American Telephone and Telegraph

American Telephone and Telegraph was begun in 1885 in order to provide long distance telephone service throughout the country. For nearly a century, AT&T dominated all telephone service in the United States as it acquired American Bell Telephone in 1900. In 1984, the company was forced to divest its wholly-owned Bell operating companies, which became seven regional holding companies. Ownership of these regional holding companies was passed directly to their shareholders by transferring one share in each of the holding companies for every 10 AT&T common shares held. The divestiture effectively ended AT&T's monopoly on phone service, both local and long distance, in the United States, and marked both the end of one telecommunications environment and the beginning of another. This research examines the changing role of AT&T's board of directors during the 1980s and 1990s in light of the current business environment.

AT&T has a 20-member board of directors, with seven of those members serving as officers. Robert Allen is the chairman of the board of directors, and has organized his staff into four groups, the executives of which serve on Allen's operations committee and are responsible for the day-to-day operations of the company. Allen joined AT&T in 1988 at a time when the company was reshaping itself in light of the divestitures and at a time when many speculated that AT&T would be unable to survive in the new competitive marketplace.

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Universal Card operating unit won the prestigious Malcolm Baldrige National Quality Award in 1992, emphasizing another side to AT&T's turnaround: a commitment to customer service. So long as AT&T operated in its monopolistic environment, customer service was not considered an important key to success: customers had no other choices if they were not satisfied with the service they received from the Phone Company. The end result was an attitude of indifference and even arrogance that came to be so associated with the company that it was used by comedienne Lily Tomlin to lampoon the company on the 1960s television show, "Laugh-In." Now operating in a highly competitive environment, the company can no longer afford to alienate its customers, and it has gained a strong reputation for customer across its product lines. Some of this new commitment to customer service can be traced directly to Allen, who has brought in executives to the various operating units from outside the telecommunications industry. These executives have reshaped the corporate culture at AT&T by introducing a more informal corporate climate, emphasizing concentrating on customers or the company, and undertaking innovations that encourage both the developmen

Category: Business - A