Research Paper on "Power Politics Conflict and Culture in Organizations"

Research Paper 10 pages (4896 words) Sources: 1+

[EXCERPT] . . . .

Power, Politics, Conflict and Culture in Organizations

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Power, politics, conflict and culture in businesses can augment output and effectiveness or reduce them considerably. Political process can establish organizational survival and strategic direction. Restructuring, which is frequently encouraged as much by internal power efforts as by external market circumstances, is prompting managers to search out new strategic directions for their companies. In the course, political reflections are changing the career of a lot of workers, both managers and non-managers. At the same time that these proceedings are creating occasions for some, they are costing a lot of others their jobs. Understanding power, politics, conflict and culture is consequently critical to managerial achievement and continued existence in today's business world.

The organization that will be the topic of discussion in my final project paper is Verizon Telecommunications. Verizon (NYSE:VZ) is one of the leading providers of cellular and telecommunications services globally, operating in 150 countries with 92.2 million customers globally. During their latest full fiscal year (FY), the company reporting $110B in revenues, an increase of 4% of their previous full fiscal period. Verizon attained a $12.8B operating profit in their latest fiscal year, which was a decrease of 12.1%. Net Profit during these two time periods also decreased by 5.7% during these fiscal years as well, with the company reporting $2.4B in FY2011. As with many cellular and telecommunications services providers, Verizon has gone through several reorganizations, each being focused on making the company more efficient at driving top-line revenue growth. The strategy has worked to this point and today the company has two globally-based business divisions, Verizon Wireless and Wireline. Verizon generates the majority of their revenues from the consumer segment, the majority of profits from the business and government sectors. In these latter segments it is more difficult to displace a cellular or telecommunication provider once contracts and service agreements are in place. This strategy of lock-in in the business and government sectors have compensated for the exceptionally high churn with consumers and small businesses, a problem that a Customer Relationship Management (CRM) system could solve. Having a more effective CRM system that combines analytics that can measure lifetime customer value, support advanced churn analysis including data gathering, feature selection, modeling and analysis and report generation are essentials for Verizon to retain both its business or enterprise, government and highly volatile consumer accounts. The telecommunications industry's most common benchmarks of performance include Customer Lifetime Value (CLV), involuntary and voluntary churn, gross and net attrition and Recurring Monthly Revenue (RMR) (Jallat, Ancarani, 2008). Telecommunications companies often create dashboards based on the integration of financial, CRM, operations and analytics enterprise-wide applications, so they can track these metrics accurately, often with daily updates. The quality and quantity of this data has a significant effect on the organizational structure, distribution of power, politics, the potential for conflict and the overall direction of the culture of these businesses over the long-term. The politics of information are accentuated when analytics become central to decision making, the allocation of resource, and the rational for continually investing in new programs (Chartrand, 1985). Where advanced and more accurate information flows, power follows. Chief Information Officers (CIOs) who are astute and politically savvy realize this and design organizational structures that allow for greater agility and flexibility, while designing in safeguards against the accumulation of too much data and control in one given department. The politicizing of customer data, more specifically sales analysis and key performance metrics, often has a contrarian effect on the performance of marketing teams, as the goal becomes making the numbers on the dashboards look good, not necessarily actually accomplishing anything of value in the market (Piercy, 1989). This is the dilemma all high-churn business models face and one exacerbated within Verizon who has grown through mergers, acquisitions and been re-shaped through divestures. All of these factors taken together continue to re-shape and redefine Verizon Communication's, making the flow of information and knowledge more difficult, yet paradoxically making business, enterprise, government and consumer accounts more important than ever before.

Problem Statement

Turbulent industries including telecommunications tend to create a more transactionally-driven leadership style that can descend into autocratic decision making when market conditions become to uncertain and challenging in a very short period of time. The telecommunications industry landscape is a brutal one, where mergers, acquisitions, pricing and service bundling programs can quickly render one competitor at a strategic disadvantage over another. This is the reality that Verizon Communications executives live in daily, and are challenged with in terms of attaining the selling, marketing, new product development and services programs.

The problem for Verizon Communications executives face is to how to increase the level of collaboration and communication throughout the company at a time when fear, uncertainty and doubt are forcing the creation of silos, protected enclaves of one executive group vs. another, and the emergence of power cliques. Exclusivity is starting to occur when inclusivity needs to be the focus. This exclusivity is starting to impact the performance of the analytics, CRM, financial management and customer service systems. Instead of having these systems unify the management and leadership of the company, it is becoming increasingly divisive and the data included in them not shared or entered at all from each department. If this continues from a CRM and customer management standpoint, soon the sequence of processes and steps to reduce churn of consumer and small business accounts will break down, and customers will be lost quickly as a result.

This balkanization or siloing of Verizon Telecommunications has also been exacerbated by their continual merger and acquisition strategy, which has thrown together very diverse corporate cultures, different systems, customer acquisition and service practices, and approaches to reducing churn. It is no surprise that the majority of mergers fail as a direct result of incongruence and lack of consistency in leadership mindset and shared values, including the willingness to cooperate and collaborate or not (Peaks, Gordon, O'Keefe, 2009). This is a symptom of the broader strategic problem of how information systems are being used as a means to "wall in" separate business units and lock out other business units and service lines that need the data to also compete. Instead of striving to be inclusive and take into account the broader and far more urgent need to coordinate across all divisions of Verizon Telecommunications, the leaders of the company are creating more exclusivity of processes and most important, customer information. Power and the ability to control politics follow the flow of information and knowledge (Chartrand, 1985). This is especially true in Verizon Telecommunications where the accumulated result of mergers, acquisitions, downsizings and re-organizations have left the company in need of a unifying strategic vision and overarching series of objectives. Conflict within Verizon Telecommunications will escalate and eventually each major operating unit will isolate itself and create its own siloed operational structure unless steps are taken to unify the company again. The myriad of problems Verizon Telecommunications has in ensuring its CRM systems stay unified and focused on minimizing churn while increasing revenue can be tracked back to this fundamental disconnect in leadership direction and values of exclusivity vs. inclusivity.

Literature Review

It is common for organizations to experience a significant amount of dysfunctional decision-making when the industries they are involved in are going through turbulent, uncertain and often unprofitable times. This is exactly what Verizon Telecommunications continues to experience. The tendencies of operating units at this point in any industry cycle is to retreat, become closed, and seek to hoard any relevant information they have that is perceived as potentially valuable for selling or serving customers. When this occurs, an organization being to atrophy and fall apart. Instead of allowing this to happen and the organization self-destruct, the senior management and leadership team need to concentrate on creating a shared learning environment and shows how critical it is for each department and vision to contribute their expertise for the common strategic goal of survival in a very turbulent industry. Creating the opportunity for organizational learning is therefore critical for the re-unification and solidification of the entire corporate structure, as empirical studies have shown (Ferdinand, 2004). This is the precursor to creating a culture and climate of trust, which in turn would motivate a more inclusive mindset over the natural tendency of exclusivity when organization's face high level of uncertainty and risk. Creating and maintaining organizational learning at a structural level and also one that can unify siloed departments needs cannot be nurtured into place in Verizon Telecommunications however. The combined effects of power over specific departments and divisions, coupled with the potential value of analytics, CRM, pricing and customer service data have created a very divisive culture. Democracy and collaboration cannot necessarily be used for creating the organizational learning framework and values for the initiative to succeed. Senior management must become the champion of organizational learning with the explicit goal of unifying the entire organizational structure through better communication and collaboration (Ferdinand,… READ MORE

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