Reference no: EM133436664

Pluto Telecommunications

Introduction

'Just what is going on in this corporation?' shouted Veronica Tsang, managing director of Pluto Communications. Her question - aimed at no particular individual seated around the boardroom table - was provoked by the presentation which had just been given by management consultant, Andrew Wensley.

'Let me get this straight,' Veronica continued. 'Sales, Customer Services and Marketing are not only not talking to each other, on occasions they are actually working against each other. As a result of this, Pluto is losing new orders and getting an increasing number of complaints from existing customers. It's adisaster!'

'That is something of an over-statement, Ms Tsang, but essentially correct,' Andrew admitted.

'Thank you Mr Wensley. Please be so good as to wait outside while I sort this mess out.'

To the three directors sitting round the table, Veronica's request to Andrew sounded more like a threat directed at them. Certainly it was true that integration between their respective departments had become rather loose as Pluto Telecommunications had grown in size quite dramatically during the past year. The company's most recent new products had been launched tocustomers by Marketing without any advance notice or training being given either to Sales or Customer Services. For example, one customer account manager had been asked by a customer about Pluto's new combined email, fax, telephone and answering machine. The manager knew nothing about theproduct and subsequently it took her nearly 3 weeks to locate the relevant information and brochures from the Marketing department.?

'Right then, gentlemen,' Veronica announced to the three departmental heads. 'Why is it that Service aren't passing leads they pick up at a customer's premises to Sales? Why do Sales staff promise the installation of a new system to a customer in a non-standard lead time without any consultation with Customer Services?'

'We seem to have three distinct groups within the company,' suggested Matthew Craven, director of Marketing. 'Now, whilst management theorists suggest such differentiation may be indeed be appropriate for the turbulent and uncertain telecommunications environment, they also stress the need forintegration.'

'Oh, I see, Mr MBA,' interrupted Veronica, sarcastically. 'So it's not a departmental problem, but a failing of top management. How convenient!'

'You misunderstand me,' Matthew replied. 'I don't know what goes on in other departments because (a) it isn't my job, and (b) I don't have the time to find out. Isn't it possible that personnel in the three departments are motivated by different things, work to different time-scales, virtually work within different organisations?'

In truth, Matthew Craven had hit upon the major problem confronting Pluto Telecommunications. This was conceded, somewhat grudgingly, by the managing director, and over the next hour and a half she sat down with the three men in order to identify and analyse the differences between the three departments - differences which made something of a mockery of Veronica's widely-touted notion of a unitary Pluto culture.

The differences centred on three dimensions - work motivation, time orientation, and work culture. The deliberations of the four executives centred on a comparison of the three departments along these' dimensions.

Sales

Pluto's salesforce comprises account managers who are responsible for dealing with customers on a face-to-face basis and who have a portfolio of between 5 and 50 accounts, depending on the size of the customer.

According to Tim Boddy, head of Sales, his staff are motivated primarily by money - the more they sell, the higher the bonuses they receive. Their time orientation is short as they are anxious to boost their income every month. Also, staff have short time horizons, in that once having made a sale they are eager to see it is installed as soon as possible so that they can move on to the next bonus-earning sale.

Sales culture is based on, and perpetuated by, feelings of elitism and individualism. All successful sales staff have company cars, laptop computers and visibly high incomes. They tend to dress very smartly and walk around company premises in a self-confident, sometimes arrogant manner. They operate very much as individuals and rarely resort to the formal chain of command when a problem arises.?.

Customer services

This department embraces many functions, but the two main groups of employees are Reception and Engineering. Reception staff process orders taken by Sales and convert them into work orders for the engineers. Engineering staff, in turn, are responsible for the installation and maintenance of Pluto equipment and services. John Buchanan is responsible for overseeing the smooth running of the department.

Customer Service managers are driven by annual service quality targets set by top management. For example, Reception staff are targeted to answer 90 per cent of telephone calls within 15 seconds, whilst Engineering staff are targeted with installing 90 per cent of internet connections within 6 working days and repairing 90 per cent of faults within 5 hours. Results are monitored daily. Although bonuses are linked to achieving these targets, these are fairly small (a maximum of £1000 per year). In fact, more action is taken when targets are not reached. In these instances, recriminations and formal warnings of poor performance are the norm. Bad news travels faster than good in Customer Services!

Compared to Sales, the work culture in Customer Services is very formal and the structure very hierarchical. A rather bureaucratic ethos persists whereby a manager of a certain grade is often reticent to deal with a manager of a lower grade directly. E-mail messages and even written memoranda are the dominant form of communication within the department.

Marketing

The main responsibilities of Marketing personnel are product launch and withdrawal, the development of marketing programmes and campaigns, competitor monitoring, forecasting and pricing. Performance targets are ill-defined and any bonuses staff may achieve are determined more by overall company performance than by their own efforts. The department's time orientation is fairly long-term compared to Sales and Customer Service. Staff often work on campaigns for delivery in 8 months' time, so they lack the sense of urgency felt by Sales personnel.

Marketing staff usually work in teams and have a strong group identity. This is encouraged by the fact that almost all employees are university business school graduates who have never worked in any other part of the company. Indeed, stories circulating in the department stress how tough and unpleasant the engineering world is and how ruthless the sales personnel can be. Most Marketing department employees are happy to stay in their comfortable London-based office.

Conclusion

'So, we have three quite distinct sub-cultures here, gentlemen: Veronica concluded. 'Do you have any suggestions as to how we pull them together so that we can all play on the same side?'

The three directors said nothing. They weren't used to being consulted on matters of corporate strategy; internal or external. Indeed, within the Pluto's non-participative culture, Veronica's call for suggestions could easily be interpreted as a call for an admission of middle managerial weakness or failing leadership. All three directors felt that corrective action needed to be taken by senior management. Whilst they each had suggestions to make in this regard, none was prepared to air them in front of the others.

Case Resolution

Questions:

1. Outline and analyse the problems confronting Pluto Telecommunications.

2. Offer your recommendations for their resolution and give your thinking behind these suggestions.