History of Etisalat and Its Challenges - Case Study Example

Running Head: RESEARCH PROJECT Research Project – Company Analysis Name: Institution Course: Lecturer: Date: Introduction The analysis of the organizational structure of any company not only give a better comprehension of the various pros and cons within the company, but also gives the heads of the organization a better chance to improve their present state and make a healthy organization for their employees as well as their customers. This report analyses Emirates Telecommunications Corporation commonly known as Etisalat; which is one of the two major telecom providers in UAE. The report will discuss some of the strengths as well as weaknesses of Etisalat and diagnose the issues within the organizational structure. Post diagnosis analysis will be made and the report will provide some remedial plans of safeguarding the company. History of Etisalat Etisalat is a multinational corporation working in seventeen countries across Asia. In 2014, Etisalat was ranked number 13 amongst world’s largest network providers. In 2012, Forbes named it the most powerful company in the UAE. In the middle-east, Etisalat acts as the main internet hub and provides telecommunication services to other operators as well. The company has various roaming agreements with the largest telecom providers in the world such as Blackberry, 3G etc. It has a point of presence operations in states such as New York, Amsterdam, London, Singapore and Paris etc. In 2011 Etisalat launched 4G LTE network (Drack & Schwarz, 2010). A joint-stock company formed in 1976, Etisalat was a joint venture between a British company called International Aeradio Limited and the local partners. In 1983, the UAE government took the company’s 60% share value making it a government owned organizations whilst 40% of the overall share capital was made public. In 1991, the central government of UAE passed a federal law that gave the organization the rights to provide telecommunication services across the UAE, and between UAE and other countries. Etisalat network's growth and development has increased since then. In January 2001, Etisalat's commencement of international operations under the brand name of Ufone was one of the important milestones. The Company’s Strategy Etisalat possesses right to issue licenses for owning, importing, using, and manufacturing telecom equipments. Within a span of two decades, the increase in the exchange lines was multiple folds. Today, in terms of market capitalization, the company is ranked 140 out of 500 companies globally. Moreover, the company is ranked sixth largest in Middle East in terms of revenues and capitalization. Headquartered in Abu Dhabi, the company has three regional offices in Abu Dhabi, Dubai and North Emirates. This is the first of the companies that have made the capital of its working, full of FTTP roll outs (Kolachi & Akan, 2014). The other services that Etisalat provides includes 3G, 4G and Broadband internet services along with prepaid and postpaid dial up internet connections. It has also provided Wi-Fi hotspots in central locations such as malls and Shisha cafes in the city (Kopelman, Prottas & Davis, 2008). Other than direct telecommunication services, Etisalat also provides non-telecommunication facilities such as training and consultancy services, SIM/Smart card manufacturing and payment solutions and data clearing house services. In 2006, Etisalat started a restructuring program which made it shift from a technology driven enterprise to a customer- focused service provider as many of its core businesses de-merged and core services were consolidated. This project strives to detect the fouls within the organizational structure of Etisalat and how it would affect the profitability of the organization. The analysis of the weaknesses and the strengths of the company would help us understand what can go wrong in the general work force. Since the investment of Etisalat is not direct, they don’t have direct control over it. Therefore, they get dividends which make them a passive player in the market. This limits Etisalat's growth in terms of commercialization (Drack & Schwarz, 2010). Etisalat operates in a monopoly system particularly in terms of competition which makes it less customer orientated; for instance, in the area of pricing. Being largely government owned, the UAE telecom market is highly restricted. The choice of provider is generally restricted to geographic location. The monopoly nature of Etisalat in certain areas makes broadband internet provision in the UAE one of the slowest and most expensive in the world (Hashim, 2013). This is contrary to the UAE government’s wish. Thus, the project will explore what can make Etisalat’s trading more customers friendly and desirable (Drucker, 1998). Organizational Structure The following picture gives a view of the company’s organizational structure. This will help us understand the problems within the company better. Figure 1-Organisational Structure The approach that the company uses on its employees is generally top down approach. The opinions of the employees are varied in terms of what is actually the problem in the normal operations of the company. Many employees believe that the organization is very hierarchical in nature and that the influence of the authorities is definitely more as it is a government based organization (Hashim, 2013). Etisalat is a very huge organization and each department has its own set of directors and bosses who take care of the major operations of the firm. Each department has sub-divisions and there is a substantial number of tasks done. The large size of this type of organization can sometimes be detrimental as the decision-making process turns slow. The unit that has not been given as much consideration and which should be prioritized is the HR department (Kopelman, Prottas & Davis, 2008). Many employees feel that the HR department is not able to perform its duties and maintain a healthy work-life balance in the company. In addition, the company has been restructured in a way that a sizable number of jobs are being outsourced. As a result, the job security is at its minimal level. Some sources also feel that expatriates are not valued much and promotions are awarded only to locals. This precept leads to low customer satisfaction (Drack & Schwarz, 2010). Diagnosis of the Problems The problems that the diagnostic team focused on entailed issues revolving the HR department. This includes: 1. Hierarchical problems of the employees. 2. Work-life balance issues. The team also tried to understand the execution of values that make employees solidarity high towards the customers. The plan was to conduct an interview with approximately six employees in the lower chains of every department, and around twenty employees from the HR department (Russ, 2011). The questions were formed by the group and revisited by each other at multiple occasions. Then the experts were asked to review the questions in order to confirm the communicative validity of the questions. Interview Questions Q: Since when have you been working in the organization? A: For a period of nine years. Q. Are you satisfied with the services and the amount of freedom you get in the organization? A. The services have been partially satisfying. Talking about the freedom, I don’t remember the last time I enjoyed the freedom within the auspices of the company. Q. What are your opinions about the HR department and its efficacy? A. The HR department has been so rigid overtime. The principles that operated a decade ago are still present today. The department has been engrossed in malpractices such as extension of favors and disrespect. Q. Do you think that there are areas where the company is doing well? If yes, then where? A. Yes, I think there is. Personally, I possess a mobile gadget whereas the main service provider is Etisalat. I must commend the Information Technology department. It is doing a great job. Q. Do you feel there are areas where the company can improve? Where? A. Yes. The company should consider both the plight of her employees and the customers (Russ, 2011). The HR department should ensure that employees’ rights are respected. Moreover, employees should be rewarded in accordance with merits. In regard to customers, the customer care department should respond to the customers’ needs promptly. Q. Would you call Etisalat a customer oriented company? A. No, I would not call it so. Q. What are some of the measures you would give in order to make it a customer oriented company? A. First of all the company should be focused on her goals. Secondly, it should hire the right cadre of staff. Thirdly, Etisalat should ensure that everyone is involved in the affairs of the firm. Moreover, employees should be trusted and respected. The firm should also instill an open line of communication (Russ, 2011). Q. Do feel that you have the freedom to suggest changes in the policies of the company? A. No, not at the moment. Q. Do you find your bosses to be accommodative of your opinion? A. They resent the even the slightest idea. Q. Do you feel your job is secure? A. That is the worst fear that I have. I cannot make it out what will happen to my career tomorrow. Areas of Improvement The interviews were conducted over a span of three weeks by five team members. It was a rigorous exercise and the employees were promised anonymity in regard to disclosure. The interviewers were prepared to do interviews with pilot interviews and probe questions. The answers obtained did not differ much. Majority of the employees believed that there was no balance between work-life and personal-life. However, in times of implementing the report, the opinions of higher leveled officials superseded that of the junior leveled employees (Drack & Schwarz, 2010). Some of the junior and middle-leveled employees believed that the HR department tried its level best in its operation. Nonetheless, the issue regarding freedom of employees ought to be improved in the following ways: 1. A sizeable number of staff believed that freedom and flexibility while approaching a problem is the key. Many believed that organizing events in which all people participate regardless of the position will break the hierarchies and rigidity. The employees are generally satisfied with their jobs, but they aspire to have new and more challenging roles. 2. The staff asserted that the new policies that are introduced into the company are forced on them and that they don’t feel they can do much about the issue. In terms of security of jobs, with more and more outsourcing happening, the staff feels insecure in their jobs. Organizational Development Interventions 1. Area for improvement The staff asserted that the new policies that are introduced into the company are forced on them and that they don’t feel they can do much about it. In terms of security of jobs; with more and more outsourcing happening, the staff feels insecure in their jobs. Proposed OD Intervention Rewards and Recognition: motivated workforce turns out to be a key factor in determining organizational success. The motivated staff becomes industrious in their core activities and thus boosting the productivity within the firm. The organization in turn runs more efficiently and becomes more effective at attaining her goals. In contrasts a demotivated workforce normally disrupts the overall operations of the firm as well as their colleagues (Kolachi & Akan, 2014). In this regard, it is vital for managers to comprehend the power surrounding reward systems plus how the systems are employed to influence the behaviors of employees. Theoretical Basis with Justification While incorporating reward and recognition systems into the operation of the firm, the two should be undertaken separately. The staff reward system entails major programs jumpstarted by the firm to reward performance as well as motivate the staff at both the individual or group levels. The two are considered to be separate from salary. However, this could be in monetary nature and if otherwise could still cost the company. The system had widely been used by large organization but in recent times, mid-sized and small organizations have been using them to lure experienced employees into a competitive job market and to boost employees’ performance (Russ, 2011). 2. Area for improvement A sizeable number of staff believed that freedom and flexibility while approaching a problem is the key. Many believed that organizing events in which all people participate regardless of the position will break the hierarchies and rigidity. The employees are generally satisfied with their jobs, but they aspire to have new and more challenging roles. Proposed OD Intervention Team Building: the main intervention is this instance is to make the employees interact and merge with one another. The sole purpose of it is to break the bond and hierarchy existing within the organizational structure. Socializing and generating many friends in the job place is one way of increasing productivity in the workplace. This does not only boost the morale of individuals, but also mandates the organization to work better in solving the daily workplace issues. Team building in a firm fosters innovation as well as creativity. The staff develops larger imagination when working in an environment inhabited by those they are comfortable with. This kind of intervention not only brings individuals together, but also acts as a hub in which fresh ideas are generated (Kolachi & Akan, 2014). Theoretical Basis with Justification The intervention to motivate brings employees together by encouraging mutual collaboration as well as teamwork. The fun activities that are undertaken help the staff perceive others in different light mandating them connect in different settings. The employees in a team are required to ponder about the major implications of these kinds of interventions within the workplace. One of the powerful reasons why organizations encourage team building is to generate results. Through a number of team bonding events which create fun and motivation, the teams build great skills such as communication, planning, conflict resolution as well as problem-solving techniques. The bonding ideas generated assist the firm is facilitating long-term team building activities through promotion of genuine connections, processing as well as deeper discussions. Recommendations A well working culture of a firm calls for a motivated workforce. The employees should perceive that the firm fully appreciates their efforts. In the case of Etisalat, this is contrary. The workforce (especially the junior employees) feels unappreciated by the management. To worsen the situation, fear has cropped up amongst the employees who feel threatened by those who are in authority. This tends to be detrimental in regard to provision of services to consumers. A consumer oriented company required a well motivated workforce with the ability and space to make informed decisions. Moreover, there should be an open line of communication where information is disseminated right from the junior up-to the persons at the senior level position. If this prevails, the rigidity of hierarchy of power will be broken and the opinions of all cadres of employees will be taken into consideration. Etisalat has been operating in a monopoly market. Being a telecommunication company, the company has faced competition only from her rival DU telecommunication firm. However, the heightened pressure facing the United Arabs Emirates in regard to the need of more players in the market will wage competition into the market in the near future. Therefore, Etisalat needs to be more equipped (McIntyre, 2016). The HR department requires total realignment of its structure. Moreover, more operational powers and control will be required in this department to enable it execute its mandate. The department contains crucial role as it handle the most expensive resource of the organization; that is, the employees. The issues of concerns that are handled by this department have an influence on the wellbeing of all the stakeholders. The HR manager should ensure that none of the employee at Etisalat is discriminated. Moreover, the department should conduct a thorough analysis to ascertain whether outsourcing of jobs in beneficial to the company (Wren & Bedeian, 1994). The HR department requires more power and control over a lot of issues. Human Resources is one of the departments, whose strengthening helps in evaluating the amount of importance an organization gives to its employees. There are many services that is provided by HR department which affects the well being of the people. There needs to be less discrimination against Expatriates or Outsourced workforce. At the same time the company needs to build a trust in the employees that outsourcing would not affect their jobs (Drucker, 1998). Conclusion One of the most expensive resources that operate in any organization is the workforce. The workforce forms part of the company. If the employees are treated in unfair manner, the aftermath trickles down to other stakeholders of the company. In this regard, it is prudent to conduct an organizational analysis which pinpoints the main problems facing the firm and particularly her human resources. After ascertaining the core challenges, a concrete solution is sought to deal with it. The major challenges that have been facing Etisalat company since its formation revolves around her human resources. In particular, a lot of concern has been given on the low cadre of employees whose aspirations have not been met. The key issues facing the employees at Etisalat are job insecurity and rigid hierarchy structure. These issues have been obtained after a concrete diagnosis of the problems facing the firm. Moreover, series of interviews were conducted on the employees of the company with a main aim of getting firsthand information on issues affecting them (Russ, 2011). In order to deal with job insecurity and hierarchy issues, the organization requires organizational development (OD) interventions. These are techniques that the firm will use to turnaround the prevailing situation and have an all-inclusive and motivated workforce. The two major OD interventions include team building and reward and recognition. The interventions will not only shed fears that junior level employees have, but it will also motivate them to interact freely with the members of management. This is will greatly improve the areas of concern (Wren & Bedeian, 1994). References Drack, M., & Schwarz, G. (2010). Recent developments in general system theory. Systems Research and Behavioral Science, 27(6), 601-610. Drucker, P. F. (1998). Management’s new paradigms. Forbes Magazine, 10, 98. Hashim, M. (2013). Change management. International Journal of Academic Research in Business and Social Sciences, 3(7), 685. Kolachi, N., & Akan, O. (2014). HRD Role in Organizational Development (A Case of Corporate Thinking at ETISALAT, UAE). International Business Research, 7(8), 160. Kopelman, R. E., Prottas, D. J., & Davis, A. L. (2008). Douglas McGregor's Theory X and Y: Toward a construct-valid measure. Journal of Managerial Issues, 255-271. McIntyre, P. (2016). General Systems Theory and Creativity. In The Creative System in Action (pp. 13-26). Palgrave Macmillan UK. Russ, T. L. (2011). Theory X/Y assumptions as predictors of managers' propensity for participative decision making. Management Decision, 49(5), 823-836. Wren, D. A., & Bedeian, A. G. (1994). The evolution of management thought. Read More