Reorganizing AT&T: From Vertically Integrated to Customer-Centric Organization (A)

In spite of its earlier failures, AT&T's management decided on further expansion in their computer business. This expansion was an attempt to realize the synergies that the management believed existed in integrating the computing and communications businesses. In 1990, Allen became AT&T's Chairman and CEO. He started looking for a computer company that AT&T could acquire. AT&T identified the Dayton-based NCR Corporation (NCR), a company which reported a profit of $400 million on $6 billion revenues in fiscal 1990. NCR was particularly strong in open systems, especially computers running on UNIX, and its customers were concentrated in the banking and retailing sectors - sectors that AT&T felt might also profit from more investments in telecommunications...

AT&T also began to leverage on its technology and huge financial muscle to gain access to a few of the world's toughest telecom markets like Japan and European countries. In 1991, AT&T's hard-hitting commercials and sales efforts helped in slowing the erosion of its market share to a certain extent. Apart from focusing on the computer business, AT&T also paid attention on the emerging wireless markets. In 1993, AT&T announced a merger with McCaw Cellular Communications, the largest provider of cellular service in the US. The acquisition was later renamed AT&T Wireless. In spite of its renewed focus on international operations, AT&T suffered operating losses in Europe, Japan and other units outside the US during the period 1992-95...