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The telecommunications industry in Australia.

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Introduction

Student ID: 13460378 Subject Name: Management Foundations Subject ID: MG102A Tutor: Fiona Garrood Date of Submission: 9th April 2003 Essay Question Study the recent history of one Australian organisation in the category of "strugglers" or "failed organisations". Provide some background about the organisation before analysing and describing how and why it failed, linking your discussion to management concepts and theories covered in this unit. For instance, problems of corporate governance and ethics might be linked to Unit 4, while issues of strategy can be linked to the concepts of Unit 6. Outline some of the lessons you have learnt in this analysis, again linking your conclusions to the theory of management (that is, support your "lessons learnt" by indicating their consistency or otherwise with the recommendations or views of other writers in the field). Table of Contents * Executive Summary.......................................................3 * Essay......................................................................4-8 1. Introduction..........................................4 2. Body................................................4-7 3. Conclusion........................................7-8 * Bibliography................................................................9 Executive Summary One. Tel limited founded on 28th February 1995, provided two main business services. Fixed lines, sold in the United Kingdom and Australia, which was leased through the Telstra network and mobile operations, a service through a new Australian network constructed and financed by Lucent Technologies. Almost 48% of the telecommunications industry was dominated by Telstra, Optus 33%, Vodafone 18%, AAPT and Hutchison (Orange) shared the remaining (Davidson and Griffin 2003, p.563). With the majority of the telecommunications industry in Australia driven by Telstra investors could see that telecommunications was in demand, providing One.Tel with the opportunity to dominate a sector of the market. ...read more.

Middle

Failure to notice that the billing system was inadequate, contributed to the downfall of one tel. "The directors of One. Tel, led by James Packer and Lachlan Murdoch, would pour over the cash projection for the company. What they should have done was walk into one of the call centres and talk to the operators. They would have discovered that the billing system did not work and that One. Tel, which had the potential to transform the Packer and Murdoch empires, was in deep trouble" (Gottliebsen 2003, p. 238). Although One. Tel was to blame for the billing system, however Telstra did not help. Gottliebsen (2003, p.246) discusses the difficulty caused by Telstra. The selling of One. Tel's fixed line calls were booked through the Telstra network. One. Tel receives the call details from Telstra six weeks late. Once the details are put into the billing system it takes a further six weeks to process the information and bill the customer because of the inadequate billing system. Therefore a twelve week delay between the time the calls are made and when the bill is sent. Customers took a long time to pay bills that were delayed that long and many disputes arose. The billing system caused great disorder in the call centres, due to the late billing of the fixed line business in Australia. The fixed line calls in theory produced approximately $300 million a year in revenue, so due to the billing delay the company needed at least $120 million extra in working capital (Gottliebsen 2003, pp. ...read more.

Conclusion

This guideline was overlooked by One. Tel when the bonuses to Rich and Keeling were not made public immediately. Acts like these prevent investors from being confident and having faith in the organisation in which they are investing in. It was also overlooked when the company's poor performance became apparent before administrators came in. One Tel did not abide by its responsibilities, as a consequence the directors of One. Tel could become legally responsible for the debts incurred during the bankrupt period, which could be more than $600 million (Ferguson 2001, p.45). A recent study showed that more two thirds of 20,000 consumers across 20 countries had a strong opinion "that large companies should do more than focus on making a profit, paying taxes, providing employment and obeying laws" (BSR). This shows that corporate governance behaviour is in demand. Without it a company cannot function effectively, and grow. It is now evident that One Tel did not comply within corporate governance and accounting standards. Therefore an organisation will not succeed if it does not adhere to the guidelines of corporate governance, and comply within accounting standards. This along with an appropriate business plan is a recipe of a successful company. The reliability of information disclosed by an organisation is questionable. The result of One. Tel was poor business planning, greed, unmanageable debt repayments, and failure to comply within the corporate governance. All of these were very important factors in determining the success of the company, but failure to acknowledge and ignore these factors will lead to a collapse of a company. ...read more.

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