One Tel Corporation

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One.Tel is a telecommunications company that was launched in May 1995 by Jodee Rich and Brad Keeling. Initially, it was a reseller of Optus network before later on decided to enter the deregulated telecommunications industry. One.Tel believed such deregulation could bring them many advantages. With its major competitors like Telstra and Optus viewed as being bureaucratic, slow pace, and old-fashioned, One.Tel promoted flat adhocracy culture as opposed to bureaucratic. It also used the “dude” mascot, a young cartoon character to create a youth-oriented image as it targeted more to youngsters and average people. Since then, One.Tel grew rapidly as a low cost mobile phone service provider and succeeded to acquire many customers. Unfortunately, One.Tel had to enjoy its golden years for only a short period of time before finally ceased in 2001. This paper provides the discussion of the causes of One.Tel collapse and the solutions that should have been taken by the management in order to survive. The arguments in this paper are based on the theories and concepts of organization theory. And the writer put them in sequent with each argument discussed for the purpose of easy-reading. The collapse of One.Tel was due to many problems covering its organization structure and culture, corporate governance, weak control of the board directors, poor strategic management, and IT system. From One.Tel first establishment, it has been too greedy to formulate good strategies that fitted well for its early days. It was just focusing on acquiring customers as many as possible. According to Barry 2002, it offered cheap call rates and credit to customers without checking customers’ credit capabilities as it was only focused in gaining large customer base more than anything else. While in fact, those customers did not contribute to the profitability of the company. The account receivable of the company increased with only part of it being paid by customers, and as consequences the cost of wages, rent, and so on were even larger than the sales made. This is the proof that One.Tel had already prioritized the wrong thing. However, the great organizational structure and culture have blurred the problems and contributed to the success of One.Tel, at least for few years. But in the end, the structure and culture of the company were accused to be one of the causes of One.Tel collapse as well. As opposed to bureaucracy, it promoted flat, adhocracy structure with so much customer-oriented. Robbins & Barnwell (2006) described adhocracy as a decentralized form which is characterized by high horizontal differentiation, low vertical differentiation, low formalization, intensive coordination, and great flexibility and responsiveness (p.131). The implication of this organizational structure was encouraged so much by the relevant culture. Rich emphasized the close relationship between employees as everyone worked on one floor without any obvious divisions or even hierarchy. The employees were also expected to take a role turn as they would have more opportunities to gain experiences for the contributions back to the company. And Jodee Rich built fun working environment to encourage innovation, creativity, and knowledge sharing between employees. The structure and culture of One.Tel brought many advantages for the company. It had led One.Tel to become a more innovative and creative organization in which those characteristics are the crucial factors leading to the success of the company. Jeroen & Deanne (2007) stated that in innovative work environment, employees can help to improve business performance through their ability to generate ideas and use these as building blocks for new and better products, services and work processes (p.41). Employees were also happy workings in such environment, proved by new workers were appearing everyday and the absenteeism was very low. However, adhocracy has little standardization and decentralized decision-making, in...
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