation.
d) It creates problems both with employee morale and production in the long-run; due to their resentment.
e) It is unsuitable when the workforce is knowledgeable about their jobs and the job calls for team work and cooperative spirit.
At present, no leader wants to adapt autocratic leadership style except in militaries and some small businesses.
Democratic leaders make the final decisions, but they include team members in the decision-making process. They encourage creativity, and team members are often highly engaged in projects and decisions.
There are many benefits of democratic leadership. Team members tend to have high job satisfaction and are productive because they're more involved in decisions. This style also helps develop people's skills. Team members feel in control of their destiny, so they're motivated to work hard by more than just a financial reward.
Because participation takes time, this approach can slow decision-making, but the result is often good. The approach can be most suitable when working as a team is essential, and when quality is more important than efficiency or productivity.
This What Telecom Adapts the style of leadership and which give much better output and more welcome in environment.
Laissez-faire leadership, also known as delegative leadership, is a type of leadership style in which leaders are hands-off and allow group members to make the decisions. This is generally the leadership style that leads to the lowest productivity among group members.
Characteristics of Laissez Faire Leadership:
Laissez-faire leadership is characterized by:
Very little guidance from leaders
Complete freedom for followers to make decisions
Leaders provide the tools and resources needed
Group members are expected to solve problems on their own
Benefits of Laissez-Faire Leadership
Laissez-faire leadership can be effective in situations where group members are highly skilled, motivated and capable of working on their own. While the conventional term for this style is 'laissez-faire' and implies a completely hands-off approach, many leaders still remain open and available to group members for consultation and feedback.
Implications for Management
Maslow's theory holds, there are some important implications for management. There are opportunities to motivate employees through management style, job design, company events, and compensation packages, some examples of which follow:
Physiological needs: Provide lunch breaks, rest breaks, and wages that are sufficient to purchase the essentials of life.
Safety Needs: Provide a safe working environment, retirement benefits, and job security.
Social Needs: Create a sense of community via team-based projects and social events.
Esteem Needs: Recognize achievements to make employees feel appreciated and valued. Offer job titles that convey the importance of the position.
Self-Actualization: Provide employees a challenge and the opportunity to reach their full career potential.
Delegation: The work been assigned to a particular person.
Here in Telecom they don't overburden the work to one or two employees but instead they divide and Split the work by knowing person Capability of meeting the Deadlines.
Issues in Delegation and Management Relationship:
The employee will lose interest in the job and if force on it.
The job may be done but not to its best.
Horse play will come in picture if the delegation not proper not to the right person.
Team Structure and Dynamics (Roles, Leadership and Performance):
Definition: In any organizations, company, work place community groups and sports all use teams to accomplish goals. The dynamics of teams determine if these goals will be met in an efficient manner. Identifying team dynamics and understanding positive and negative outcomes that may occur due to the dynamics will assist you to achieve team efforts or A Group of people that share and work towards accomplishing a common goal are referred to as a team. The dynamics of a team depend on each team member. Unseen forces that exist in a team between different people or groups are called team dynamics and can strongly influence how a team reacts, behaves or performs. Many factors influence team dynamics, such as personalities of team members, how the team operates, how the team views itself and the team's organization.
Analysis of Team Structure:
Telecom requires certain senior people (the CEO, CFO, Group General Counsel, Group Company Secretary and the General Manager Investor Relations) and in some cases the chairman, to discuss whether information is material prior to its release.
Telecom has appointed a Disclosure Officer (currently the General Manager Investor Relations) who, together with the Group General Counsel, is responsible for ensuring that all material information is lodged as soon as practicable simultaneously with the NZSX, ASX and NYSE. The Disclosure Officer ensures that such information is published Telecom's website where appropriate, with further dissemination through broadcast emails to news agencies and other market commentators. Disclosure practices are monitored by the Disclosure Officer.
Telecom has also appointed certain executives as authorised spokespeople who are required to ensure that all proposed public comments contain information already in the public domain or information which is not material. Management is responsible for ensuring compliance with the policy.
Telecom's website contains media releases, quarterly financial information, current and past annual reports, dividend histories, notices of meeting, a list of shareholders' frequently asked questions and other information about the company.
Telecom web casts its investor and analyst briefings over its website where appropriate.
Full participation of shareholders at the annual meeting is encouraged. Telecom web casts its annual meeting live. Shareholders have the opportunity to submit questions prior to each meeting and are given the opportunity to ask questions of the chairman, directors and auditors at the meeting. Each web cast is archived on the Telecom website after the meeting along with a copy of the minutes of the meeting.
Management of the organisation and Internal policies and procedures:
All Telecom employees are responsible for ensuring that Telecom carries out its business activities in a way that maximizes business opportunities, has due regard to all applicable legal and regulatory requirements and minimizes Telecom's exposure to unacceptable legal and regulatory risk. Managers are responsible for making sure that Telecom people are given appropriate information and training to assist them in complying with legal, regulatory and policy compliance obligations.
Telecom has a number of core internal policies and procedures, including:
Code of Ethics
Managing Risk PolicyÂ
Insider Trading PolicyÂ
Market Disclosure Policy
Health and Safety Policy and related protocols
Human Resources Policies, including employment, remuneration and benefits, equal opportunity, anti-harassment and discrimination
Legal Compliance Policy
Information Management Policy
Delegation of Authority Framework
Undertakings compliance framework
The Telecom Undertakings Codes of Conduct form part of the Undertakings Compliance Framework and explain the legally binding rules in the Undertakings in plain English for Telecom employees.
The Undertakings Compliance Framework incorporates breach reporting and monitoring and measurement mechanisms to support the business units in assessing their ongoing compliance with the various obligations required by the Undertakings.
Telecom employees and contractors complete initial online training and/or attend operational separation workshops and/or have read the appropriate Codes of Conduct. Employees are also required to complete annual refresher training. Telecom reports quarterly through the KPI Reporting framework on key compliance indicators.
Escalation procedures and whistle blowing
Any Telecom employee (including a contractor) who becomes aware of a legal, regulatory, policy or other compliance issue has a responsibility to report it using either of Telecom's breach reporting, whistle-blowing or financial compliance escalation frameworks. In addition, Telecom has a procedure whereby accounting, auditing or internal control breaches or concerns may be reported confidentially to the Audit and Risk Management Committee.
Insider Trading Policy and trading in Telecom shares
Directors and employees are subject to restrictions under the law relating to dealing in Telecom securities and other related Telecom derivatives if they are in possession of inside information. Inside information is information that is not generally available and, if it were generally available, a reasonable person would expect it to have a material effect on the price or value of Telecom securities.
Two decisions organisation have taken based on social responsibility
1. To discourage cyber and text bulling Telecom works with relevant authorities to ensure a "no tolerance approach" to the use of the Internet or communications technology in a way which is harmful or hurtful to New Zealand children.
The company also has a long-standing relationship with the Stop Bullying campaign - which is part of the New Zealand Police Youth Education Service's Kia Kaha programme taught in primary and secondary schools. Telecom supports the campaign through sponsorship of pamphlets advising parents, caregivers and young people on how to deal with bullying.
Telecom has supported the Internet Safety Group - Net safe - and New Zealand Police Youth Education Service's production of a pamphlet for parents called Keeping Kiwi Kids Safer in Cyberspace
2. Telecom is a member of the New Zealand Telecommunications Carriers Forum which has developed the Code of Practice for the Provision of Content via Mobile Phones ("Code"). This industry code is designed to ensure they provide content on mobile phones in a socially responsible manner, and help protect minors from inappropriate content. The Code deals with commercial mobile content, internet content, illegal content, unsolicited bulk communications, and malicious communications, and includes information on what to do if someone disagrees with a Restricted/Unrestricted content rating
Note: From Telecom Market Disclosure policy I have got this information, as interview wasn't enough to ask all the question.