202201100932 - Bell Labratories

p115 - Case studies in Decision Making

  • Four strategic decisions { Theodore Vail made in the course of twenty years with the Bell Telephone System

    1. "Our business is service"
      1. Managers are responsible for service results. It is then the job of top level management to organize and finance the company so as to make the best service also result in optimal financial rewards
    2. Setting the Bell Telephone System the objective of making regulation effective
      1. Innovate concepts of regulation and of rate-making that would be fair and equitable and would protect the public, while at the same time permitting the Bell System to do its job.
    3. Establish one of the most successful scientific laboratories in industry, the 202201100932 - Bell Labratories

      1. How can one make such a monopoly truly competitive?

        1. One can organize the future to compete with the present.
          1. The future lies in better and different technologies.
        2. Bell Labs first extended telephone technology so that the entire North American continent became one automated switchboard
          1. the transmission of tv programs, computer data, communication satellites
    4. The AT&T common stock
      1. with it's almost guaranteed dividend, this common was close enough to a fixed interest-bearing obligation for widows and orphans to buy it. At the same time it was a common share so that it held out the promise of capital appreciation and of protection of inflation.

Alfred P. Sloan, CEO of GM

  • GM a loose federation of almost independent chieftains
  • Problem: The big business needs unity of direction and central control.
  • Solution: Decentralization which balances local autonomy in operations with central control of direction and policy
    • The operating managers have to have the freedom to do things their own way. They have to have responsibility and the authority that goes with it. THey have to have scope to show what they can do, and they have to get recognition for performance.