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BELL: A Corporate Overview

By Edited May 31, 2014 0 1

Executive Summary

Mission and purpose

Bell Canada is a Canadian communications company specializing in “wireless, wireline, internet services and video services to business, residential and wholesale customers” [13].  They have a long history providing a lot of firsts for Canadians, the first long distance line, the first commercial mobile telephone service and the first mobile browser all show that Bell is a current company always pushing new frontiers [13].

General Environment

Bell has a good name with high consumer confidence.  They also own two discount brands which that allow them heavy market penetration. They must abide by Canadian labour laws and the interests of their customers [16].

Specific Environment           

Bell has a wide variety of suppliers.  They have television network suppliers, cellular telephone suppliers and hardware suppliers.  These suppliers enable them to offer telephone, television and internet services.  Bell’s customers are key to their success.  Competitors for Bell include:  Rogers, Shaw and Telus [14]

Corporate Strategies

Bell’s corporate strategy is to utilize a growth strategy.  They do this by widening their product offerings.  They also own a number of stores which help them with a more vertical integration.  They also have expanded their own company through the purchase and addition of some subsidiaries, like Solo and Virgin Mobility [30].

Business Strategies

Bell focuses on unique products and services that distinguish their company from the competitors.  They have a clear customer commitment which provides for their clear customer centric attitude [15].

Corporate Structure

Bell has close to 55,000 employees.  They are managed in a seven layer management system.  This creates a closer relationship from middle management and top management.  The company is organized into product departments [13]

Ethical issues

Bell has a lot of social responsibility.  They currently help out in their communities by encouraging volunteering and providing grants for local community programs [24].  They have not always been leaders.  They have had issues with CEP regarding pay equity [31].

Corporate policies

Health and safety are key Bell corporate policies.  They protect their employees and customer with clear guidelines and standards.  Bell has a diverse workforce and concentrates on the four designated groups mentioned in the employment equity act [23].

Corporate Leadership

Bell operates in a dynamic environment.  By providing cutting edge services they need employees to be able to adapt and change as needed.  This creates a strongly competitive environment, though according to employees one that encourages.

Controls

Bell has a basic and understandable way to show how they are doing. They come out with regular oral and written reports, goal and budget analysis, and make these public.  Bell has such an excellent system that they are rated 10 out of 10 by Governance Metrics International [17].

Bell Logo

Mission and Purpose

Bell Canada Enterprises (Bell) is a Canadian communications company specializing in “wireline voice and wireless communications services, Internet access, data services and video services to residential, business and wholesale customers” [13]. Bell was founded in 1880 after Melville Bell, father of telephone inventor Alexander Graham Bell, sold the rights to Charles Fleetford Sise [21].  Since then the company has expanded its services, but still keeps its roots in the telephone. 

            Since its inception, Bell has been able to stay on top of the changing technologies and services in the telecommunications industry.  As far as core competencies go, the telephone and telecommunications technologies are unmistakably Bell’s. From the first “‘long distance’ line between Hamilton and Toronto”[33] in 1881 to the “first commercial mobile telephone service”[3] in 1947 to the first mobile browser in 1999 [33] Bell has been able to stay at least current with its technology, if it is not pioneering it.  Bell continues this today, as it has recently upgraded its wireless network to provide “a well-defined path to next generation data services”[33].

            In 1997 Bell built another core competency and moved into the television service industry when it launched its satellite television service, ExpressVu[15] (now Bell TV).  ExpressVu started out with 55 channels and now has over 500 channels and 1.8 million subscribers [13]. Currently, Bell is looking to increase its competency in this industry, and therefore its subscriber base, by bringing fibre optics into new multi dwelling units (condos), a place “[Bell] had not been focused” [21] before.

            Bell’s competitive advantages extend from their core competencies, especially in the telephone related industries.  As of December 31, 2008, Bell had about 6.5 million wireless subscribers [30] which is over 30% of the 62% of Canadian wireless subscribers [19] or about 20% of all Canadians.  To maintain their competitive advantage here, Bell needs to keep on top of the emerging technologies that will carry the industry forward.  They have done this by “[turning] on the world’s most advanced wireless infrastructure in November [2009]”, the Canada wide HSPA network[28].

            Bell has another competitive advantage that they have gained through supporting the Olympics, including the recent Winter Olympics here in Vancouver.  By being one of the national partners of the 2010 Games[29], Bell undoubtedly increased its visibility when compared to its major competitors, and gained the unique opportunity to “provide all voice, data and broadcast services for fans, media, athletes and officials from around the world, and will be the backbone that enables all Olympic and Paralympic connectivity” [30]. Due to the exclusivity of the Olympic advertising, none of Bell’s competitors are able to advertise on the Olympic broadcast channels, nor are they allowed to use Olympic themes in their advertising, making the Olympics a major competitive advantage for Bell.

The General Environment

Being that the Bell brand is branded as a full service, and high quality, they experience slower subscriber growth rates, perhaps even decline, during times of economic downturn.  The level of consumer confidence, the disposable income of consumers, and the price of the products and services is the main reasons for sales to decline. In this economic slowdown Bell has had issues selling its value added services, voice mail, internet and call display for example.  This is where Bell’s discount brands, Virgin and Solo,  come in. Virgin and Solo explicitly target people that are having economic difficulties, picking up the slack that the Bell brand loses [30].  Bell has a large market which consists of multiple demographics with a market penetration of about twenty percent [21].

Bell also has an online store that enables consumers to make purchases, view account details, pay bills, and download pictures and songs. Bell also offers a live chat on their website to make available sales support agents who can assist consumers with any questions or concerns they may have [32].  As for Bell TV, there are many channels that consumers might be interested in, especially in Canada where the demographics range significantly across the country.  These channels can be localized and packaged to meet the needs of different communities with different interests.  These channels may not be widely wanted, but Bell still needs to make them available to the consumer.  [32].

The labour laws of Canada are also something Bell needs to be aware of and follow.  The Canadian Human Rights Act, the Privacy Act, the Sarbanes-Oxley Act, and the Canada Business Corporations Act [22] all restrict what Bell can and cannot do. These restrictions go from what they are allowed to broadcast on television to how they can advertise and how they can treat their employees. Bell could be fined or shut down if they do not follow the laws and regulations [27].

The Specific Environment

Bell has a wide variety of suppliers due to the wide variety of services that they offer [15].  For Bell Mobility, suppliers are companies like Apple, RIM, Samsung, Motorola, and Qualcomm.  For its satellite division its suppliers are television networks like NBC, HBO, and SpikeTV [13].  As a land line provider it has a wide variety of suppliers such as individual contractors, and larger companies which provide electrical services, network maintenance, and painting services [21].

Bell’s customers are people of all ages, races, and sexes; people who watch television, use the internet, have a mobile phone, or a house phone. The customers play an important role in the company’s success, because if they feel the products and services are praiseworthy they will become loyal customers as well as encourage others to use Bell products and services [15].

Bell is affected by competition as consumers are able to purchase cable, internet, and phone plans from rival companies such as Shaw Communications Inc., Rogers Communication Inc. and TELUS Corporation. These companies all offer similar products and services to Bell, so consumers may end up purchasing products and services from their competitors.

A new issue that Bell faces is the potential prohibition of using a cell phone a while driving.  Provinces are beginning to realize the dangers of cell phone use in the car and are creating laws to lessen these dangers, such as in BC where it is now illegal to talk on a cell phone while driving a vehicle, unless you are using a hands-free device.  As this spreads across the country, it could hurt the sales of cellular service.  Bell can also use this to increase their sales of hands-free devices.

The stakeholders of Bell Canada are the employees, customers, community, shareholders and investors. Its employees, shareholders and investors all benefit directly from Bell’s successes and failures and are the first to feel any changes in Bell’s environments.  Its customers, both actual and potential, are affected by how Bell performs.  If the company continues to pioneer new technologies, Bell can continue to offer new services to its existing customers and perhaps attract new customers from competing organizations.  The community, or Canada as a whole, even has a stake in Bell because of Bell’s stature as a Canadian company and as a major sponsor of the Olympics.  If Bell had faltered in the 2010 Olympics and its technology hadn’t worked, the people of the world could form negative impressions of Canada as a country.

Corporate Strategies

“Corporate strategy: an organizational strategy that evaluates what businesses a company is in, and what it wants to do with those businesses“[32].Bell Canada is a communications company that is involved in many different businesses. The company provides services such as Internet, telephone (landline, wireless, and voice over IP), as well as information and communication technology. They provide these services to residential, small and medium businesses, governments and large enterprises [13].

One of the corporate strategies Bell uses is a growth strategy. This is “a corporate strategy that seeks to increase the organization’s operations by expanding the number of products offered or markets served either through its current businesses or through new businesses”[32].  They have done this by using a combination of the concentration and vertical and horizontal integration techniques.

Using the concentration technique, they have focuses on their different types of businesses and expanded the types of products and services that they offer[32]. For example, in the wireless products and services division they have a complete collection of wireless products (smart phones, mobile devices, etc) and services as well as offering their “Value Added Services” (call display, voice mail and data to name a few). They offer all of these services to residential and business customers as well as offering different pay options and plans [30].

Vertical integration “is an attempt to gain control of inputs (backward vertical integration), outputs (forward vertical integration), or both”[32]. Bell uses this method by being one of their own suppliers, creating Bell owned stores across the country to sell their services from. Bell has continued the backward vertical integration, be also providing online shopping services on their website [13].

Horizontal integration is when “a company grows by combining with other organizations in the same industry” [19]. Bell has used this approach by creating and obtaining the Solo Mobile and Virgin Mobile Canada brands.  This is in addition to providing wireless services under their Bell Mobility brand name [30].

Business Strategies

A business strategy is “an organizational strategy that focuses on how the organization will compete in each of its businesses”[32].Different products and services make up different divisions within the company. Bell is split up into different services, as mentioned above. These divisions create their own business strategies, “strategic business units” (SBUs), to best suit the goals of each specific business[32].

Bell also uses the competitive advantage strategy. This is a strategy that focuses on unique products and services that distinguishes the company from its competitors. As stated in the “Management” textbook, competitive strategies are assessed by the 5 forces that decide the rules of competition are threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers and currents rivalries [32]. Once managers assess the threats and opportunities, they choose one of four strategies, cost leadership, differentiation, focus, or they are stuck in the middle. Bell Canada is stuck in the middle. They use the cost leadership strategy in their sales techniques by offering industry competitive prices, as well as implementing many cost saving procedures, such as using online services for billing as well as shopping[18]. Bell uses differentiation by maintaining their reputation for being Canada’s leading innovative communications provider. They also pride themselves in their effort to have the best customer service in the industry, as seen in their customer commitment:

 “Our customer commitment:

Delight.
Yes, delight. Simply put, that's our mission: To delight you with the products, services and customer support that we provide to you every day.
It's more than just talk. It comes with a commitment. Here it is: 

  • We will bring you outstanding products and services that can help you in your daily life;
  • We will strive to provide you with the products and services that you want;
  • We will remember that technology can be fun, and excite you with creative and useful new product innovations;
  • We will strive to ensure that pricing information is presented clearly;
  • We will be helpful and courteous in your dealings with us;
  • We will strive to be accessible to you through the medium of your choice, whether it be online, in-store or by phone.” [15]

Corporate Structure

George Cope took over as CEO of Bell Canada Enterprises (Bell) in July of 2008 [17], during a failed purchase and attempted privatization of Bell by a group led by the Ontario Teachers’ Pension Plan. This also turned out to be at the beginning of the largest recession since the Great Depression.  The company he took control of was a very traditionally structured divisional, vertical and centralized company, which combined to create a very mechanistic organization. 

Being in, what Bell terms as, the wireline and wireless communications industries, offering specific plans for its many services, like home and wireless telephone service, television and internet, divisional structure works well for the company.  In order to sell and then deliver these services optimally, Bell has organized its management into product departments, wireline, which “provides local telephone, long distance, data (including Internet access and information and communications technology (ICT) solutions) and other communications” [30] and wireless, which “provides wireless voice and data communications products and services” [13].  These departments are then split into geographic areas to give managers regions to control.  Managers are directly responsible for the performance of their regions which is reinforced by a “pay-for-performance culture” [13].

Bell currently has between 50,000 and 55,000 employees [13].  These employees are managed by seven layers of management, making eight “layers from the customer to the office of the CEO” [13].  This makes for a small span of control for each manager, giving them only four to five employees to oversee.  Before George Cope took the position of CEO, the span of control was even smaller.  In 2008, Cope “removed three layers of management” and “approximately 2,500 [managers], representing approximately 6% of the total Bell workforce or about 15% of management”[20].

Because of the industries that Bell is in, it needs to have standardized plans so that customers can understand the value, or price, of the service they are purchasing.  To keep these plans standardized, most decisions are made high up the management ladder.  In the Wireless department, there are at least 4 levels of management, Assistant Manager to Manager to District Manager to Regional Director, before any decisions regarding plans can be made.  This need for control in their product plans makes Bell a very centralized company.

Seeing that Bell has a divisional, centralized management structure with a very small span of control for managers, shows us that Bell is mechanistic in nature.  Bell needs to have rigid rules and regulations in place in order to efficiently sell its wireline and wireless services.  Without this mechanistic structure, Bell could run into many different issues, from employees or low level managers offering plans that lose the company money to breakdowns in the services that Bell has promised to its customers.

Ethical Issues/Social Policies

Bell, being a large company, has a lot of social responsibility.  Their ethical choices reflect on smaller companies, as bigger companies have the ability to dictate, through their actions, how ethical issues can be handled. 

Bell clearly states that it is “an active corporate citizen, engaged in improving the well-being of society by enabling economic growth, connecting communities and safeguarding the environment.” [13] This is an excellent ethics policy that contains a wide variety of safe guards and checks.  It is a generic policy as it covers almost everything.

This is an “Integrative Social Contract”[32] method of dealing with social responsibilities.  This means that they tend to choose their ethics based on the norms of the other companies around them. Other companies like Rogers, Telus, and Shaw.

While they have an excellent social ethics policy now, Bell has had a tumultuous history in its dealings with its employees.  In 1999, they had a case against them at the Canadian Human Rights Tribunal where, after a court order to pay their female employees equal pay[31], Bell chose to wait instead.  This was still going on ten years after the case had originally started [18].

They have changed so completely in that, with their current direct dealings with employees, Bell has instituted a fair pay structure and policy.  A significant enough move, in combination with their ethics policy, to garner them a “10/10 score, for the 6th consecutive year, from rating agency GovernanceMetrics International in its global corporate governance study” [17].

This aside, Bell has an excellent track record of corporate responsibility.  They are involved in their community through the Kids Help Phone and their employees volunteer their time to more than 800 no-profit organizations for a total of 441,500 volunteer hours [24].

Bell has a strong stance when it comes to the environment.  This includes the recycling of phones, paper and cutting down on carbon emissions.

Corporate Policies

Bell provides a workplace that is free of all types of harassment and is committed to providing a safe environment for all workers. Bell “prohibits all types of unlawful discrimination, including harassment, whether directed against an individual or group, including employees, customers, suppliers and shareholders” [25]. A Bell “employee who believes that he or she is being unlawfully discriminated against should tell the person to stop immediately” [25]. However, if the behaviour continues then the employee should advise a superior about the situation.

“Bell regards health and safety as a corporate priority. [Even more,] Bell will ensure that effective policies and practices are in place to protect the health and safety of its employees, contractors, customers and the public” [25].

Therefore, the company will “meet or exceed all health and safety legal requirements; provide proper supervision, training, and equipment” [25].  Bell will also ensure that “business decisions made at all levels of the organization take into account the Company’s health and safety commitments” [25].

Bell “prohibits all acts of physical, verbal or written aggression or violence”. The employees involved are to report the incident to a manager or Corporate Security. In a serious situation involving danger, the police should be contacted and Bell will take immediate action as required.

Bell’s “belief is that having a diverse workforce that is representative of [their] customers makes good business sense, enabling [them] to gain better insight into [their] customers and for [the customers] to conduct business with [Bell]” [23]. Bell focuses “on the four designated groups under the federal Employment Equity Act – women, visible minorities, aboriginal peoples and persons with disabilities – Bell complies with EE requirements aimed at removing employment-related barriers in recruiting, retaining and promoting members of the designated groups” [25].

Corporate Leadership

Bell has an expectation of its employees that includes the ability to work in a dynamic environment, desire to have a long career there, and for some management positions, bilingualism. These help nurture a culture that has a steady and younger group in management positions. [16]

Bell’s website states that it wants to “create a culture within the Company that supports the achievement of strategic and operational objectives by ensuring rigor in the recruitment, selection, individual development and the monitoring of executive team members and other senior management personnel, thus ensuring the Company maintains a strong succession plan.”[16]

Employee and management review website GlassDoor.com, a site that allows employees to submit reviews on the management and company that they work for, ranks Bell at 2.9 out of 5 for Company Ranking and gives CEO George Cope and approval rating of 62% [26]. These rankings show that Bell and its top leadership, George Cope, have an overall positive rating.  Its middle management has understandably poor reviews.  Middle management, in general, has a difficult position as they are stuck in between the upper management and its employees [26].

The culture itself is one of encouragement. One employee stated that:

“…By working for Bell [I] feel proud of the accomplishments we have achieved in a very changing telecom market. As a manager [I] am treated well and [I] try to treat my staff well. In a company this size it is hard to make every employee happy - however Bell seems to be doing a good job in these tough economic times.”[26]

Informal information about Bell Team orientation is something that is encouraged, as a large portion of their training comes from corporate peers.  Bell is concerned with outcomes and has a vertical organizational structure that exhibits that [19].

In the cell phone market they are fairly aggressive which carries over into their desire for having innovative employees.  These innovative employees are intended to become the leaders for Bell.

Controls

“Control: A Process of monitoring activities to ensure that they are being accomplished as planned and correcting any significant deviations” [32]. Bell Canada practices many financial controls, using goal and budget analysis, statistical, written, and oral reports. With shareholders and investors at stake, they make their quarterly and annual financial reports public and available online [28]. Bell Canada also has received the “Governance Metrics International’s highest rating of 10.0. The rating system covers six broad categories of analysis: board accountability, financial disclosure and internal controls, executive compensation, shareholder rights, ownership base, takeover provisions, plus corporate behaviour and social responsibility” [17].

Since its inception in 1880, Bell has been a large corporate entity and it still continues to be so today.  This shows in all the areas it does business, whether it’s their vertical mechanistic structure or that their stakeholders seem to be the entire country and population of Canada or the effect that it has on the technological advancement of the telecommunications industry.  If Bell can continue along the path that it has for the last 130 years, it should have no problem reaching the 150 or 200 year milestones.

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Comments

Sep 3, 2012 8:31pm
WilliamMoulton2
You might want to check your footnoted links, several didn't work. I'm guessing from your comment in the forum footnoting is a new thing. Thanks for blazing the way. It makes me more comfortable with the idea of posting my scholarly material.
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