One Tel Corporation
One.Tel is a telecommunications company that was launched in May 1995 by Jodee Rich and Brad Keeling. Initially, it was a reseller of Optus network before later on decided to enter the deregulated telecommunications industry. One.Tel believed such deregulation could bring them many advantages. With its major competitors like Telstra and Optus viewed as being bureaucratic, slow pace, and old-fashioned, One.Tel promoted flat adhocracy culture as opposed to bureaucratic. It also used the “dude” mascot, a young cartoon character to create a youth-oriented image as it targeted more to youngsters and average people. Since then, One.Tel grew rapidly as a low cost mobile phone service provider and succeeded to acquire many customers. Unfortunately, One.Tel had to enjoy its golden years for only a short period of time before finally ceased in 2001. This paper provides the discussion of the causes of One.Tel collapse and the solutions that should have been taken by the management in order to survive. The arguments in this paper are based on the theories and concepts of organization theory. And the writer put them in sequent with each argument discussed for the purpose of easy-reading.
The collapse of One.Tel was due to many problems covering its organization structure and culture, corporate governance, weak control of the board directors, poor strategic management, and IT system. From One.Tel first establishment, it has been too greedy to formulate good strategies that fitted well for its early days. It was just focusing on acquiring customers as many as possible. According to Barry 2002, it offered cheap call rates and credit to customers without checking customers’ credit capabilities as it was only focused in gaining large customer base more than anything else. While in fact, those customers did not contribute to the profitability of the company. The account receivable of the company increased with only part of it being paid by customers, and as consequences the cost of
The collapse of One.Tel was due to many problems covering its organization structure and culture, corporate governance, weak control of the board directors, poor strategic management, and IT system. From One.Tel first establishment, it has been too greedy to formulate good strategies that fitted well for its early days. It was just focusing on acquiring customers as many as possible. According to Barry 2002, it offered cheap call rates and credit to customers without checking customers’ credit capabilities as it was only focused in gaining large customer base more than anything else. While in fact, those customers did not contribute to the profitability of the company. The account receivable of the company increased with only part of it being paid by customers, and as consequences the cost of
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