The document describes changes made to the organizational structure and work processes at AT&T Credit Corp. (ATTCC) in the 1980s. Initially, ATTCC's work processing customer applications, claims and accounts was inefficient and divided across narrow departments. In 1986, ATTCC reorganized into cross-functional teams of 10-15 employees each to handle customers end-to-end. This reduced processing times and increased the number of applications handled daily. The teams were also given autonomy and incentives like bonuses, improving employee satisfaction and motivation. As a result, ATTCC was able to grow rapidly at 40-50% annually.
The document describes changes made to the organizational structure and work processes at AT&T Credit Corp. (ATTCC) in the 1980s. Initially, ATTCC's work processing customer applications, claims and accounts was inefficient and divided across narrow departments. In 1986, ATTCC reorganized into cross-functional teams of 10-15 employees each to handle customers end-to-end. This reduced processing times and increased the number of applications handled daily. The teams were also given autonomy and incentives like bonuses, improving employee satisfaction and motivation. As a result, ATTCC was able to grow rapidly at 40-50% annually.
The document describes changes made to the organizational structure and work processes at AT&T Credit Corp. (ATTCC) in the 1980s. Initially, ATTCC's work processing customer applications, claims and accounts was inefficient and divided across narrow departments. In 1986, ATTCC reorganized into cross-functional teams of 10-15 employees each to handle customers end-to-end. This reduced processing times and increased the number of applications handled daily. The teams were also given autonomy and incentives like bonuses, improving employee satisfaction and motivation. As a result, ATTCC was able to grow rapidly at 40-50% annually.
The document describes changes made to the organizational structure and work processes at AT&T Credit Corp. (ATTCC) in the 1980s. Initially, ATTCC's work processing customer applications, claims and accounts was inefficient and divided across narrow departments. In 1986, ATTCC reorganized into cross-functional teams of 10-15 employees each to handle customers end-to-end. This reduced processing times and increased the number of applications handled daily. The teams were also given autonomy and incentives like bonuses, improving employee satisfaction and motivation. As a result, ATTCC was able to grow rapidly at 40-50% annually.
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GROUP 5
DALIDA, Johnssen B. GO, Jonathan Charles PEREZ, Shannen Nicole M. RENGEL, Chelsea Lei B. 3 BSBAMG3A
Case: 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 Bonus Wajnert 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 highvolume division serving small businesses. The three major leaseprocessing 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 Cash The 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 Context 1985 II. Viewpoint President Thomas C. Wajnert ATTCC President III. Statement of the Problem The company has improper staffing and organizing
IV. Statement of Objectives
Short Range Objectives -To add managerial positions and improve the employees performance within a year Long Range Objectives -To maintain the order of authority after a year
V. Areas of Consideration / SWOT Analysis
Strengths -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 repetitive Opportunities -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 operations
VI. Alternative Courses of Action
ACA # 1 Additional Managerial Positions Advantage: 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
Chart Advantage: Divide different duties and functions of management employees Disadvantage: Employees will have a difficulty adapting to the new changes in the companys organizational structure
ACA # 3 Add departments to organize the
grouping of work among employees Advantage: The company will be able to organize units manageable size Disadvantage: Added expense for the company
VII. Recommendation I recommend that ACA # 1 should be used to solve companys problem. ACA # 1 Additional Managerial Positions Advantage: 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 Action
1.Make a budget proposal and discuss the proposed additional managerial positions to the companys Board of Directors 2.Approval to Top Management 3.Review of the companys Organizational Chart
4.Add managerial positions
5.Re-evaluate new and old employees performance 6.Train and prepare the employees to perform their job 7.Promote employees who are qualified of the job
Top Notch Executive Interviews: How to Strategically Deal With Recruiters, Search Firms, Boards of Directors, Panels, Presentations, Pre-interviews, and Other High-Stress Situations
Top Notch Executive Interviews: How to Strategically Deal With Recruiters, Search Firms, Boards of Directors, Panels, Presentations, Pre-interviews, and Other High-Stress Situations
