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.
Since 1984, the company has had to redefine and reshape its image, corporate culture and corporate mission. No longer protected by monopoly from competition, the company has lost a significant share of its long distance market to competitors such as MCI (which initiated the antitrust suit) and Sprint. While AT&T has successfully entered other markets, it is the ready cash that its long distance operations provide that enables it to expand its core business.
The changes that the divestit...