Economy The Merger of LINKdotNET and Mobilink Essay Example

services that have set new standards in Pakistan and have introduced new trends. The broadband unit of Mobilink continues this tradition by delivering services with the same high quality client services, which has allowed the company to gain a significant market share in just one city (www.mobilinkinfinity.com, 2010). LINKdotNET, another subsidiary of Orascom Telecom, provides broadband services in various countries. In Pakistan, LINKdotNET started its operations by acquiring two existing Internet Service Providers (ISPs) known as World Online (WOL) Telecom Limited and Dancom Online.

LINKdotNET merged the resources of two companies and officially launched its operations on 02 February, 2008 after making significant investments. The company operates in over 130 cities in Pakistan and within a span of two years, it managed to increase its client base to 35,000. LINKdotNET provides services to both residential and commercial users and is ranked as the second largest broadband service provider in Pakistan, following PTCL (Pakistan Telecommunication Limited) (www.link.net.pk, 2010). Despite a successful launch and positive customer response, the company's poor management and lack of managerial skills have resulted in a failure to deliver on their promised services.

The decline in operations of the company within its first year was a result of its poor reputation and customers switching to other service providers. However, despite this setback, LINKdotNET remained the dominant broadband service supplier in the corporate sector (www.link.net.pk, 2010).

Background of the Problem: Orascom Telecom had two subsidiaries catering to the Broadband Internet market in Pakistan. One subsidiary, Mobilink Broadband Business Unit (BBU), provided WiMAX Internet services exclusively in Karachi. The other subsidiary, LINKdotNET, offered DSL, Dialup, and Corporate Business Solutions for data and internet markets across major cities in

Pakistan. Both companies served the same broadband internet market with similar customer profiles and geographical coverage. Despite being independent entities with separate departments, they were treated as rivals by the parent company. This led to problems such as consumer confusion and high operational and marketing costs. The diagram below illustrates this scenario at that time.

Orascom Telecom Subordinates

Problem Designation

The diagram above illustrates that two companies were functioning in the same market with identical clientele and organizational structure. This occurred during a period of intense market competition, resulting in increased operating costs and decreased profitability for the company. The presence of identical sections within the organization led to higher human resource costs. Moreover, separate marketing sections were targeting the same clients and unintentionally competing against each other, leading to high marketing costs. The company also faced high business operation costs due to managing separate networks, procurement processes, and inventory.

The confusion among employees and consumers regarding subordinates damaged the trade name in the eyes of clients. The article "Managerial Decision Making Models: A Application" analyzes decision making models used by Orascom Telecom's management. It examines the applied model and how it helped make the best decision for the identified problem. Two widely used decision making models are the rational and non-rational models (Bazerman & Max, 1994). The rational model is a popular approach that focuses on problem-solving through cognitive processes, involving several steps. This model has both advantages and disadvantages, as described below. Its main focus is on problem-solving when the issue is already clear to management (Bazerman & Max, 1994).

Rationale Decision Making Steps: The diagram above illustrates the five steps involved in rationale decision making. The first

step is to carefully analyze the situation presented to the organization and identify its underlying cause. The second step, also known as benchmarking of results, involves establishing criteria for desired outcomes to minimize or eliminate unwanted situations. Next, all possible solutions are explored by compiling a comprehensive list. Following this, each decision option is evaluated against the predetermined criteria. Ultimately, the best solution is identified and implemented to address the problem at hand, resulting in conclusion of the overall process.

Advantages and Disadvantages of Model: This model operates under the assumption that there exists a single optimal solution prior to implementation, reflecting a perfectionist approach. It extensively evaluates each option which can lead to delays in decision-making and potential harm to businesses if external factors disrupts the process (Graham, 1993).According to Simon (1956), this model also assumes that the decision-maker is solely responsible for evaluating the effects and future implications of each option, without actually testing them in reality.

The process of rational decision making requires the cognitive abilities and imagination of the decision maker, as well as extensive time and information (Bazerman & Max, 1994). However, non-rational models are also commonly used in decision making. One such model is satisficing, which focuses on finding a satisfactory solution rather than an optimized one. This approach is useful when there is a need to avoid lengthy procedures and evaluations of options (Gelatt, 1991). Another non-rational model is incremental decision making, which is employed for quick decisions. Instead of completely eliminating a problem, managers make small responses to minimize its impact (John, 2001).

Garbage-Can Decision Making: When faced with a clearly defined job or uncertainty about what to do, the

garbage-can decision making method may be used. This involves testing different solutions using trial and error based on entropy. It can also be applied in emergency situations where management was unprepared (John, 2001).

Approach;A; Solution Employed by Orascom Telecom: The author critically explores the decision-making approach used by Orascom Telecom to address the mentioned problem. The organization faced a strategic problem rather than an urgent and chaotic oneThe company chose to use rational decision making, considering it the best approach due to having enough time and information resources. Subsequently, they used this approach to make a specific decision, which we will now discuss.

To investigate this, the writer will take a step-by-step approach and analyze how each measure was implemented.

Problem Identification

During the time when both of Orascom Telecom's subordinates were operating individually in the same market, management began to realize that their profitability was decreasing due to an increase in operating costs. Additionally, competition in the market was at its highest level, leading to decreased prices and profit margins. To sustain or increase profitability, it became necessary to reduce costs. However, Orascom Telecom had two separate companies operating in the same market, which resulted in an excessive hierarchy. This posed a challenge for maintaining profitability and forced management to review their strategic business management in Pakistan's broadband industry.

Standards for Achieving Results
The management of Orascom Telecom established standards to increase profitability by cutting costs after noticing a decline in profit caused by high operating expenses. They were aware that while the business and market were growing, competition was also increasing as new players entered the broadband internet market. Given these circumstances, raising prices or expanding the

customer base was not a feasible option for boosting profitability. Therefore, it was reasonable and justified for management to decide on cost reduction as a means to increase profitability.
List of Solutions
At that time, the organization's management had two solutions to address this issue. The first solution involved evaluating the profitability and operations of each subsidiary and then closing down the subsidiary with lower customer base and profitability.

By merging the operations of both subsidiaries, management can transfer one business to the other, eliminating unnecessary costs. Another solution considered by management was to unite the operations of both subsidiaries and establish a new organization under the well-established GSM brand name Mobilink. Since both subsidiaries had the same organizational structure and operational sections, merging them could be done without significant disruption to daily business operations.

Examination of Each Solution

The management of Orascom Telecom carefully examined both solutions and identified the following advantages and disadvantages. The first solution, which involved closing one unit and continuing with the other, would have had a negative impact on the overall image of the organization. This could have sent negative messages to consumers and harmed the brand image. In addition, Mobilink BBU held a license for operating in WiMAX business while LINKdotNET held a license for operating in DSL and other advanced technologies, and Orascom Telecom desired to remain in both markets. Therefore, closing one operation would have resulted in the loss of licenses and exiting the business. However, this solution could have reduced operating costs and increased profitability, albeit with the mentioned risks.

The other solution, which involved amalgamating both units into one, was expected to reduce costs by creating synergies and

streamlining operations at every department level. This would eliminate duplication of resources and associated costs. Additionally, this solution would meet the predefined selection criteria and offer benefits such as combining both units and relaunching operations with a "big-bang" approach. This would send a positive message to potential customers, indicating that a large operator has merged their different operations and is now better equipped to serve them. Another advantage of this solution would be the ability to utilize the licenses of both subsidiaries and leverage the entire market. By implementing this solution, the company could compete in not only the WiMAX market but also in DSL and other high-end technology markets.

Choice of Best Solution

After evaluating the aforementioned solution options, management decided to proceed with the second option, which involved merging Mobilink BBU and LINKdotNET to form Mobilink Infinity in June 2009.

After merging, all relevant sections were combined and individual resources were used, while establishing synergies with their GSM side. Although this resulted in layoffs, the number of employees losing their jobs was lower than if alternative option one had been chosen. To provide WiMAX and other services to corporate and residential clients, Mobilink Infinity was launched, achieving desired results and improving brand image, employee clarity, and consumer perception. The company's business is growing and profitability is increasing, confirming the success of this decision. However, there are restrictions that needed addressing for even better execution and more fruitful results. The writer has identified some of these inherent restrictions (Bazerman & Max, 1994). Making rational decisions is time-consuming; thus management took a long time to complete this process. Evaluating each option took over a year, during which marketing

for both subsidiaries was halted. However, the business continued selling to customers without any marketing support (Gelatt, 1991).

The intense competition in the market required full selling support for any organization to gain market share. However, the decision-making process, which took one year and involved both subordinates, severely impacted the business. As a result, the competition continued to build their brands, while new competitors aggressively entered the market, causing the business to decline rapidly. This decision was made at the Egypt headquarters and the same process was used globally to merge broadband entities with GSM entities, further prolonging the timeframe. The overall duration of this decision was longer than expected, causing the business to miss out on opportunities that the competition took advantage of (Gelatt, 1991). Additionally, a flaw observed by the writer in this methodology is that it is a step-by-step process, preventing management from moving to the next step without completing the previous one. This results in further time consumption, despite knowing what needs to be achieved and how it can be achieved.

As Orascom Telecom is a large organization, they cannot afford to continue their business at any stage. This is why they were unable to explore more options as solutions and only relied on two previously mentioned decision-related options. There could have been alternative options instead of closing and merging the business. However, their evaluation phase would have cost them more losses in business, which is why they stuck to only two solutions for the defined problem (John, 2001).

Another limitation of the model used by Orascom Telecom is that it does not support creative decisions. Since the result area is already defined and

business managers are bound by reason, they tend to search for and explore the decision that makes common sense and could be sold to management. In order to achieve the desired outcome of a problem, there are always some tried-and-true solutions that come to mind for managers. By following this rational model, and in an effort to be rational, managers tend to ignore creative ideas for problems that may initially not make sense but could have benefited the organization more than the usual solutions (John, 2001).The built-in restriction in rationale determination in the theoretical account leads directors to adhere to their principles and disregard creative options. This is because the rationale theoretical model is already a lengthy process that requires evaluation and prediction of outcomes. This results in extended decision-making time for directors who are under pressure to make timely decisions. One way to avoid these limitations is for the organization to employ parallel analysis techniques. Instead of allocating all resources to one step at a time, they could increase the number of directors working on the problem and have them work simultaneously on each step. This would reduce the time taken to make decisions to a few months, allowing the organization to exploit valuable opportunities that would have otherwise been missed.By utilizing dedicated resources and recognizing the different competitive environments in Pakistan and Egypt, the organization could have achieved desired results quickly. However, they faced the problem of holding everything on hold during decision-making, which was ineffective in the disruptive and competitive external environment. This led to missed market opportunities and compromised their position as a leading telecom player. (Graham, 1993)

In order to avoid

such a situation, they should continue giving marketing support to their products. By doing so, when they establish the new entity formed and come up with a solution, they will not miss the market (John, 2001).
How this Module Affected My Decision Making
This module has positively affected my problem-solving and decision-making abilities. As a student of management, I encounter different problems daily, both at work and in everyday life. These problems vary in complexity and urgency. Sometimes, immediate decision-making is required for critical issues, while for others, complex decision-making with sufficient time is needed. There are also situations where we are unaware of the true nature of the problem. This module has changed my perspective on approaching different situations. It has taught me that there is a solution to every problem, regardless of its complexity. Through careful analysis and root cause analysis, a complex situation can be turned into a favorable one. It has also taught me not to judge a situation based solely on its surface appearance.I have also learned that after experiencing the current job, I can use a route map as a guide to finding solutions. Throughout various training sessions, I have learned how to identify solutions and respond to different challenges in my professional and personal life by applying different decision-making models.

I have also learned about the best model for decision making and problem solving for different situations, how to handle immediate problems, and how to solve problems with long-term effects. Through this course, I am confident in my decision making and problem solving abilities and can apply them in my personal and professional life.

The paper aims to explore various decision

making models and their applications through a real-time case study on Mobilink, Pakistan's leading telecom company under Orascom Telecom, one of the largest telecom operators globally. The study examines a real-time problem faced by the organization in the broadband industry where they had two subsidiaries operating under different names but in the same market. This duplication of operations significantly impacted their profitability. To address this issue, the organization employed a rational decision making model and decided to merge both subsidiaries. The study also identifies limitations and proposes steps to avoid such shortcomings.The following text discusses how engaging in this faculty has impacted the writer's decision-making and problem-solving skills. Additionally, it explores how the writer intends to apply the knowledge and experience gained from this faculty in both personal and professional aspects of life.