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Assignment Detail:-

• Topic: Managing People and Organisations
• Document Type: Research Summary
• Subject: Management
• Number of Words: 1000
• Citation/Referencing Style: APA 7

Cellular Telecommunications Case Study

Cellular Telecommunications, known as Celltel, is a leading Australian telecommunications company that owns a majority of Australia’s infrastructure for phones, internet and cell phone towers. They also sell plans for mobile phones, internet, home phones and various services to large corporate clients and the Australian Government.

They occupy a massive stake in the B2C, B2B and B2G markets. Estimates suggest Celltel has more than 17 million customers in Australia and is in the Top 15 largest global telecommunications companies. Its Australian share price is one of the highest on the stock exchange (ASX) with plans to expand to many overseas locations than at present. Their immediate goal has been to set up businesses in other parts of the Asia Pacific region.

Due to recent increasing inflationary costs in Australia including property, wages, and insurance fees, Celltel has decided to move its primary call centre to Indonesia. A decision has been made to operate small, but more specialised call centres in Australia but with the possibility of being offshored in the future.

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As Celltel does not have experience in the Indonesian market, they hired a new senior management team for the Indonesian operations. Consisting of majority Indonesian nationals and a few Australian personnel who are expected to fly to Indonesia. The team is known as CISM, the Celltel Indo-Senior Management Team.

The Indonesian operations include 1500 employees and 50 managers of different levels. An operating site has been finalised for the new call centre in an area that was previously regarded as not a economically developed area when compared to the much popular urban areas.

Celltel identified a suitable site for their operations, however this was initially intended to be a building project to cater to the local housing problem but had not completed its construction due to government mismanagement. It was the current Indonesian government’s understanding that Celltel would invest in the development and completion of this infrastructure as a part of their move to the area.

Although the Indonesian Government heavily promoted the benefits of a foreign company investing in the development of the suburb, the local Indonesians were concerned about the 20,000 people who would be affected by this as they were in line to get housing if this project had been realised as planned previously. These locals were worried that they would now be pushed off the land. The locals feared that they would not be able to find employment, due to fact that they could only speak their own language but did not have a good command of English.

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In 2023, Celltel was successful in establishing their call centre in Indonesia. For the first year the call centre was doing very well meeting targets in terms of the amount of calls they handled per hour, spending less money on wages than their budgeted allowance, no rent costs, low turnover rates (staff resignations/terminations), minimal overtime paid and limited customer complaints about service provided by the call centre. But everything drastically changed recently, impacting both the Indonesian and Australian operations.

For the past 6 months complaints have been increasing, staff turnover rates are double the average of the Indonesian call centre industry and staff have begun to stop working through strikes, protesting outside Celltel’s gates. Several Indonesian news channels, newspapers and social media focused on the strikes, writing negative stories about Celltel.

These were helped by interviews from past and current workers and managers. This is in addition to Australian customers complaining about rude service, long wait times, and incorrect product information leading to official complaints being submitted to the Australian Government to investigate.

The local communities, who were upset that no locals were being hired, joined the protests. The locals were hoping to find employment at Celltel, therefore they had big plans. What they had witnessed, though, was very different from what they had anticipated. The majority of the employees that Celltel hired were from outside of their local area. One consequence of Celltels hiring led to an accommodation crisis since the accommodation available at the company was not sufficient for all recruits.

Due to the company’s recruitment approach, the locals were not keen to accommodate the rapid surge in demand for lodging even though it meant good business for the locals.

The workers are refusing to work unless their demands are met soon. Demands relate to higher pay, more breaks and conducting training and providing career opportunities as promised to workers when hired.

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These are various comments made by the Indonesian employees;

“The Australian managers in the CISM team are paid Australian equivalent wages whereas the Indonesian nationals in the same team are not. This is not fair! I have a Bachelor’s and Master’s in Business and over 5 years of managerial experience working in call centres but I get paid far less doing the same job as my Australian colleagues”

“At Celltel I get paid the same as workers who have no experience and no qualifications!” one call centre worker told the local news channel when protesting outside the call centre building.

“Our Australian call centre colleagues are getting paid up to 10 times more than us and work fewer hours! They get maternity leave, sick leave and more holidays than we do! I am not working again for Celltel until the CISM team changes our pay and benefits!” said another employee at the protest.

“It is no easy task to get personal leave approved when needed. However, this is not the case if you have a special relationship with the managers and/or are considered a manager’s pet”

“Our offices are cramped up. We feel like we are working in a chicken coop. There is not much space to move around and it becomes very hard when working long shifts”

“We work in large groups. Sometimes, we don’t even know who is in our team. It does not allow us to work cohesively and it becomes hard to achieve group goals like bringing the calls per hour down as a team”

The recent high staff turnover rates and strikes have had serious effects on the company. The whole team’s demands were ignored. This left no one with the correct skills to take calls or advise of service problems to the Australian engineering team leading to the Australian national emergency services’ phone number (000) having to be shut down for several minutes without warning.

The supervisors in charge were not trained enough to be able to step in and handle calls or train staff on the job. As a result of the team’s resignation, Celltel breached their Australian Government contracts which were quickly cancelled. Celltel was also forced to pay multimillion-dollar fines to the Australian Government and a parliamentary investigation was ordered by the Australian Prime Minister.

Remaining contracts with the Government and other large corporations are currently in review with expectations that many will be cancelled in the near future potentially resulting in a loss of hundreds of millions of dollars, if not billions in revenue for the Australian telecommunications company.

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Even managers are concerned about the situation. One front-line manager said to the local newspaper:

“I have pressure on me to push my team to reduce the average call time so we can answer more calls per hour. But how am I meant to motivate and encourage my team to do this when they don’t pay them well compared to Australian operations and they have removed almost all incentives because everyone is underperforming? It is impossible for me as a manager! Then they tell me I am a bad manager and a leader! They say it’s my fault!”

A middle manager who left the company a couple of months ago told an lndo television network:

“I’m not surprised about complaints as some of the teams are useless! They lack the right training for the computer systems used and key skills such as customer service, teamwork, communication and even their writing abilities are not the best. There is so much pressure to answer as many calls as possible, managers often say training is conducted but rather than doing the course, the team is answering calls.”

“Staff are often put on the phone without completing their six-week initial training,” said another manager.

“Then I am expected to have a high-performing team? How can I with staff resigning, striking, having no skills and often I have to look after other teams as the managers have resigned? My wife tells me I should resign but I am worried I won’t get good references for a new job as I have heard CISM gives no good references!”

“Managers often do not regard how their employees feel at work. They only care if the call rates per hour is maintained. Their supervision is to ensure call rate targets are achieved. It is hard to recall a time a supervisor had genuinely checked if their staff were doing ok”.

Other managers commented that employees are increasingly hired because their relatives work for Celltel’s CISM or they have connections and/or are related to Indonesian politicians. These people also generally have no skills or qualifications. Furthermore, first-line managers have been told not to allow toilet and water breaks during the day.

“An email to managers said staff on the phones must only take breaks during their allocated 45-minute lunch. This is so difficult considering a lot of our workers end up doing 10-hour shifts! I had one employee who wasn’t well and ended up peeing at their desk! So embarrassing. All because CISM wants us to take more calls and not having employee-centric policies!” a first-line manager told an Australian radio station.

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A review of pay slips and documented daily breaks for all workers by the Australian Celltel operations confirmed many of the comments made by Indonesian managers. Minimal bonuses are paid and those that are awarded are only given to middle and top Indonesian Managers. Further analysis shows only certain managers receive regular bonuses. It seems those managers who get such incentives are those that have some kind of connection to the CISM such as being related to them or directly hired by them.

Another finding was that the average working day is 10 hours for employees taking calls, two hours more than the legal limit. Although employees working 10 hours should be paid overtime, they are not and rather than getting three breaks a day, they are only getting a 45-minute lunch break.

When asked why this was outside the Celltel building a middle manager responded “It’s not my fault! No one knows whose responsibility it is to ensure correct pays are paid or check to see how many hours a worker has done a week. I just do what I am told by my manager: ‘Teams must answer as many calls as possible as quickly as possible’.

In a video the Indonesian press received, a top manager was recorded saying in a meeting “Where does it say the average working day is 8 hours? Where does it say everyone is entitled to bonuses?! Where does it say people need 3 breaks a day?! It is all lies!”

An article in a leading Australian newspaper highlighted serious concerns with the training of staff at the Celltel Indonesian call centre. Based on reliable research and sources, the article states:

After spending several weeks undertaking training at one of Australia’s leading telecommunications companies at their Indonesian operations base, a journalist discovered some shockingly inaccurate stereotyping of Australian customers being taught to new Indonesian employees taking and making calls to Australians.

Staff go through three weeks of training learning about conversational skills and Australian culture. The training manual states: “Australia is known as the dumbest continent in the world. Education and Universities’ did not exist there until recently, so speak slowly as they are stupid and don’t understand basic English”.

Trainers also advise staff “Australians are racist, they are alcoholics so the best time for you to ring them to sell mobile phone plans is Friday nights. If they tell you to go away or get angry at you, you’re allowed to hang up on them or insult them back.”

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Within an hour of the article being published, it was picked up by several large international media corporations making global headlines. Several complaints were then made to the Australian Government requesting such a matter has to be formally investigated with thousands of people posting online their negative experiences with Celltel’s Indonesian call centre.

As a result of this, Celltel’s share price dropped by 60% over a week with more than 400,000 customers cancelling their Celltel service plans and many more inquiring about cancellation costs.

Celltels customers were disappointed to read the news and voiced their opinions on social media.

“We have been with this company for many decades, many generations. We will no longer want to be associated with a company that treats us like this”

“I have not considered changing my service provider even when all my friends have asked me to. This is how you reward my loyalty?”

“I have advocated for Celltel countless times in my friend circles. Now I hear this! I feel Celltel has let me down. I am done”

Investigation shows that training including courses on Customer Service, Product Knowledge and Complaint Call Handling is run by an external local Indonesian company called Indo-Meter. However, there is no documentation of this company being formally interviewed or reviewed when originally awarded the multimillion-dollar training contract. There is also little documentation of which staff member has done what training. Journalists who have investigated Indo-Meter found this company’s CEO to be the daughter of one of the CISM Team.

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Understandably, the Indonesian Government has advised Celltel to investigate these issues as a matter of urgency and has agreed to work with the Australian Government where needed. However, they have asked for discreteness and complete confidentiality in the investigation as they are concerned that the situation could impact the Indonesian Call Centre Industry which is under a lot of pressure from other countries such as India becoming the new investment destination for foreign companies. However, the Indonesian media often put this request down to the sensitive matter that many Indonesian politicians’ relatives work in the CISM as well as many politicians being major shareholders in the company.

Australian operations are genuinely concerned about how things have turned out with their move to offshore their call centre operations to Indonesia. Their company has taken a massive beating from losing customers to having negative PR and investigation being carried out etc. With the hope of minimising any further possible damage to Celltel, the company has decided to hire an expert external management consulting team to step in to help restore the Indonesian operations and prevent further damage it can cause to the company and its reputation.

As a leading Management Consultant who specializes in business process improvement, you have been hired to provide expert advice to the client by providing a 1000 (+/- 10%) word report.

Your report must identify 1 New Major problem and analyze it with relevant permitted Management theory.

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