Literature Review and Report-‘Telstra makes the wrong call’ Essay Example


Literature Review and Report:

Customer’s Name:

Customer’s Course:

6th September, 2011.


31.0 Introduction

42.0 Problem identification

53.0 Critical analysis

64.0 Recommendation

75.0 Conclusion


1.0 Introduction

Telstra Corporation limited is a telecommunication and media firm in Australia which mainly focuses on building telecommunication networks and the marketing of voice, mobile, internet access and pay television. It was founded in the year 1975. At first it operated as a government owned firm before its privatization. The privatization concept was done in three stages with the first one been done in the year 1997 followed by the year 1999 and the last phase was done in the 2006.

Despite been the leading provider of telecommunications service, it has faced an embarrassing situation recently. The firm risked losing its dominant position in the market due to lack of infrastructure to serve millions of its fixed line services, millions of its mobile services and millions of its mobile internet customers.

Another factor that would have risked the firm from maintaining its dominant position was the firm’s decision of not bidding in the government plan for national broad band network since they planned to invest their earnings in its G wireless plan which was worth millions and which seemed to be a preferable alternative to a system based on optic fiber cables. The management problem that is evident in Telstra is the lack of good leadership styles. Good leadership styles are a vital element if an organization wants to succeed and be way ahead of its competitors.

In organizations where bad leadership is prevalent, the organizations tend to perform poorly in terms of fulfilling their goals and objectives and also in aligning to the organizations goals and objectives (Mayer et al, 1995). For Telstra to maintain its position in the market it needs to change its current leadership styles which seem to be poor and inappropriate. This report sets out to advise Telstra to change its current leadership style and replace it with a strategic one which will enable the organization gain a competitive advantage over the other leading competitors thus been able to generate more incomes as compared to the competitors (Garcia, 2006).

2.0 Problem identification

According to Telstra’s major competitors, although Telstra currently operates as a private company it still operates as a monopoly since before its privatization it was owned by the government. The company is said to have long term monopoly control due to its earlier ties with the Australian government. Telstra Company seems to be operating in an autocratic model where the management makes all the decisions regarding the company and the opinions of others are not permitted despite of their possible benefit to the organization (Goll et al, 2001).

The CEO of Telstra did not respond correctly the external environment since after the government decision of taking fiber in ninety five percent of homes and businesses in the region he immediately departed amid market confusion, recriminations from the disgruntled shareholders this in essence revealed poor leadership from his side. According to self and Schrader the external environment in which businesses are operating on have drastically changed. Thus it is evident that the management problem in Telstra is poor leadership.

Poor leadership can potentially cause problems to an organization, since with poor leadership the company’s vision and mission have a very low possibility of been met. As a result of the organization not aligning the its mission and vision it is due to loss its customers which will also in turn lead to decreased incomes to the organization and a possibility of layoff since the company cannot be able to pay the workers due to decreased incomes.

3.0 Critical analysis

Companies operating on ancient method of leadership are finding it hard to cope with the drastic changes which are occurring in the current business environment. For companies to be successful in modern day business environments they need to put in place leadership styles that allow everyone to make decisions for instance every one makes a suggestion and they will at last decide on the best.. This mostly enables companies to retain their dominant positions in the market.

An organization with good leadership easily accomplishes its stated goals and objectives and aligns with the company’s vision and mission. Leadership is mostly seen as the process of shared influence where a person can solicit the help and support of others in achievement of common task. Good leaders hold a better position than poor leaders to communicate to their followers the visions in a way that followers can understand and are able to perform their duties in the best possible ways so as to fulfill the visions. In order to keep an organization on the competing edge, it is suggested that strategic leadership should be adopted so as to enhance performance and cope with the potential problems which may arise in current business environment and also keep in pace with the organizations major competitors.

A recent study suggests that for one understand the role of strategic leadership one need to analyze what is macro fit and micro fit. Macro fit refers to the affiliation between the external environment of an organization and structure of the organization (Park et al, 2011). Strategic leadership play a major role in creating and developing macro fit so as to achieve high performance in an organization.
On the other hand, micro fit can be termed as the affiliation between individual behaviors and structure of the organization. The strategic leadership is an essential part of applying and preserving micro fit to achieve high dedication. (Park et al, 2011, p.488). For a company to gain high performance their needs to be a cohesive existence between macro fit and micro fit.

Strategic leadership has been attributed to so many advantages. Some of which include, strategic leadership enables a relationship to exist between effectiveness and strategic leadership. Some authors also claim that strategic leadership can positively affect the organizations level of effectiveness towards its goals. Strategic leadership has been attributed with major positive consequences to an organization. Consequently, it is relevant to apply this approach and also it can assist with the management problem in Telstra. It will assist the organization toward success as long as the organization is able to make good use of its positive impact brought about by strategic leadership.

With effective strategic leadership the firm is able to decide on the strategic path of the firm; the firm is also able to successfully administer its resources, sustaining a valuable executive culture and also helps in setting up impartial organizational controls.

4.0 Recommendation

It is recommended that Telstra Corporation should put appropriate leadership styles in place. With the diverse changes which are occurring in today’s business environment, organizations need to keep up with the changes for them to be able to continue operating profitably. if organizations fails to adapt to the changes or put measures in place to deal with them it is likely to face potential risks such as loosing its market share, its market position ,its customers and some employees may even move to work in the competitor company. Strategic leadership should be implemented in Telstra since it seems as the only favorable one so as to eradicate the management problem in the company.

Strategic leadership mainly focuses on assisting organizations in enhancing the overall performance of the business and also helps in solving the problem of the organization (Petrick & Quinn, 2001).)It also helps an organization in keeping up with the changes which are occurring in the business environment. Telstra needs to appoint a manager who is also a leader with good leadership skills so as to deal with the current management problem in the organization.

According to McLaurin leadership plays a major role in decision making in an organization which will with time help the organization to succeed in the changing business environment. With a proper leader and correct leadership style the organization will not only be able to deal with the current management problem but it will also be able to gain a competitive advantage over its competitors. Due to proper leadership the organization may also gain higher profits than the competing companies.

5.0 Conclusion

Based on the above assessment it is evident that Telstra is facing a severe organization problem due to the existence of poor leadership within the organization which have potentially caused the firm to loss a percentage of its revenue and market share since the customers and shareholders were disgruntled. It is suggested that the management should appoint a leader with good leadership styles which will also steer the company to greater height in terms of the number of customers and profits.

Also the organization should try and understand the effect of immediate response to slight changes in the marketing environment as well as the advantages related to good leadership. These will enable Telstra to be able to cope well in the business environment and gain higher profits. It is also important for the management know the importance of planning and how planning may affect the organization negatively. At first Telstra may have misjudged it marketing environment for instance the close public attention, increasingly strident competitors, burgeoning technology and a government that holds open competition as its mandate. Strategic leaders must learn how to deal with diverse and complex competitive situations (Burgelman, 2001). Therefore the management of Telstra has to plan carefully for a brighter future.


Burgelman, R. (2001). Strategy is destiny: how strategy making shapes a company’s future, New York: The free press.

Garcia, H.F. (2006). Effective leadership response to crisis. Strategy & Leadership, 34(1), 4-10. Retrieved September 1, 2011, from ABI/INFORM Global. (Document ID: 986748831).

Goll, I., Sambharya, R., & Tucci, L. (2001). Top management team composition, corporate ideology and firm performance, Management International Review, 41(2), 109-129.

Mayer, R., Davis, H., & Schoorman, F.D. (1995). An integrative model of organization trust, Academy of management review, 20,709-734.

McLaurin, L. (2006). The role of situation in the leadership process: A review and application. Academy of Strategic Management Journal, 5, 97-114. Retrieved August 31, 2011, from ABI/INFORM Global. (Document ID: 1534452591).

Park, D., Chinta, R., Lee, M., Turner, J., & Kilbourne, L. (2011). Macro-fit versus Micro-fit of the organization with its environment: Implications for strategic leadership. International Journal of Management, 28(2), 488-492. Retrieved August 28, 2011, from ABI/INFORM Global. (Document ID: 2368408231).

Petrick, J., & Quinn, J. (2001). The challenge of leadership accountability for integrity capacity as a strategic asset. Journal of Business Ethics, 34, 331-343.