Change Management - France Telecom

Thèmes abordés

France Telecom - Change Management - France - Succes - International

Résumé du document

Michel Bon has faced deep financial problems during his presidency of France Telecom due to investment mistakes he committed. He resigned and then in October 2002 accesses Thierry Breton as chairman and CEO of the company receiving the world debt record of 72 billion Euros. Thierry Breton faced an emergency that lead to implementation of a restructuring plan.
The main objective of T. Breton was the debt: with the help of 140 consultants, he created a plan called "Vision 15 +15 +15".

15 billion debts renegotiated with the banks, 15 billion euro capital increased and above all an aggressive program of cost-killing, of the same amount. The first two 15 have been made in four months and the third was spread over three years around a savings program called "TOP". This program aims to cut 3 to 4 billion Euros in spending. To pass his plan "TOP" Breton decided to centralize all power and bypass the hierarchy.

Extraits

[...] III) Change Organization In 2002, Thierry Breton arrives in leading company telecommunication market. This position reflects a history of monopoly, and the acquisition of strong brands, such as Wanadoo, Orange, and Equant. The company has managed to develop in various sectors such as fixed telephony, mobile telephony, Internet, television, etc . In addition, Breton found a very decentralized and fragmented which prevents the transmission of information between the activities and causes a lack of synergy and cohesion. Thierry Breton's change in several stages: A. [...]

[...] Thierry Breton's organizational structure To strengthen monitoring procedures and internal controls Thierry Breton applies a matrix structure. This new business organization is fully in pursuit of its objectives (debt reduction). All major decisions are taken by the General Directorate, which provides more unification and strength to the company and in parallel allows better coordination with each division. The Executive Committee will be structured to ensure the success of the TOP Program, each member of the Executive Committee will be responsible for a number of projects. [...]

[...] The main objective of T. Breton is the debt: with the help of 140 consultants, he created a plan called "Vision 15 +15 billion debts renegotiated with the banks billion euro capital increase and above all an aggressive program of cost-killing, of the same amount. The first two 15 have been made in four months and the third was spread over three years around a savings program called This program aims to cut 3 to 4 billion Euros in spending. [...]

[...] However, the record of 2005 shows that Breton has won his bet. Indeed, he managed to reduce debt, increase performance, upgrade to the group on the stock market . However, to achieve his ends Breton had to sacrifice the human aspect, which may adversely affect the whole group: indeed if short-term job cuts and up pressure employees have not jeopardized the work of the group, it is possible that this would create a sense of non-motivation and disappointment with regard to superiors, and the group in general. [...]

[...] IV) Leadership style Michel BON (1995 2002) Bon is convinced that the best way to run a business is to be based on decentralization. Thus, it will gradually diminish the role of management and increase the autonomy of branch managers. The advantage of this style of management allows employees to feel involved in the business, but also leads to inconsistent strategy and a central unclear who might create power relations and tensions within the group since no more reason on behalf of the group but on behalf of each branch individually. [...]