Needs to include discussion of the issues and/or problems case study TEOCO

Running Head: Principled Entrepreneurship And Shared Leadership: The Case of TEOCO (The Employee Owned Company)

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Evaluation Case Study Analysis

Southern State University

BU-502 Applied Business Research

Introduction, Situation, Questions: Raushan Ibrayeva

Analysis: Yepsis T Cabrera.

Long Term Plan, Short Term Plan: Hussein Kichwabuta

Risk and Alternatives, Conclusion: Kamila Chindaliyeva

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 2  

Introduction

Choices are the main builders and breakers of most of the choices that are made in these

modern times. In a case of an organization or rather, a company, it is vital to maintain a high

level of choice making at all times since any choice made can easily be the major breakthrough

of an organization or its major break. This essay will be developing a cutting edge look into a

case study organization that is growing and seems to be facing several challenges along its

growing state. This study will point out the situation as well as the main questions that need to be

asked and dealt with.

Situation

TEOCO is a telecommunications organization that has had a tough background but has

successfully grown to become one of the biggest company in telecommunications in the North of

America. The company has been under the leadership of Atul who is also the founder of the

organization. The company was developed from the ground level up and Atul believes that the

organization needs to remain as independent as possible and must be able to maintain a solid

culture if it is to succeed. However, the company is fast approaching a stagnant state where it is

not able to expand further and this is becoming a looming challenge. However, Atul does see it

important to look into potential mergers and partnerships that will make it possible to maintain

the organizations trend while improving its growth and performance rate (Thompson, 2015).

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 3  

Questions

As much as Atul believes that the company can maintain its simplicity and still be a

successful organization, he should also ask himself what the lack of a capital rise and business

improvement can do to the company. Considering that Atul believes in maintaining its culture, it

is more of a challenge as the starting culture that built the organization is a simple set up that was

developed to build a startup company. Atul needs to look into newer ways of making the

organization culture adapt to an international and multinational set up instead of relying on its

startup principles. Change is a move and shift the company needs to accept and acknowledge

(Thompson, 2015).

Analysis

Shared Leadership:

At TEOCO, the company maintains that their success has been due in great part of the

multidirectional leadership model implemented by the owner. The shared leadership strategy is

cemented on the idea of distribution of power and responsibilities within the company’s

management, this approach is believed to “combine their strengths and eliminate their

weaknesses” (Calo, Roche & Shipper, pg.22). Atul Jain is the company’s founder and CEO of

the company, whose contribution to the company is his financial management and the evaluation

of future employees. The next member of the leadership is Philip M. Giuntini, Vice chairman

and president of the company. John Devolitesas the General Manager of the company is

accountable for clients and project recommendation. His previous experiences with companies

like Telecordia and PriceWaterhouseCoopers, provide him with the expertise to create the ideal

business relation with the clients. The purchase of TA brought about the addition of two new

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 4  

members to TEOCO’s board of directors. Additionally, as a result of the acquisition of TTI,

Eitan Naor was the third and last member to be incorporated to the board. As a consequence of

the new acquirement of TA and TTI, the dynamic leadership might be compromised by the

addition of new members to the leadership team.

The purchasing of TA and TTI is an unparalleled business opportunity for the company’s

financial longevity. TEOCO’s list of clients has increment substantially, permitting the company

for the acquisition of long-term international consumers. Nevertheless this changes has also

brought upon a level of uncertainty, the impact that they might have on the overall environment

of the company it’s still undetermined. The success of the integration of the companies will

highly depend on their ability to assimilate to the shared leadership model that TEOCO

management subscribe to. Even though the concept of shared leadership has been gaining

recognition in the last decades, according to Bumpei Sunaguchi, the idea was introduced since

1920’s. Numerous researches have employed the aggregation approach and the social network

theory, to examine the effectiveness of this methodology. They have found a direct correlation

between the effectiveness of shared leadership in creating strong ties with employees.

Furthermore, IT related researches have made emphasis on the efficiency that it can generate on

the employees regarding team work and communication skills of. Nevertheless, this success has

been contingently attributed to “group size, generalized exchange norms, tasks that require role

differentiation and exchange relationship” (Sunaguchi 2015, pg. 201). Factors that will be

undoubtedly directly impacted by the incorporation of three hundred employees that have

become part of the TEOCO Company as a result of the acquisition.

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 5  

Employee Ownership:

A solid culture based on values, is promoted from the management to the lower

employees that integrate the TEOCO Company. Since its foundation, the companies have

instated policies to promote the involvement of the employees to a deeper level. As result of their

investment should translate in to a tangible dedication and complete commitment with the

company’s goals. This style of “ownership culture” (Calo et al, pg.23) management has been

promoted and reinforced through various technique within the company. All existing employees

are involved in the decision-making process of the company. Promoting an open flow of

information from the bottom up and vice versa, the leadership managerial approach is focus on

the constant interchange of comments and ideas from all employees. Furthermore, new and

current employees are offered generous yearly bonuses and stock ownership of the company. As

Mr. Atul states, the majority of the employees agree to invest in the company. A fact that is a

positive sign of the perception that employees really hold of the company, that they are willing to

trust the company beyond the common employee and employer relation.

A controversial strategy to replace the 401K with an ESOP plan was put into practice.

The ESOP approach was not immediately accepted by all the leaders of the company, as a result

it was not approved until all leaders agree to this measure. Regardless, CEO Atul felt that it was

a necessary that all employees were participants on the ESOP plan, for full emergence with the

company and its future. One of the elements that will need to be present for the ESOP model to

succeed, it’s an employee own culture and continuous financial resources. Characteristics that

are the foundation of the TEOCO’s success in the IT market through the years.

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HR Policies and Practices:

The innovative and modern idea of viewing Human Resource department as an

instrument to further the company’s message of inclusiveness, employee’s ownership and direct

remuneration based on employee’s performance. The method of employee ownership provides

members with benefits and responsibilities, this information is constantly shared through

different communication channels in the company. CEO Atul believes that it is critical to be a

part of the hiring process and be constantly involved with the daily company life of the

employees. The company’s CEO is recognized for developing a constant presence in the

company, the majority of the employees have a positive concept of the leadership. Based on the

“Strategic Human Resource Management Practices and Organizational Growth: A Theoretical

Perspective” article, human resource management can play a major role on the growth of the

company. The benefits that this department can provide to by selecting, training, placing and

rewarding employees; it’s vital to a company’s longevity. Leadership plans to continue with the

business practices that they have subscribed to since the origins of TEOCO. They are hopeful

that even though it might prove challenging they will be able to adapt both companies’ TA and

TTI to their business culture.

Long term plan:

Basing on the analysis of all factors we can recommend several steps to be undertaken to

overcome the challenges and for future development of TEOCO.

The culture of TEOCO should ensures that it is continuously reinforced. This culture

should be founded upon the core values of the company. As it is expressed, as ‘living up to your

values. “Those values are rooted in a business philosophy that calls “principled

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 7  

entrepreneurship,” which defines as “a business where you have a set of values and you commit

to living up to those values while trying to create business success. “also should specifies, “They

have to be a clear set of articulated values.” In describing the success, “what motivates them is to

make as big a difference as they can for as many people as they can. And wouldn’t in it solely

for the money.” Therefore, TEOCO should have a clearly articulated set of core values and a

very distinct culture. Also the TEOCO’s ownership culture should be embedded in the company.

As an employee owned company, that means all employees will need to buy and own TEOCO

stock. It is strongly believes that the environment created by employee ownership leads to better

organizational performance and stronger employee commitment.

Short term plan:

TEOCO should have a strong culture and a loyal workforce that is to sustain them and

adapt them in the face of organizational change. Over a very short period of time, TEOCO need

to be stable on its capital structure and expanded its business. How and to what extent TEOCO

manages these changes will determine whether it maintains its competitive advantage and,

finally, what will be its overall fate.

Risks and Alternatives.

During the analyzing the case TEOCO you can figure out three main risks for the

company:

1. Company is growing, and it becomes harder to hold back the value of the company –

employees are the owners of the company. It is too many people with different cultures. Getting

harder to keep values with so many employees.

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 8  

2. The increasing number of employees led to create A-team. All people as managers as

other employees can come and ask them to put up for discussion their questions in a manner “I

wish I knew ...”. This team choosing which question to ask, which are less important.

3. Atul as a CEO also he is a Chief Human Resource Officer. It is getting harder to hire

more and more people. Takes more time, when his main duty is to take tons of decisions for the

company.

Below we will try to explain why it is risky and what are the alternatives.

The first risk is difference of the cultures can be cause of loosing the main value of the

company. This would lead to become TEOCO normal company where people work only for the

salary, no motivation. It is harder to manage the company and track every employee even

TEOCO famous with its public relations.

The second is A-team. It is clear that all 1300 people can not ask questions during 60-90

minutes meetings, but what if the questions that were chosen by A-team did not include more

important issue that need to be discussed on “All Hands Meeting”. In this case there should be

alternative method to reach the managers. One of the alternatives is to create module where all

people can ask a question directly from the leaders, this would lead to closer communication

between leaders and employees, without hoping to A-team: will they choose your question or

another.

The last risk is Atul’s priceless time. As we know TEOCO is getting a huge company.

For nowadays they have offices in more than 15 countries and counts more than 1300

employees. Their offices located allover the world: North America, South America, Europe,

Africa, North Africa, Middle east, Asia Pacific. Only in North America they have 8 offices. This

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 9  

prevalence gives both pros and cons. The pros are business development, big monitory turnovers,

the world fame, when cons are culture difference, big amount of employees leads to big issues.

Despite such a difference in cultures and locations, their main value is still employees. Even

slogan of TEOCO sounds like “We’ll take care of our employees, they’ll take care of our clients,

and that will take care of the business”. As we can notice from the slogan the company pays a lot

of attention to its employees. Atul as a founder puts human resource to the strategic level and he

is even Chief Human Resources Officer. He takes participation in hiring new people, he knows

each of them and decides whom to hire whom not. This is a pros but at the same time this is a

cons. This is a risk for the company. Because the company is growing, more people are working

for the company and more people are willing to work in this company. And Atul is spending

more are more time to this, when his main responsibility is to make tons of decisions for the

company. In this case would be better to give the Human Resource Department this

responsibility and distract Atul’s attention from the ruling the company only when it touches

hiring people for the leading positions. This would save time for the CEO, make him be focused

on a company’s significant issues.

Conclusion

TEOCO is a great company, which is getting bigger and has even bigger prospects. Their

main value is their employees, they keeps them successful so long and makes them different

from other organizations. Atul as a founder with his talent in statistic and his family upbringing

made a wise decision by sharing the ownership with employees. This decision made them

motivated and work harder because the successful company is successful the employee

Principled Entrepreneurship And Shared Leadership: The Case of TEOCO 10  

themselves, they would get more bonuses and also this motivation makes people feel themselves

like in a big family, where each person is willing to help you.

As a founder Atul do not have a talent in making a business. But it did not bother him a

lot, he found helpers Philip M. Giuntini, Vice chairman and president of the company and John

Devolitesas the General Manager of the company. Atul build the atmosphere, showed the

philosophy, value of the company and its aim. Where John Devoliteas is responsible for the

clients and business plans and Philip. M. Guintini he is responsible for organizing this plans.

As times goes the company is acquiring the other companies, which brings not only new

ideas but also new talents. One of the first huge acquisition was TTI, it was first company with

300 employees almost the same amount at that time had TEOCO. TTI is a company from Israel.

This acquisition brought new people, new ideas where TEOCO can move now.

For now company has offices worldwide spread and has long and short term plans how to

move on in a future.

But all these plans and changes brings some risks. The growing company has as cons as

pros. Cons are getting difficult to control the big machine which involves different countries and

cultures, also it makes difficult to control each employee and motivate them even more.

For Atul, his helpers John and Philips and their motivated employees these changes

should not be a big problem because they are experienced and they are experts in what they do.

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Reference

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3 Flinchum, M. A., & Etkind, S. (2014). Using an ESOP as an ownership transition strategy in professional services firms. The CPA Journal, 84(4), 64-66. Retrieved from https://search.proquest.com/docview/1534116327?accountid=151051  

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