Telstra: Change Management Strategy

Executive Summary

Change management is a word that may appear to be a cliché and straightforward act, process, of instances of transforming or being transformed. Modern theorists on the other hand have spent decades conceptualizing the complex and unpredictable process involved in the transformation process. To them, change management relates to the composition outward form, and they further suggest that for a successful large-scale transformation, there is need for integration and change in structure of the process and pattern. In a fact report National Library of Australia (1981) states that it can therefore be concluded that transformation is supposed to identify, leverage, and create new underlying principles for the way things are handled in an aim to leverage new sources of power Cebrowski,(2003).

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Introduction

In the 21st century workforce, dynamism and need for change because of the continuous change in the global and technological environment is inevitable. There is a significant need to meet both the managerial and performance challenges of the 21st century, as the transformational change slogan goes, “those who don’t lead change are history”. This case applies to an organization which is reluctant to change as the market needs change; such organizations are normally rendered obsolete by the increased competition and market change that is ever shifting independently without any organizations ability to control it Bass (2003).

As one of the organizations that I am familiar with, I considered Telstra’s business operations and the area that I feel the company has changed in order to maintain its market edge in the Australian telecommunication market. This company is the National leader in provision of its telecommunication services to the Australian market; it has also been overwhelmingly known to promote sponsorship events as part of its branding initiatives. In their studies Bass & Avolio (2003) state that sponsorship spans from world sporting events to establishment of hot spots around the city in conjunction with game manufacturers such as Nintendo in recent years. The company has a well established strategic security plan managed by professional and graduates of finance and economics from the world leading Universities.

Environment

In Telstra, there are several factors that were recommended by stakeholders in the pursuit of transformation in their continuing quest to maintain their market niche, they include; cultural, leadership, technology, attitude and market barriers.

Cultural changes were required since culture refers to the norms and values shared by a group of people in a particular setting. According to Thorne (2006) changing cultural orientation to match the needs of each specific subscriber and Telstra shop that the company is running its business assisted in maintaining the loyalty of the consumers. The company needed to adjust its cultural views in order to fit into every unique culture in a way that will promote the cultural values which will then lead to their market increase.

In his book Gordon (2007), concludes that the management of Telstra emphasized that organizational culture can be understood in terms of organizational types because different organizations have different values and norms they value as an organization. A culture is something deeply rooted and embedded in an organization. It can be said that the culture of an organization is the organizational character. It embodies the company’s vision and ethics that are integrated into its strategic plan, an organizations culture makes up the organization. Since culture makes up the organization, it is this element that varies with organizations. It is therefore this element that distinguishes organizations achievements.

In his studies Waddell (2004) states that there are some consequences and implications of organizational culture, and they include; Power levels-This means that the society expects different power levels in the society; this means that there are individuals who are expected to have more power than others.

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Individualism vs. collectivism-This refers to the extent to which a society dictates the level of which the society is expected to stand up as individuals and collectively.

Gender issues-This is normally reflected in our daily lives and the entire society regarding to the level of expectations with regard to gender.

Ethics-Organizations culture varies with regard to the society referred. Every society and organization has varying level of ethic integration.

Leadership is another aspect that constantly needs change, in the 21st century, there are several leadership themes that have since faced extinction and rendered obsolete by the innovative leadership that has evolved. As an example, bureaucratic leadership style proposed by Weber in early 19th century is still evident in many organizations; such organizations are less adoptive to change. In Telstra, leaders underwent training in order to meet the needs and the dynamism of the 21st century market that has more than ever gone global and overwhelmingly increased its competitive edge.

The company also plans to commit to more changes by recent changes in the management, the company decided to hire Gordon Ballantyne who is the executive of the famous Hewlett Packard Company who will take his position as the managing director of the Telstra Corporation’s consumers and channels department thus managing all the retail sales outlets with an ambition of winning more consumers and retaining the existing ones,

The gateway to the world of business has been made and controlled by increasing technological advancement that has seen many company’s thrown out of the market and new ones came in. In his studies Storey (1997) summarizes that Telstra needs to adjust its technological needs that will keep them at par with the changing market needs and demands. The company has undertaken many technological reforms in order for it to remain at the front of the pack. Such reforms have included offering several internet packages to subscribers such as Telstra internet direct among other packages like Telstra Big pond. Processes in the company have also been aided by usage of the internet and promotion of the same to be spearheaded by the company as it is the clear future of mass marketing in the world.

Participants of changes

In a successful revolution or transformation, all the spheres of the system should be involved. As Bass (2003) puts it, a journey to the new land is not always soft but depends on the leadership skills of the principal responsible for leading the entire system into new land. Failure to tactfully involve every aspect of the system will always result in slow and unsuccessful journey. Considering Telstra, leadership of the company needed an elaborate training on tactics to use in the process of transformation. This is because in the business world, there is always a continued need for change as the market dynamically changes every single day since new competitors came onto the market.

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Competitors

As the market grows, there is unforeseeable increase in the number of competitors in the market. As for the case of Telstra, its major competitor in the area of telecommunication is Optus. The advantage that the company has with regard to its competitors is the fact that it was the first to enter the Australian market which meant that they had a head start and increased its market share compared to its rivals who started operations much later after Telstra had seized the market. Unlike these companies, Telstra is all over the Australia and still maintains a stiff competition from its rivals because of its variety and quality of the company’s services.

In order for the company to remain competitive the way it has done over the years, it has ensured that there is continuation in customer loyalty in the different services and areas that they have already ventured. This is crucial as the local residents will feel the sense of belonging and not foreign as normally attributed to such company’s Barger (2004).

Sales and marketing strategy recommended

Regarding Telstra, there were several proposals concerning the sales and marketing strategy that proved important to the company. There is need for the company to think even bigger and audit its time with the correct mind set of individuals involved. The company found out that it also needs to be different and stand out from competition by involving in unique activities that will surprise their customers and therefore attract them in the process. Building relationship with your customer by keeping their database and contacting them regularly is important for their loyalty to remain intact and therefore preventing any possible threats from competition. Sending them regular mails under their permission is also a way to ensure their continual loyalty Durant (2004).

Promoting Diversity strategy changes recommended

In any country or region there is always a unique history that is related to the culture and the way people co-habit together in that setting. Telstra has promoted diversity strategy in the contemporary of any business and has realized that it is important to its performance in the diverse and intense market of that country. Many people may not see the need to promote and uphold diverse believes in several locations where the business is located. Such steps are the genesis of the company’s failures which more than often create a negative image from the customers’ perspective Barger (2004). I was recommended that Telstra foster its strategies of promoting diversity and creating a conducive business environment in all the regions that it business is covering.

In any change management program there is a need for positive mind, dynamism which is all inclusive in the process of revolution and also the need to redesign and restructure the company’s system regular. This will create a working condition that not only meets the requirements of the 21st century but also keep at par the ever changing global and technological advancements.

Strategy

SWOT Analysis

Intense competition remains the major challenge for the company as the mature industry has a number of services providers and suppliers. To counter the challenges, the company has developed an ambitious program and expansion plan that will see it spread to new areas, develop new services and reengineer the business processes. In his book Cameron (2007) argues that the success of this program lies in the exciting opportunities in the market as the demand for restaurants that can accommodate different groups of clients’ needs increases. Consequently, Telstra plans “open numerous owned shops across the country in new and existing markets” Telstra (2008).

Although individual approaches can be identified in Telstra’s strategy creation processes, a rather integrative approach, combining several approaches has been Telstra’s key success secrets as it has managed to constantly transform it by subscribing to ideal strategic and timely changes. In his book Fletcher (2009), the Company has made efforts to acquire and merge with competitors such as Norstar media and Autohome in other countries in its bid to remain competitive in the global telecommunication market, collaborate and partner with other firms through sale of brand name.

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This boosted its competition with Optus which has gained a considerable market base based on its similar product line. Furthermore this integrative and constantly changing approach can be viewed in Telstra’s ability to offer a wide range of services a reflection of its technologically sound and alert team of innovators. Continuous intensive research is undertaken by the Research and development department as well as through third party contracting thus ensuring that the services offered are generally of high quality and utility.

Strengths and Opportunities in Human Resource Practices

In his discussions McConnell (2003) concludes that the elements of the entrepreneurial school are also observable on Telstra’s organizational strategy. A considerable proportion of the company’s control has also been governed by the solid executive control with focus being given to chief managers led by the company’s top executives. There has been the rewarding of well performing management team with the managers who are underperforming being demoted or reshuffled hence a general focus on management. The organization has also adopted the clan control mechanism. Although Telstra’s employees have many things in common the company has continuously emphasized on visionary leadership.

They share many values, expectations and goals hence tend to work in harmony with one another; a harmony created by the aspect of strong visionary leadership. This has been displayed in the less formal approach in which the Telstra’s team approaches issues. In his research The integrated approach used by Telstra has ensured greater cost savings, increased efficiency, better product quality, enhanced customer service and a happier cohesive workforce who work in harmony to produce positive results; hence although its strategy is based on the cognitive school, the entrepreneurial school is certainly considerably evident on its strategy formulation process.

At the Telstra’s employee satisfaction is an integral part of Human Resource Management practice as it directly relates to the satisfaction of customers especially in the rapidly expanding and increasingly more competitive industry.

Nevertheless, this growth in the business comes with newer challenges especially in relation to ability of the current business entities to attract more clients and retain there market shares, hand in hand with shrewd business practices as realized by the Telstra. In his book Fletcher (2004) argues that if this calls for implementation of sound human resource managerial practices that would not only enhance performance but also ensure that the labor turnover is at irreducible minimum, if any, and that job satisfaction is always upheld.

Universally, it is a Human Resource function and requirement of the responsible department to work hand in hand with executives, managers, supervisors, and other employees to maximize their productivity, prepare them for positions of greater authority and responsibility, provide them with maximum job satisfaction, and enhance their promotability Telstra (2008).

To fully realize the benefits of job satisfactions, the human resource practices have been aimed at equating employees to customers in terms of the treatment acceded to them. Such deliberate moves, especially in a market where the labor cost is a major constraint, has had a two fold effect for the Telstra Corporation: one, the employees have become more productive as they strive to meet what is expected of them, and two the employees are more customer-conscious based on the urge to replicate the good treatment received from the management in their routine duties.

In his research Darbishire (2002), the company has had a rather integrated approach in achieving in its strategy formulation process; applying both bureaucratic, market and clan control mechanisms. Telstra has a board of governors and a core management team together with specialized well documented rules and regulations implemented through a formal authority that serve to guide employee performances. This bureaucratic type of approach has been applied mildly and has served to regulate Telstra employee’s behavior thereby leading to better results, limited budgets, better performances as displayed in statistical reports and employee performance records.

The assertion of power school is therefore evident in Telstra’s business concept as the company has managed to properly manage its employees. It has succeed in creating a generally good working environment for all its employees though some critics see this as making them loose a considerable proportion of daily tasks. It has been characterized by offering its employees a large degree of freedom thereby tapping their creativity towards the improvement of both its products and services.

In his studies Waddell (2004) the company has also employed the dynamic elements of internal marketing where the jobs on offer as well as the positions which are already filled are viewed as products. Key features of a product is that it must be of high quality, has competitive pricing, customized for a specific market niche, constantly improved through market research and above all meant to satisfy the specific needs and wants of the customers. By relating jobs to a product on offer is a highly competitive market Telstra Corporation has been ale to make sure that the jobs equated to the service thus enhancing employees’ morale and organizational performance.

It is important however to not that it is the positions and not those who fill them (employees) who should be viewed as products. At the same time there is need for the company to design this product and promote it not as the tenets of the traditional marketing and market mix but through organization specific means and practices. Such practice should consider the organization culture, employee/organization behavior, turnover rates and the industrial practices which are specific to given geographical area in which a branch of the Telstra Corporation is located.

Analysis

In his research Bass (1990) concludes that after the change management was done, Telstra focused its activities around its core competencies which are:

The services offered to customers

  • Telstra Corporation ensures that its services are of high quality through regular checks, and employment of qualified quality assurance persons
  • The services are effectively differentiated and customized to suit different users
  • The services meet not only the safety requirements as stipulated in the public laws and regulations of the countries in which operates but also meet the specific requirements of individual and corporate clients.

People and customers

  • In his studies Barger (2004), The Company, through its strategic marketing and public relations departments ensures that the people, stakeholders of the company, have their different needs met effectively and efficiently.
  • The company has a responsive and proactive sales and marketing department, and person in charge of public and communications, where the employees who deal in personal selling are regularly trained on customer care, business communication and conflict management.
  • The customers’ complaints are also adequately handled on time and measures put in place to avoid a repeat of a mistake and poor handling of customers.
  • According to the company, this business marketing concept not only guarantees flexibility in its marketing management but also allows the clients to closely identify with the company, have a wider variety of services to choose from, including packed meals services and enhances positive image without much expenditure in marketing (McCarthy& Perreault, 2004).
  • As a result, the company has managed to initiate a business friendly environment as well as customization of the “communication experience” and the resultant repeat subscribers occasioned by customer loyalty.

Place and physical evidence

  • Through its strategic vision and expansionist business model, the company has not only expanded in different parts of the Australia but has also systematically and steadily undergone internationalization in a bid to enhance it global reach
  • According to Camron (2007),One of the approaches which the company has used to enhance its expansion and internationalization process, especially in the 1980s is through mergers and acquisition
  • By selling its name and good will, Telstra Company has managed to register a sizeable international presence.
  • The money raised from mergers and acquisition from other companies has equally contributed to the fortunes of the company as the proceeds are invested into more productive processes and market research.

Pricing

  • One approach which the company uses is competitive pricing.
  • The company has a wide variety of services which it charges in line with the market demand as well as the prevailing industry figures.
  • Further, the company’s marketing tools are designed to ensure that the service prices are competitive and optimized to “local market conditions” (Telstra, 2009).

Process

  • The development of new services such as ADSL and others has therefore enhanced the service delivery process and penetration into newer market segments. According to the company, it has been crucial that it extended it offerings so as to match the rapid growth of the industry
  • According to the company, it has a ‘unique service model’ , ordering and delivery system
  • These business process are flexible and can be made at the ‘counter or table’ to the advantage and convenience of the client.Telstra (2009).

Promotion

  • The products and services offered are nationally and internationally marketed and advertised under a recognizable brand name, i.e. Telstra
  • The Telstra Company has aggressive promotion and customized business model that is characterized by regular product development and improvement, innovation and strategic business development concept.
  • This unique business model coupled with dynamic and stewardship management, target marketing, excellent customer care and high product performance have placed it at a competitive advantage position relative to the smaller and bigger competitors.
  • The Company’s business marketing model is characterized by offering of a variety of products and services; the promotion is also done through advertisements in print and electronic media, personal selling, use of brochures and posters, bill boards and website.
  • The company’s employees are a very hospitable, skilled and experienced, a condition which emphases the need for customer satisfaction, efficiency in service delivery, involvement and cost minimization

Summary

Ability to effectively manage the challenges which come with globalization as witnessed by the company’s rapid internationalization can also be cited as the major points of corporate strengths and opportunities for the company. Though such aggressive expansions come with such weakness as increased competition, reduced level of control and threats like cultural diversity, differing eating habits and barriers to entry, Telstra has effectively managed these issues. According to National Library of Australia (1981).In considering, expansion, the company factors in both endogenous and exiguous factors in the strategic decisions.

The major external factors considered are risks associated with the foreign market. To fully identify the opportunities in a foreign market, it has been a tradition of the Telstra to ensure that its services are acceptable and appeal to the local markets apart from building close relationship and trust with the local consumers as the case in India where there is a non vegetarian menu comprising of fish and chicken only as beef is religiously taken to be sacred. Bateman & Scott (2004).

The capability to manage diversity more so in relation to multiculturalism and different social habits forms strength of the Telstra. As such, the company has its employees travel to different countries and continents corporate belief among the management that diversity is a cultural, ethical, moral and business issue (Telstra’s Corporation, 2008). The numerous awards won by Telstra also illustrate its strong bargaining power as well as ability to do business competitively. Among many awards, Telstra in the Australia has gotten such awards as Asian Telco award, APC Internet Technology, Business service innovation award, among others.

Telstra Corporation, (2008). Internally, the sound management has ensured that the Telstra has fully and positively embraced the endogenous factors which may lead to failure of its services. Ensuring that the working environment is conducive, the employees are motivated and trained, employee harassment and discrimination are non existent, and Telstra has effectively managed to manage the internal business environmental factors which are critical for corporate success.

List of References

Barger, D. G. (2004) It is time to transform, not reform, U.S intelligence. [Electronic version]. SAIS Review, 24, No. 1. Web.

Bass, B, M., Avolio J. B. (2003) Transformational leadership and organizational culture. Public Administration Quarterly, spring, 112-121.

Bass, B. (1990) From transitional to transformational leadership: Learning to share the vision, Organizational Dynamics, winter, 1990. pp 140-148.

Cameron, T. (2007) Business management: corporate management, people and change: VCE units 3 & 4. Sydney, Macmillan Education Australia.

Cebrowski, A. (2003). Network centric warfare and transformation.

Darbishire, O. (2002) Converging Divergences: Worldwide Changes in Employment Systems. London, Cornell University Press.

Durant, F. (2004). Networking in the shadow of hierarchy: From forward to backward mapping. Presentation at the NAMSHPD Research Institute’s change management meeting. Alexandria, VA: NASMHPD Research Institute, Inc.

Fletcher, P. (2009) Wired Brown Land: Telstra’s Battle for Broadband. New York, UNSW Press.

Gordon, M. (2007) Contemporary chief information officers: management experiences. New York, Idea Group Inc (IGI).

McConnell, J. (2003) Objectives and Management of the Australian Economy. Perth, Macmillan Education Australia.

National Library of Australia. (1981) APAIS, Australian public affairs information service: a subject index to current literature. Australia, National Library Australia.

Storey, J. (1996) Blackwell cases in human resource and change management. California, Wiley Blackwell.

Telstra Corporation. (2008). worldwide corporate responsibility report: responsible services for a sustainable future. Melbourne, Telstra’s Corporation.

Thorne. H. (2006) Management accounting: information for managing and creating value. New York, McGraw-Hill.

Waddell, D. (2004) E-business innovation and change management. New York, Idea Group Inc (IGI).

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