Organizational Analysis: PCCW Directories
Introduction
Organizations today operate in a competitive environment. Different environmental factors have changed the way organizations function. In order to be successful, an organization needs to be able to compete effectively through its resources, capabilities, and strategies. This paper attempts to analyze the organizational processes, design, strategies and structure of PCCW Directories, a subsidiary of PCCW Limited.
Company Background: PCCW Directories
PCCW (Pacific Century Cyber Works) Limited is the largest and most comprehensive communications provider in Hong Kong and one of Asia’s leading players in Information and Communications Technologies.
PCCW Directories is a part of the Advertising and Interactive Services. It offers highly-effective advertising solutions primarily to small and medium-sized businesses via traditional print directories and catalogues. PCCW Directories is a wholly-owned subsidiary of PCCW Limited. PCCW Directories is one of the leading directory market players in Asia.
Primary Business of the Organization
The company specializes in directory services. Advertisers and users are able to connect through the company’s integrated media platform. The company offers print products and online and telephone inquiry directory services. Among the primary businesses of the company are:
- Internet Yellow Pages – attracting 23 million page views per month, Internet Yellow pages (IYP) is one of the most popular portals in Hong Kong and offers customers maximum advertising exposure on the Web (PCCW: Annual Report 2005).
- Online Search Advertising – this provides a one-stop, online search advertising services that covers local, mainland and overseas markets.
- Mobile Yellow Pages – through the mobile yellow pages, consumers are now able to search for, and connect to local services and merchants instantly using their mobile phones (PCCW Directories Ltd. 2008).
Size of the Organization
Approximately, there are 14,500 employees working in PCCW. The company has a presence in Europe, the Middle East, Africa, the Americas and mainland China, as well as Hong Kong and other parts of Asia.
Structure of the Organization: Hierarchy of Authority
Like many Asian contemporaries, PCCW is a family controlled firm. Historically, Asian firms are highly centralized. PCCW was tightly controlled and managed in hierarchy dominated by the founders and their immediate family members. The hierarchy of authority is considered as centralized. Centralization according to Hendrick (2002) has something to do with where formal decision-making occurs within the organization. In centralized work systems, formal decision-making is concentrated in a relatively few individuals, group, or level, usually high in the organization. The board of directors of the company is responsible for the management of the company. key responsibilities include formulation of the overall strategies of the company and its subsidiaries, the setting of management targets and supervision of management performance (PCCW Annual Report 2005).
However, because of intense competition, globalization and demands for Asian firms to adopt western style of management, firs such as PCCW are starting to adopt a more flexible corporate structure (Yeung 2005). PCCW is positioning itself as a major telecom player in the Asian Region, with long-term ambition to venture into the established markets in Europe. PCCW is now venturing into the UK’s wireless broadband business while its core business remain in Hong Kong’s fixed lines. This wireless broadband venture is new to the UK market as well as there are currently no operators offering such services.
Mintzberg’s Configurations
Mintzberg (1979) developed a taxonomy of organizational structures in different categories of organizations – the entrepreneurial, bureaucratic (machine and professional0, divisional, adhocracy, and matrix. He suggested that, as organizations grow, they undergo structural changes – from the entrepreneurial to bureaucratic, divisional and finally matrix structures. The growth of PCCW has led to the formation of other divisions, which handle different businesses. PCCW Directories is one of the divisions of PCCW. We can say that the organization’s structure is divisional.
Corporate Mission and Strategy: Differentiation
The most dominant strategic management paradigm in recent years is known as competitive strategies model. Exemplified by Porter’s (1980, 1985) work, this approach addresses the issue of how firms compete within their product markets. Porter identified two competitive advantages that provide a firm with a defensible position: cost leadership (lower cost) and differentiation. The lower cost advantage is defines as the ability to more efficiently design, manufacture, and distribute a comparable product than the competition. Products with unique and superior value – in terms of quality, features, and after-sales service – are examples of the differentiation competitive advantage.
PCCW pursues a differentiation strategy. To keep ahead of its competitors, PCCW is adding new services as quickly as possible on all fronts. Differentiation according to Oden (1997) is a strategy with which the organization seeks to distinguish its products or services from those of competitors. The firm may use advertising, distinctive product features, exceptional service, or new technology to achieve a product perceived as unique. In order to fulfill its differentiation strategy, PCCW Directories offer innovative services and technologies to its consumers. For example PCCW Directories has formed partnerships with online giants such as Google, eBay Hong Kong, SINA Hong Kong and Yahoo! Hong Kong. Users are also able to perform keyword searches via Mobile Yellow Pages to find retailers and suppliers, as well as enjoy discounts and privileges from more than 10,000 participating outlets. These are some of the strategies that PCCW Directories is employing to achieve differentiation (Quin and Cameron 1983). The company is able to achieve its mission of providing quality service to its customers. The organizational structure supports the company’s strategy.
Life Cycle Stage
PCCW Directories can be considered as a company that is in the entrepreneurial stage. In the entrepreneurial stage, executive dominance is established through personal, informal management patterns and structure, flexible communication and coordination procedures both within the organization and with its environment. Personal attention and rewards are given for the mobilization of resources and attainment of legitimacy for the organizational domain from the external environments. The creation of the organization’s ideology, and the paternalistic reward system does not rely only on the level of professionalization of the executive, but rather on his or her entrepreneurial skills.
Technology and Control in the Organization
According to Duncan (1979) structure is a pattern of interconnections, interactions, and coordination that links the technology, tasks and human components to ensure that the organization accomplishes its purpose. Duncan categorizes a business structure in terms of two general types: functional and decentralized. Most businesses are one of these two, or some mixture of the two. The functional business structure is divided into departments and groups according to the function they perform, while the decentralized organization makes products or geographical divisions independent. Communication in the functional type is usually vertical, up and down a pyramidal structure. The decentralized structure cuts down on the directions from the top and allows each division to act as an autonomous business. We can say that PCCW, because of different factors such as globalization and its rapid expansion has moved from functional to a more decentralized organization structure. PCCW Directories as a subsidiary acts as an autonomous business.
Environment Factors
Every organization faces a different reality in the marketplace depending on its products, customers, technologies, government influences, and so on. To be successful, the organizations need to perform certain activities very well. The environment where the organization operates is an important factor in its success. The external environment is an important factor that affects a company’s goals, objectives, strategies and performance. It is also important in the setting of company missions and corporate culture (Deal and Kennedy 2000). The internal analysis provides an objective understanding of the controllable factors in the organization’s internal environment, identifying those with the greatest long-term impact on the organization’s position. The objective of this analysis is to identify the organization’s major strengths and weaknesses with respect to its overall mission.
There are different market forces that affect the company’s operation and strategies. The policies and regulations set by the Hong Kong government and regulatory bodies that oversee the telecommunications and media sectors namely the Office of the Telecommunications Authority (OFTA) and the Broadcasting Authority (BA).
Hong Kong’s growing economy has a tremendous impact on the growth of the company. Because of the flourishing economy, strong demand for data services is growing. General growth led to more business premises requiring services. PCCW Limited is committed to maintaining a high standard of corporate governance and strives for transparent, responsible and value-driven management focused on enhancing the value of the company to its shareholders.
Organizational Culture
Organizational culture includes the values, norms, rites, rituals, ceremonies, heroes, and scoundrels in the history of the organization. organization defines what a new employee needs to learn to be accepted as a member of the organization. Each organizational culture divides into multiple subcultures. An organization’s structural design creates varying subcultures and processes within the organization. Subcultures grow readily within these differentiated parts of the total organization. They also grow readily within departments, divisions, and different operating locations of an organization. Organizational culture plays several important roles in organizations. The two major roles of culture are (1) adaptation to the organization’s external environment, and (2) coordination of internal systems and processes (Sims 2002).
When it comes to control, the corporate governance principles of the company place emphasis on upholding a high standard of ethics and integrity in all aspects of its business, and on ensuring that affairs are conducted in accordance with applicable laws and regulations. The Chairman of PCCW is and the Group Managing Director is The role of the Chairman is separate form that of the Group Managing Director. The Chairman is separate for overseeing the functioning of the Board while the Group Managing Director is responsible for managing the Group’s business.
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