Page 2: The changing environment
The modern business environment contains many different influences that make decision-making more complex than ever, such as technological change, competitive rivalry and global communications. The ability to make sense of these influences is particularly important for managers - on the one hand they signal opportunities, on the other they warn of threats.
Organisations that recognise the complexity of these forces can progress, survive and prosper, while those that fail to deal with change fall rapidly behind. Recent periods of industrial history are littered with the skeletons of companies that have failed to innovate and adapt to change.
Some industries go through ‘transforming eras’. Businesses are faced with progressing beyond their existing operations rapidly, through a process of radical change. By accepting the challenges presented by their business environment during these periods of change and strengthening their capacity to innovate and develop quickly, successful organisations capitalise on change to become more competitive.
Until 1984, the primary telecom operator within the UK was British Telecom (BT). BT was based in the public sector. Successive governments managed the business because it was felt that the market could not always meet social needs. Just as one operator dominated the country, two equipment suppliers dominated the market. They combined in 1987, under GEC, as GEC Plessey Telecoms (GPT). Also at this time Siemens became co-owner of GPT, purchasing a 40 per cent stake in the company from GEC.
This period was characterised by limited consumer choice and a one-price service. BT was gearing up for a major investment programme in digital telephone exchanges, but this was more technology-led rather than reflecting changing consumer requirements. The strength of GPT depended on sales of System X narrowband digital exchanges, primarily to BT.
At the time, sales were effective and provided cheap connections for voice telecommunications, which ran at low speed and were technologically linked to the System X exchanges. Though well suited for voice services, they were not capable of providing the infrastructure for the type of modern data-rich communication services many organisations and individuals have become dependent upon today.
The privatisation of BT and deregulation of the telecoms sector, including that of other national telecom companies across the world, increased competition at a crucial time. Rapidly developing new broadband technologies and the emergence of competing cellular networks would soon be able to provide services to suit the new data dependent business environment. It signalled the need for change.