GM591 Leadership and Organizational Behavior
Professor Barbara Ward
June 18, 2011
Verizon Communications Inc. is a global broadband and telecommunications company based in New York. Verizon originated in 1983 as Bell Atlantic, operating from New Jersey to Virginia and NYNEX, covering New York to Maine as a result of the AT&T breakup into seven “baby bells” in 1984 (Hoovers, 2011). The name was changed to Verizon in June 2000 because of the merger of GTE and Bell Atlantic (Hoovers, 2011). Verizon is the number two telecom service provider in the United States with 2010 annual sales of over $106 billion and has 194,400 employees (Hoovers, 2011). Verizon is a publicly held company; a component of the Dow Jones Industrial Average, and currently ranks 16th on the Fortune 500 list (Hoovers, 2011). According to Hoovers (2011), “Verizon Communications' wireline unit provides local telephone, long-distance, Internet access, and digital TV services to residential, corporate, and wholesale customers.” I work in the Dallas call center selling residential telephone, internet and television services to customers in California, Florida, and Texas for the wireline division of Verizon Communications. I also serve in the capacity of customer service and billing. I receive inbound calls from existing and prospective customers and assist with their inquiries while reviewing their household communication services to ensure that they are receiving the maximum value from Verizon. I have worked for Verizon since May 2009 in a part-time capacity. Due to the emergence of cellular phones and enhanced competition by cable providers, Verizon wireline has faced the continuing loss of residential subscribers (Hoovers, 2011). Verizon has invested $18B in rolling out its new fiber-to-the-premises in hopes of providing increased competition to cable providers (Hoovers, 2011). In 2010, Verizon sold over four million wireline phone and broadband internet subscribers in 14 states to Frontier Communications (Hoovers, 2011). According to Hoovers (2011), Verizon’s net profit has dropped from 12.9% in 2008 to only 2.4% in 2010. Verizon has decreased their work force by 29,500 or 13.2% during that two-year period (Hoovers 2011). The Verizon call center is managed using high levels of coercive power. Calls are strictly monitored to ensure that employees are following proper protocols. While some of this is due to strict regulations by the Federal Communications Commission (FCC), the requirement that employees offer on every call is about producing bottom line results. Even if a customer calls and is angry about their bill being too high, or needing their services repaired, some type of sales attempt must be made. As of February, every member of my team was on some form of discipline. This was a fact my coach, Mark Price, bragged about, and even stated that improved numbers must be because of the discipline. In speaking with senior team members it was determined that this is the case with almost the entire call center being on some form of disciplinary action. Problem statement
The problem in the Dallas call center is low employee morale. While there have been voluntary cutbacks over the last two years, there have been no forced separations. The company has excellent pay at $19.02 per hour plus commission of $15,000 per annum if targets are achieved, with the ability to earn more if sales exceed 100%. The company also sponsors numerous contests throughout the year, which include trips, merchandise, or award perqs. Employees redeem award perqs for merchandise or gift cards to local merchants. The company has 100% company paid benefits with the medical plan requiring no deductible and only $15 per doctor visit. In today’s society, these are excellent benefits and would be labeled a “Cadillac plan” by the recent health care act of 2010. Verizon provides...