University of California
Type of paper: Thesis/Dissertation Chapter
Report will focus on analysing the existence of power
This report will focus on analysing the existence of power, control and resistance within an organisation with particular reference toward Australia’s largest and most successful telecommunications provider, Telstra (Telstra, 2013). Applying widely recognised theoretical frameworks and concepts against these focus areas, a critical analysis has been conducted and assessed with the findings referenced throughout the report determining the positive and negative impacts each are having on Telstra the organisation and its stakeholders. The three focus areas of power, control and resistance are major influences within any organisation and critical to its success. Power and control can be perceived as being the same within an organisation, however there are key differentiators between the two that is important to identify and understand. Both power and control of an organisation can have various levels of influence on its stakeholders depending on a companies geographical or workforce size and culture. A level of power labeled as “Domination” identifies the way that an organisation can ultimately shape the preferences, attitudes and even political outlooks of its stakeholders (Sadan, 1997). The area of control stems from the introduction of “scientific management” introduced by (Taylor, 2007). Taylor’s methodologies of control are still predominant in many modern organisations that adopt various means to maintain a controlled workplace. Such means can consist of forms of surveillance such as email and phone scanning, remote working arrangements and segmentation of skills. Jermier, Knights, & Nord refer to resistance within an organisation as constituting forms of power that’s exercised by subordinates within a workplace. Example forms or “faces” of resistance are refusal, voice, escape and creation. With an understanding of the theoretical frameworks and concepts of these three focus areas, various stakeholders of Telstra have been interviewed to construct a comprehensive analysis on what impact power, control and resilience is having on the organisation and its stakeholders.
Being one of the largest organizations in Australia, power, control, and resistance is spread throughout the companies multiple functions and sectors. It is these elements that aid in shaping the way Telstra operates.
This fact has led to various methods being utilized to collect and critically analyse information on Telstra regarding these three aspects of organizational behaviour. Both primary and secondary research was conducted for this report. Primary sources include conversations with Telstra stakeholders in conjunction with online secondary research. Stakeholders include employees of Telstra as well as the customers themselves. By learning about their experiences with Telstra a better understanding of the organization was created as well as how power, control, and resistance are evident in Telstra. The use of primary and secondary research allowed for power, control and resistance to be critically analysed in Telstra. A number of theories were also addressed in the analysis of Telstra. Relevant aspects of power, control, and resistance were explored and applied to Telstra to develop this report. As power, control, and resistance are different elements of organizational behaviour, a range of theories needed to be used in order to properly analyse Telstra. This also led to the stakeholder interviews being less formal due to questions having to cover such as large industry and often transparent elements of organizational behaviour. To address the issue of power in Telstra, a number of cases were used to identify the scope of power itself in Telstra and how those in power are at times abusing it or using it as a tool for manipulation. In some cases, the extremities of Telstra are clearly shown. Alongside this evidence and research, the theoretical framework of the ‘four faces of power’ derived from Lukes (1986) and Foucault (1977) was used for analysis of the company. As Telstra is a very large company, appropriate control systems and management of control is essential throughout all the functions of the business. To analyse how control plays a critical role in Telstra, different functions of the organization and their appropriate control mechanism were explored. This was done through researching into examples and cases of how Telstra has managed it’s control systems. Similarly to the use of the ‘four faces of power’, resistance was also analysed using a comparable framework. The framework used was the ‘four faces of resistance’. This framework helped to highlight areas where employees show resistance and how far they can take it. Research and cases gathered coupled together with the four faces of resistance aided in presenting and analysing the various issues of resistance and how it exists in Telstra.
“Power is derived from owning and controlling the means of production and how this power is reinforced by organisational structures and rules of governance” (Weber and Marx, 1948) Telstra as an organization consists of management hierarchy comprising of numerous Directors and Executives that hold responsibility for the direction and public image of Telstra. These positions at times are extremely demanding as their everyday decisions can, and will have an effect on the business profits and customer satisfaction levels. Power is crucial amongst these ranks as it is required to make necessary changes and improvements to policy and procedure in the highly competitive industry of telecommunications. Ultimately the responsibility of the performance of Telstra resides with the CEO (David Thodey) and the supporting Directors (executive and non-executive). As the ‘Top-level manager’, David Thodey makes decisions affecting the entire company. He does not direct the day-to-day activities of the company; instead he sets goals for the organization and directs the company to achieve them. An example is the announcement of a strategy of market differentiation and a renewed focus on customer service and satisfaction (Telstra Website, 2009). Top managers are ultimately responsible for the performance of the organization (Simmering, 2007). Following the top-level management group is the middle-level managers, who set goals for their departments and other business units. Middle managers are charged with motivating and assisting first-line managers to achieve the company’s objectives. They also play an important role by communicating and offering suggestions to the top managers, as they are more involved in the day-to-day workings of the company. The next level of management is the first-level. This level is responsible for the daily management of the employees who actually produce the product or offer the service. Although first-level managers typically do not set goals for the organization, they have a very strong influence on the company, as they are the managers that most employees interact with on a daily basis. Telstra’s use of coercion internally has become evident in various situations. By assessing the four faces of power we can see how intimidation towards workers has resulted in a number of public outbursts. An unethical and undisclosed strategy was introduced by Telstra during 2008
whereby 15,000 employees were targeted to sign up to Australian Workforce Agreements (AWA) before the ban on agreements was to be imposed by the Government (Eastley, 2008). A confidential Telstra document showed that managers were given 29 pages of tips on how to best convince workers to signing up to AWA’s (Hawley, 2008). The document urged managers to use psychological profiling of employees when considering who to target and were rewarded with bonuses once successfully signing workers up to workplace agreements. This method of power is an example of coercion. Telstra has clearly done something unethically in this situation. The company’s actions have demonstrated a coercive environment that maximises pressure through psychological manipulation.
Domination is a level of power that identifies the way in which an organisation can ultimately shape the preferences, attitudes and even political outlooks of its stakeholders Lukes (1986). Telstra’s domination of most communications markets and its ability to leverage market power across markets is a consequence of its structure. The result is the failure of competition affecting all consumer groups. The ideal solution is a form of structural separation of Telstra. This objective can be achieved through the creation of a regulatory package that delivers as much of the benefit as possible that would be derived from structural separation, while acknowledging the limitations of real separation to address the core incentives of Telstra to favour itself (Competitive Carriers’ Coalition Inc, 2005). Workplace bullying is a widespread issue that can only be resolved through an implementation strategy targeting all employees. Employers need to be held accountable and have a strategy in place to protect the employees from this offence. Unfortunately this is not always the case, in some instances the employer is the one orchestrating the bullying. A recent case in which the Administrative Appeals Tribunal overruled Telstra’s decision not to pay compensation to an ex-employee for stress and psychological injury shows that it is possible to resist intimidation (Sdrinis, 2012). Mr Sami was successful in wining his compensation claim against Telstra for work-related psychological injuries and in particular in relation to bullying and harassment by his manager over a period of time. This case underlines that management’s often-used tactics of subtle bulling and
harassment to push people out the door has a human cost which the law is prepared to recognise. Within most major companies, including Telstra, workers have to live with the threat of losing their jobs and this case should encourage workers to stand up to workplace harassment and, if victimized, seek legal advice and compensation.
In order to regulate and manage organisational activities and resources, so that accomplishing goals and objectives are possible, organisations need control. It is a significant part of running any business so that a targeted element of performance remains up to organisational standard. There is a considerable amount of responsibility that goes into managing control, as there are many different levels and areas in which organisations define control. Information Resources is an area of control in which include sales forecasting, environmental analysis and production scheduling. In a recent article, Telstra has reported a 12.9 per cent increase in net profit, reaching $3.9 billion, and an increase in revenue up two per cent to $26 billion (Bartholomeusz, Technology Spectator, 2013). Telstra chief executive officer David Thodey said it was the “third consecutive year of significant customer growth for Telstra mobile, driven by $1.2 billion of investment in the network during the year.” As profit results slightly bettered expectations, this can only leave a positive impact on employees, shareholders and the organisation itself. For instance, as a result of meeting organisational goals and objectives, employees get to keep their job, and keep the shareholders content. In any organisation, operations control is needed to control the processes used to transform resources into products and services. As Telstra is constantly aspiring to grow as a company and are faced with new business opportunities, changes in operational processes takes place as a result, workers find themselves jobless. The terminal decline of Telstra’s once-dominant telephone business and the rise of new business opportunities have forced the telco giant into a major operational restructure that will affect half the company’s 30,000 strong domestic workforce (Bingemann, 2013). (Telstra Chief Operations officer Brendon Riley, is likely to see hundreds of jobs cut from the telco as it transitions its operations and IT divisions from infrastructure-based
businesses to more of a software and services future (Bingemann, 2013). Although this may mean good news for Telstra advancing as an organisation, this change in operations control is affecting the lives of 30,000 loyal employers and their families. Telstra’s financial control plan has an upside and a downside. Like most organisations, a budget control provides a way of measuring performance across different aspects within the company. Also control the financial resources as they flow into, are held by, and flow out of the organisation. Telstra while having generated some $2 billion in savings has punished workers by cutting 1,000 net local jobs over the past two and a half years (Bartholomeusz, Business Spectator, 2013). Although the savings are benefiting Telstra’s fast-growing mobile business, the price to pay is substantial for those 1,000 workers who need to make ends meet. Telstra has insisted that it can simultaneously cut costs while improving customer service by reducing errors, queries and complaints that allow it to, for instance, reduce call centre staff (Bartholomeusz, Business Spectator, 2013). As technology advances, so does the way people do things. With the new possibilities of using apps and online resources to ask questions, queries and form complaints, the need for call centre workers reduces sizeable
Within the multinational telecommunication company Telstra, numerous accounts of resistance both internally and externally have risen from management decisions by the company’s head. Several incidents have occurred in which the public and workers have raised their voice in resistance against some of the giant’s actions. By assessing the four faces of resistance, we can see typical and expected responses from the public and workers. One incident occurred earlier this year in February. Telstra slashed over 700 jobs from their Sensis network, which resulted in mass rallies and protests by union leaders and workers alike (Conifer, 2013). This method of resistance is an example of ‘voice.’ By publicly displaying and enforcing their dissatisfaction against the loss of their jobs, the union workers are resisting Telstra’s actions. The rally and protests have been constructed to highlight the unsatisfactory methods of Telstra. As Telstra grows as a company, many Australian jobs are being sent offshore, particularly to Asian
nations. The rapid growth of the company forces management and corporate heads to expand the company to increase revenue and profits, at the expense of Australian jobs. In July of this year, over 170 jobs were sent offshore to India, which lead to widespread union outrage (Bingemann, www.theaustralian.com.au/business, 2013). The Communication, Electrical and Plumbing union, as well as the Community and Public Sector unions protested and demanded negotiations in regards to job losses. The fact that unions stood up and resisted to sacrifice their jobs highlights an internal voice of the company. This resistance from the unions demonstrates a type of power that workers have within their job, to stand up against unsatisfactory managerial decisions. (Bingemann, www.theaustralian.com.au/business, 2013) The third face of resistance represents the ‘escape’ side of work. This face is made up of three tools: cynicism, scepticism and dis-identification. Dis-identification refers to the disconnection from ones identity and the work environment. In an incident that occurred in April of 2007, a young girl committed suicide after been given unrealistic work goals and hassled by management staff of Telstra to return to work during her stress leave (Masanauskas, 2007). This amount of pressure lead to her suicide, and the change from her once “vibrant personality” was transformed into a “nervous wreck” (Masanauskas, 2007). The young women’s parents described the Telstra staff to be treating their daughter “like a machine.” From this tragedy, the union demanded realistic work goals and targets. The dis-identification from ‘human’ to ‘machine’ within the workplace highlights the third face of resistance, to escape work. However, this escape was much more serious and punishing, for it was not just a mental escape from work, but a suicide.
Throughout this report it is made evident that the three focal behavioral characteristics of organisations can have a major impact on its stakeholders. Although these impacts can be both positive and negative it is clear from the examples provided that a balance between what’s positive to both an organisation and its stakeholders remains a huge challenge to maintain. Telstra has been used as a case organisation due to its operational size and market reach throughout the country and spreading to different cultures internationally. Various methods were used to gather and analyse information specific to the affects of power, control and resistance from both internal and external stakeholders of the company which formed the basis of or report. Power of an organisation over its stakeholders is seen almost always as a negative characteristic but is critical to an organisations success. It was found that power in Telstra is delegated down through a hierarchal management structure to manage staff and performance. This lead onto analysing which control methods are being used within Telstra such as performance goals and project deadlines, which have been founded to be a major cause of many bully and stress related complaints. Due to the mismanagement of power and control various cases of industrial action and even suicide has been reported as a form of resistance from stakeholders. This resistance has a negative impact on the public image of the organisation and can potentially affect its market value. It is critical for organisations to achieve a balance between economic growth and ethical practices. Until this happens cases such of those highlighted in the report will continue causing restraint and harm to both the organisation and its stakeholders.