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Case Study On Lucent Technologies

2980 words - 12 pages

Lucent has its roots to a company which has a history of more than 120 years, yes, once it was is a part of AT&T. AT&T and the U.S. Justice Department settle a 1974 antitrust suit. AT&T agrees to divest its local telephone companies. AT&T divided into several business units, including AT&T Network Systems, AT&T Global Business Communications Systems, AT&T Microelectronics and AT&T Consumer Products, which later combine with Bell Labs to become Lucent Technologies.In September 1995, US-based telecom giant AT&T announced that it would be restructuring itself into three separate companies - a services company, retaining the AT&T name; a products and systems company (later named Lucent Technologies); and a computer company (which assumed the name: NCR).AT&T proposes forming three separate, publicly traded companies to serve the increasingly divergent business needs of its customers. Lucent Technologies launches its separation from AT&T with an initial public offering that is the then-largest ever on the New York Stock ExchangeIn early 1990 when internet & telecommunication industry was booming in market there was a huge demand for products which will speed up the data & voice transmission through network. And to develop such products it required really big & huge research & development, to innovate the product as pre market requirements, and it had a strong back of Bell Labs which had more than 28000 patents in technologies related to voice and & data transmission.At the time it was spun off from AT&T, Lucent was already a major player in many businesses - mobility, data, optical and voice networking technologies, professional network designs and consulting services, web-based enterprise solutions which linked public and private networks, and optoelectronics and communications semiconductors. By 1997, Lucent was the leading telecom equipment maker and was lauded as one of the biggest success stories of the 1990s. Lucent began to capture the market shares of its major competitors in the equipment business, namely Motorolaand NortelNetworks.However, in the late 1990s, the data traffic business was growing more rapidly than the voice traffic business. As the Internet and data traffic businesses gained ground, Lucent lost its competitive advantage in its core business of telecom equipment supporting voice traffic.Organizational Structure & CultureIn response to the proliferation of new customer in its market, in the late 1990s Lucent reorganized its 3 operation division into 11 largely independent business. With the accelerating growth of its company, both in revenue, customer and employees, Lucent’s senior management felt that a decentralized and autonomous decision making structure would enable more customer responsiveness and faster, better-focussed innovation.Richard McGinn then the CEO of Lucent Technologies realised the opportunity and decided to setup 11 independent...

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