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General Managemnet Essay

655 words - 3 pages

Case: 1

TRI – STATE TELEPHONE

John Godwin, Chief executive of Tri – State Telephone, leaned back in his chair and looked at the ceiling. How was he ever going to get out of this mess? At last night’s public hearing. 150 angry customers had marched in to protest Tri – State’s latest rate request. After the rancorous shouting was over and the acrimonious signs put away, the protesters had presented state regulators with some sophisticated economic analyses in support of their case. Additionally, there were a number of emotional appeals from elderly customers who regarded phone service as their lifeline to the outside world.
Tri – State Telephone operated in three states and had ...view middle of the document...

Digital technology was going forward, leading to lower casts and requiring companies like Tri – state to invest to keep up with the state of the art. Meanwhile, rate increases negotiated during the inflationary 1970s were keeping earnings higher than regulators would authorize. New “Intelligent” terminals and software developments gave rise to new uses for the phone network (such as using the phone for an a arm system), but as long as customers paid one flat fee, the phone company could not benefit from these new services.
Godwin’s company has recently proposed a new pricing system whereby users of local telephone services would simply pay for what they used rather than a monthly flat fee. All of the senior managers were convinced that the plan was fairer, even though some groups who used the phone with notable frequency (like real estate agents) would pay more. It would give the company an incentive to bring new services to their customers, and customers would be able to choose which ones to buy. None of them had anticipated the hue and cry from the very customers who would...

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