France Telecom Change Management

France Telecom Change Management

Table of Contents Introduction The today’s time is coined by the change of the seller’s and buyer’s market. A constantly growing offer faces to a nearly stagnant market sphere stamped by strong competition. Products and services become more and more similar to each other and for every enterprise it shows a huge challenge to find a unique selling proposition to be able to contrast with the competition. By the hard competitive pressure an enterprises can get fast under the compulsion to move and must pursue certain changes to exist in the market. These changes can affect the employee too and put hem again under huge stress.

According to a study France stands above all especially in large-scale enterprises with his suicide rate worldwide at the third place. , Especially conspicuously by his suicidal wave was the enterprise France Telecoms which had registered 22 suicides only in 2008 and these rose perpetually. This paper includes a brief introduction to two big changes inside France Telecoms and the consequences for both of them. A clear connection between these changes can be seen between them. In addition, critical assessment of the latter change, Orange People Charter, will be shown within this assignment.

France Telecoms Past & Present France Telecoms was founded in 1988 and has its domicile in Paris. Before 1988 the French telecommunication, “Direction G©n©real des T©l©communications”, was part of the post ministry. In 1990, France telecoms went public. At this time the company was governmentally owned and France Telecoms had a monopoly -position until 1998. Today’s CEO is Stephan Richard. The company employs about 170,000 persons in 2013 and gained a turnover of 43,51 Billion Euro in 2012. It is the leading telecommunication provider in French and attends to 229. 8 Million customers in 32 entries.

Their business activities are offering and service for mobile phones, Internet, mobile Internet, IP televisions and landlines. Since 2012 the company presents itself with the brand Orange due to an image change. Orange was a British company which was acquired by France telecoms in 2000. On first of July 2013, the company changed their brand name from France telecoms-orange into only “Orange”. The reasons therefore are called by the firm as unity and simplification of all business activities of the group. ; Brand logo before 2000 Brand logo after 2000 Brand logo today The crisis – phase one

After the company has been moving towards appropriation since 1998, the critical financial numbers have been decreasing. In 2001/2002 the bottom was reached. In 2001 the company ran into debt of about 8 billion and in 2002 they had a loss of 20 billion Euro. Consequently, the largest number of the total debt of France telecoms was about 70 Billion Euro in 2002. The reasons for this crisis were that they tried to expand by buying other companies or parts of companies to position France telecoms worldwide. For example they invested in the German Mobile and British NET. But there was a lot of trouble with Mobile.

Following they quitted business relation with them in 2002 because of not keeping the conditions. Both companies were t successful and the whole investment was a flop which cost them money. In addition, France Telecoms had to pay a high amount because of amortization. They also blamed the low economic development in this time period for their crisis. The turnaround In 2002 they recruited a new CEO, Thither Breton, who should turn around the crisis. A new general staff and new leading managers should change France telecoms into a competitive and successful company. Thither Breton ‘s goals were to gain 1 billion

Euro Cash Flow within 3 years. A way to make that happen was to reduce over 20,000 jobs. Moreover, they sold assets to reduce debt for example assets from the Italian telecommunication company “Wind”. Also France telecoms wanted to issue new shares to gain money. They also thought about more appropriation. In 2002 the French government still owned 56. 4 % of France telecoms, more than the half of it. In 2004 the French government assigned shares. Now the French government holds 27. 11%. , Shareholder structure of Orange Theory of the change after 2002 Top down approach: The change was instructed by the leading manager and the

CEO. There was no decision power of the staff. The goals were high and unrealistic but well defined. The leading staff was forced by the management to implement the new rules and work habits to make sure that the costs are reduced and profit rose. Unplanned change: If there had been no crisis they would not have changed. Due to high amount of debt they had to carry out a fast and successful change to get black business numbers. Remodeling: With new working structure as the “time to move” program they wanted to save work time. Appropriation: The firm is under private hand and the government has not so much power anymore.

Cost reducing: The firm reduces costs by cutting Jobs and putting more workload on one person. They also put people under pressure until they quitted Fast change: The CEO wanted to gain 15 billion Euros within three years. Therefore the change had to happen very fast and the employees could not be prepared for the changes. Results After the harsh turnaround caused by the pressure through the government, some results happened not to the goodwill of the employees. To save costs Telecoms France spearheaded a radical diet to lead the company out of the crisis and the massive debts about over 70 billion Euro.

The company abolished more than 20 000 Jobs. , Consequently the working atmosphere was influenced by the new change. The management started to bully their employees with different bullying methods and pushed them under pressure. With a new program the so called “time to move” 7000 employees were relocated among them was also the technician Nicolas Greenville. He was relocated in a minimum of time from his position to the customer service without any further education. For someone without any education in dealing with customers it can become a stressful situation as well as it became for Nicolas

Greenville. For months he begged to get an education or training that he can handle these stress situations vainly. After he should get a training it was too late he killed himself a few days later. Beyond it, the manager of France Telecoms has raised apparently in May 2009 the work rhythm in the department of the technician by 30 percent. Although the company management has known about the risk for the suicidal employee, she has taken no precautions to prevent the suicide. Like to Nicholas Greenville exactly the same thing happened to many other employees of the phone group France Telecoms.

In spite of enormously remarkable continuously rising suicide waves in the company, France Telecoms denied all accusations. Although some farewell letters appeared with accusation against the company like in this example: “The only reason is the work”, wrote a 51 -year-old engineer of France Telecoms Marseille in his farewell letter: “The permanent pressure, the strain, the missing continuing education, the disorientation and the management with the terror. ” Additionally to the already present stress through the relocations came also as well the bad working atmosphere.

Through bad blood the employees were incited on ACH other. Competition about rises in salary started. There was no sign of teamwork or solidarity. Cruel working conditions compound the situation more drastic. The employees were pushed insomuch under pressure and feared through strict timeliness, plus they used methods in their call-centers which spoil the employees’ enjoyment of work through: Ban of private decoration at the workstation Recording all customer talks Public lists of the individual achievement values Minute-exact definition of the pee brakes.

As a result of strict surveillance and rules at the working place many employees slides their Jobs. Moreover, France Telecoms tried to hound some employees out of the company. Clerks had to do inferior work with the ulterior motive that they will resign by themselves. A great amount of employees wanted to leave the company voluntarily, and they knew, that bullying would continue if they would stay. Wave of self-destructions Stressing and pressuring atmosphere at France Telecoms offices, which was caused by previously mentioned reasons, led employees to make various different decisions concerning ten working place .

I nose echelons Includes transfers Detente apartments, voluntary resigns and burnouts of employees. Some decisions however, raised huge amount of publicity in France and all across the world – suicides amongst France Telecoms employees. Between years 2008 and 2009 over 35 employees of France Telecoms took their own lives. Many of them also left a note behind, blaming the inhumane working conditions to be the main reason for their actions.

As an example, 57-year old man who had been working at France Telecoms for over 30 years, who committed suicide at the parking place of the company by setting himself on fire. During the worst days of the employee-crisis, five employees committed suicide within ten days. Investigation in 2012 revealed that France Telecoms was to be blamed in 80 cases of suicides, suicide attempts or mental breakdowns. As a side note, general rate for suicides in France is 14. 6 per every 100. 000 inhabitants (Male 22. 8, female 7. 5 / 100. 000).

In addition, France is number 9 on the list of suicide rates in COED-countries. Therefore the actual rate isn’t far above the average, but the reason for huge publicity is the notes that were left behind by employees. Conclusion on phase one In our opinion the first change after the crisis in 2002 was unplanned and not well communicated to the employees. In a very short time period the management wanted to turnaround the crisis and get back into competitive business. Therefore they implemented new changes with the only focus on cost saving and profit gaining.

They did not pay attention to the needs of their staff and did not think about the feasibility and possible consequences. Even when the consulting firm “Technological” was worried about the work climate and advised France Telecoms of the psycho-social danger of the change methods. But the managers did not pay attention to their report and continued their strategy, even there has been more suicides. Pressure and control at the workplace, higher work load as well as uncertainty about further changes or Job cuttings are not the right methods to implement change and getting a company more profitable.

We think that this whole change was a disaster which was even paid by human lives. Solution for crisis and it’s evaluation Now that we know the background and short history, let’s take a look at the direct actions that the company took to shake down the bad image and to provide its employees safer and more pleasurable working environment. The change program is called Orange People Charter, or Social Contract, and it simply aims to strengthen the relationship between employees and the company itself.

To summarize the Social Contract briefly, we will introduce the 6 promises from the France Telecoms to its current and future employees: Be an ethical and socially responsible employer Offer career and development opportunities Provide a work environment for outstanding customer satisfaction Empower managers and hold them accountable for progress and success Provide a positive laity of life at work Recognize and reward our people for individual and collective contributions to our success Social Contract was launched in France in 2010 and year after in other France Telecoms countries.

Whole project lasts in every country 5 years; therefore it requires long time commitment from the employer. From the Force Field Analysis we can see that the main drivers for the change -project, were the political- and social pressure, wanly were caused Day ten Nell putridly AT tens sensitive topic . Forces towards the change should be clear for us by now, so let’s focus more on the opposing forces. Here we have to remember that France Telecoms is a company with over 100. 00 employees inside France and everyone was to be involved to the project. It’s obvious that creating a change-project for the whole personnel would take considerable amount of time and money to organize. To solve some of the organizing issues, the company decided to focus the training on low- and middle-level managers, who are directly in daily contact with the basic workers. These managers were trained to act according to the new guidelines and focusing on atmosphere at the working place.

Perhaps the biggest force against the change was the existing many culture, that tried to whip out all the existing resources out from the employees and to gain as huge profits as possible – without caring too much of the wellbeing of the employees. Competition between employees was also fierce, caused by the result-based rewarding-system for the first-line employees and their managers. Self-made diagram What has been done and how they succeeded? As mentioned earlier, the Social Contract was launched in France in 2010 and in 2011 in other France Telecoms countries.

According to the France Telecoms, proxy. 10. 000 managers have been trained to follow new Social Contract-guidelines at the end of 011. What comes to the implementation of change and the training of managers, France Telecoms set up “Orange Campuses”, which are training and education facilities for the personnel. These campuses were established to enhance Social Contract and campuses are located in three key locations; Paris, Madrid and Crock in Poland. Orange Campus offers almost 60 different training programs, each lasting from 1 day up to over a year.

In general the programs are divided into three different categories: Dedicated management pathways: the basics of management, to prepare management to take on new responsibilities Collective development programs: add-to-measure programs to help executives mobiles and develop their teams Individual development modules to improve management practices and skills During the first year of Orange Campus, the most attractive programs for the managers were: How to communicate effectively How to develop your people Motivate and engage your people In addition managers variable bonus -system has been changed from result-based – system into “atmosphere-system”, which is measured by the Social Barometer once in every 6 months. This minor change also aims to release the tightening pressure from managers and therefore from low level employees too.

This very same Social Barometer isn’t unfortunately open for public, but Corporate Social Responsibility -reports from recent years shows us a small glimpse to these result use TTS Inhalant clearly Tanat development towards netter NAS occurred example, in 2010 only 28% of the staff believed that quality of the working environment is better in France Telecoms, comparing to other companies. This same question was presented in 2012 and the number had risen to 54%. Also 81% of the employees were happy to be part of the company in 2012, whereas in 2009 the same statistic was 39%. However, in 2004 before the big changes inside company, up to 5% of the employees were proud to be part of France Telecoms. One indication that the change-project was successful is also the “Top Employer 2012” award, which was given to the France Telecoms in 2012 in multiple different countries; France, Poland and Spain.