Management Paper

“Raising the Bar”

Cingular, one of the nation’s largest wireless phone providers recently announced its forty-one billion dollar purchase of AT&T wireless. The deal took place on October 26, 2004. The merge of these two major corporations opened the doors for change.

AT&T encountered some difficulties within the past year that brought up the question to sell the company. AT&T struggled to add new subscribers because of a glitch in their new software system. The system was designed to improve customer service but instead it caused more problems for the company as well as its customers. The company also faced problems losing more customers than they were gaining due to new federal rules and regulations that took place in November of 2003. These rules allowed phone users to change service providers without losing their current phone numbers. Cingular, at the same time was looking to cut costs, fill cellular service gaps and expand their coverage area. Since AT&T faced numerous problems and Cingular was on the lookout to expand, the merge was seen as beneficial to both companies.

The merge brought about many advantages. One of the major advantages for the merge was not only was Cingular now the largest wireless company in the industry having the most coverage area, but it removed one of the major competitors in the wireless industry. This removal would stabilize the industry so that carriers could more easily invest in new services. Another advantage for purchasing a company like AT&T was that both companies ran off of the same network technology making the integration of both companies easy. The merge more than doubled the customer base for Cingular. Going from a mere 23.4 million customers to 46.7 million customers. The management at Cingular would have a lot of work on their hands. To deal with these changes Cingular management will have to lay off employees from both companies. Many positions are a duplicate of what Cingular all ready has. The top management teams from both companies will have to come together and make some huge decisions about who is going to hold what positions and what goals will need to be set for the success of the company. Teamwork and communication are going to be the keywords during this time of change. If each member of the company goes in their own direction the company will continue to fall. Teamwork involves the Cingular customer service representatives training the new AT&T representatives about their system. The existing Cingular employees will need to communicate clearly with the AT&T representatives and ensure that there are no questions remaining. If there is any confusion problems could arise. For example, if the current Cingular representatives do not clearly explain the current wireless plans Cingular offers, then the AT&T representatives might falsely inform the customers. This would lead to irate customers who might choose to take their business elsewhere. The merge will also empower existing Cingular employees. Management will have so much work on their hands that they will not have time to worry about and deal with every single problem that arises with the new employees as well as the customers. In the text Management by Richard Daft, Empowerment means “unleashing the power and creativity of employees by giving them the freedom, resources, information and skills to make decisions, while empowerment expands their behavior”(Daft 56). This will create better customer service. Instead of having to wait on managers to solve problems the employees can solve them, speeding up the problem solving process.

Along with advantages come disadvantages. The consolidation of the two corporations brings an end to the decreased prices that users enjoy as a product of intense competition. It would also lead to major layoffs as well as management changes. John Zeglis the chief executive officer (CEO) of AT&T recently told reporters that he will not remain with the company once it