Reorganizing AT&T: From Vertically Integrated to Customer-Centric Organization (B)
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Case Code: BSTR078 Case Length: 15 Pages Period: 1876 - 2003 Pub Date: 2003 Teaching Note: Not Available |
Price: Rs.400 Organization: AT&T, Department of Justice (US) Industry: Telecom, Countries : USA Themes: Corporate Restructuring |
Abstract Case Intro 1 Case Intro 2 Excerpts
The Break-Up
According to the break-up plan, the erstwhile AT&T would split into three separate publicly traded companies - a $49 bn-a-year communication services company that would continue to call itself AT&T (new AT&T); a $20 bn-a-year company, Lucent Technologies, which would offer communications systems and technology, and a $8 bn computer company, NCR, that would offer computer systems and services (Refer Exhibit II).
Allen commented on the spin off: "We found ourselves always concerned about coordination and were even reluctant to act sometimes for the fear we would hurt the other parts of AT&T. The three units won't need to be so considerate of one another anymore. Each company will have its own board and its own stock; AT&T shareholders received shares in all three." The new AT&T aimed at providing the world's best 'anytime, anywhere' communications and information services. The new AT&T consisted of AT&T's Communications Services Group, the AT&T Universal Card Services (UCS) Corporation, the newly established AT&T Solutions consulting and systems-integration organization, and AT&T Wireless Services, formerly McCaw Cellular Communications.
Lucent took over the business of designing, developing and manufacturing of telecommunications systems, software and products.
It was the global market leader in the sale of public telecommunications network systems, business communications systems and microelectronics components for communication applications.
It was also the largest supplier in the US of telecommunications products for consumers.
Lucent supported network operators and businesses with engineering, installation, maintenance and operating support services. Its R&D activities were conducted through Bell Labs. Lucent's wide range of communications products included corded, cordless and cellular telephones, telephone answering systems and related accessories...
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