Preston University

CASE: Adjustment and Adaptation - - - MA Bell Style

Course: Name: Reg# : Program: Sem:

Public Relations Ammar Khan 1511-210-013 B.B.A Fall 2013

Sub To: Sub Date:

Sir Ahmed Butt

02nd December, 2013

Adjustment and Adaptation - - - MA Bell Style

After Microsofts alleged domination of the software industry, court ordered divestiture of Bell System. On January 1, 1984, the then-107-year-old American Telephone and Telegram split into eight separate companies which are AT&T and other seven regional companies. The old AT&T was the world largest company, having position as a virtual monopoly and employer of almost a million telephone people. Its transformation stands as an extreme example of system adjustment and adaptation to a changed environment. During the long court fight against divestiture, AT&T was planning a new structure to respond to the legal, social, economic, and technological environments. After divestiture AT&Ts Chairman announced an advertisement, Weve been working to make the biggest change in our lives a small change in yours. Theodore N. Vail, twice chairman of AT&T (1878 to 1887 & 1907 to 1920), pioneer in making the corporation responsive to its social setting. He hired James D. Ellsworth to begin public relations program that anticipates and responds to public interests. By the early 1990s AT&T and the other seven regional companies had broadened their missions and product lines they manufactured computers and other communication equipment, expanded their publishing businesses, diversified their communication services, and became leaders in the generation and transmission of information. Cable television companies, other manufacturers, publishers, and the other telephone companies faced not on, but eight competitors. By the late 1990s, mergers had reduced the number of regional companies to five, and AT&T had once again divested. On September 20, 1995, AT&T announced that it was restructuring into three separate publicly traded companies: a systems and equipment company (Lucent Technologies,) a computer company (NCR) and a communications services company (remains AT&T.) It was the largest voluntary break-up in the history of American business. AT&T also began building high-speed fiber optics voice

and data transmission networks, and even reentered the local telephone service business in 1999 by linking its operations with Times Warners millions of cable television lines. In short, AT&T transformed itself into a powerful player in a new digital, wireless, and multimedia environment. It is no longer The Telephone Company or Ma Bell. The old AT&T adjusted and adapted. AT&T consultant Chester Burger recalls that in the early 1980s there were 1,700 full-time public relation specialists on AT&T payroll with a total budget of about $170 million. Much of the public relations effort was to defend the companys historic monopoly in providing telephone service and equipment that could be connected to the system. Burger concludes that: 1. Public Relations strategy cant overcome broad social factors. 2. It is easy to convince yourself that corporate self interest coincides with the public interest. 3. Technology is changing the world. Simply put, AT&T either had to change or it would have followed other corporate dinosaurs into extinction.