GROUP 5

GROUP 5DALIDA, Johnssen B.GO, Jonathan CharlesPEREZ, Shannen Nicole M.RENGEL, Chelsea Lei B.3 BSBAMG3ACase: AT&T CREDIT CORP.*Millions of clerical employees toil in the back offices of financial companies, processing applications, claims, and customer accounts on what amounts to electronic assembly lines. The jobs are dull and repetitive and efficiency gains minuscule when they come at all.That was the case with AT&T Credit Corp. (ATTCC) when it opened shop in 1985 as a newly created subsidiary of American Telephone & Telegraph Corp. Based on Morristown, New Jersey, ATTCC provides financing for customers who lease equipment from AT&T and other companies. A bank initially retained by ATTCC to process lease applications couldn't keep up with the volume of new business.ATTCC President Thomas C. Wajnert saw that the fault lay in the bank's method of dividing labor into narrow tasks and organizing work by function. One department handled applications and checked the customer's credit standing, a second drew up contracts, and a third collected payments. So no one person or group had responsibility for providing full service to a customer. The employees had no sense of how their jobs contributed to the final solution for the customer, Wajnert says.Unexpected BonusWajnert decided to hire his own employees and give them ownership and accountability. His first concern was to increase efficiency, not to provide more rewarding jobs. But in the end, he did both.In 1986, ATTCC set up 11 teams of 10 to 15 newly hired workers in a high-volume division serving small businesses. The three major lease-processing functions were combined in each team. No longer were calls from customers shunted from department to department.The company also divided its national staff of field agents into seven regions and assigned two or three teams to handle business from each region. That way, the same teams always worked with the same sales staff, establishing a personal relationship with them and their customers.Above all, team members took responsibility for solving customers' problems. ATTCC's new slogan: Whoever gets the call owns the problem. The teams largely manage themselves.Members make most decisions on how to deal with customers, schedule their own time off, reassign work when people are absent, and interview prospective new employees. The only supervisors are seven regional managers who advise the team members, rather than give orders.The result: The teams process up to 800 lease applications a day versus 400 under the old system. Instead of taking several days to give a final yes or no, the teams do it in 24 to 48 hours. As a result, ATTCC is growing at a 40 percent to 50 percent compound annual rate, Wajnert says.Extra CashThe teams also have economic incentives for providing good service. A bonus plan tied to each team's costs and profits can produce extra cash. The employees, most of whom are young college graduates, can add $1,500 a year to average salaries of $28,000, and pay rises as employees learn new skills.It's a phenomenal learning opportunity, says 24-year-old team member Michael LoCastro. But LoCastro and others complain that promotions are rare because there are few managerial positions. And everyone comes under intense pressure from co-workers to produce more.The annual turnover rate is high: Some 20 percent of ATTCC employees either quit or transfer to other part of AT&T. Still, the team experiment has been so successful that ATTCC is involving employees in planning to extend the concept throughout the company.They will probably come up with as good an organizational design as management could, Wajnert says, and it will work a lot better because the employees will take ownership for it.Case 5: AT&T Credit Corp.I. Time Context1985II. Viewpoint President Thomas C. Wajnert ATTCC PresidentIII. Statement of the Problem The company hasimproper staffing and organizingIV. Statement of ObjectivesShort Range Objectives -To add managerial positions and improve the employees performance within a yearLong Range Objectives -To maintain the order of authority after a year

V. Areas of Consideration / SWOT AnalysisStrengths -ATTCC is growing at a 40% to 50% compound annual rate -Employees are productive and efficient

Weaknesses-Rarity of promotions resulting to insufficient managerial positions- The jobs are dull and repetitiveOpportunities-The newly graduate students can open growth to the company-Investors who are willing to invest in the company

Threats -Presence of other credit companies -Natural calamities that may affect the companys operationsVI. Alternative Courses of ActionACA # 1 Additional Managerial PositionsAdvantage: Chance of promotions to employees who do their task well.Disadvantage: Added expense for the company because managerial positions require additional salary

ACA # 2 Implement an Organizational ChartAdvantage: Divide different duties and functions of management employeesDisadvantage: Employees will have a difficulty adapting to the new changes in the companys organizational structureACA # 3 Add departments to organize the grouping of work among employeesAdvantage: The company will be able to organize units manageable sizeDisadvantage: Added expense for the companyVII. RecommendationI recommend that ACA # 1 should be used to solve companys problem.ACA # 1 Additional Managerial PositionsAdvantage: Chance of promotions to employees who do their task well.Disadvantage: Added expense for the company because managerial positions require additional salary

VIII. Plan of Action1.Make a budget proposal and discuss the proposed additional managerial positions to the companys Board of Directors2.Approval to Top Management3.Review of the companys Organizational Chart

4.Add managerial positions5.Re-evaluate new and old employees performance6.Train and prepare the employees to perform their job7.Promote employees who are qualified of the job

Time FrameThe StepsWho will do the stepsThe time to be finishedStep #1ATTCC President1 monthStep #2Top Management2 weeksStep #3President and Middle Management1 weekStep #4President1 week Step #5President and Middle Management1 month and 2 weeksStep #6Middle Management6 monthsStep #7President and Middle ManagementNo definite time