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Krannert
Krannert Graduate School of Management
Fall 1980
Purdue University
AT&T President Delivers 1980's First IVIanagement Lesson
Explaining the purpose of new- student orientation, the Krannert master's program catalogue states, "Orientation is the beginning of the program, not a prelude to it." The truth of those words was validated as 1980 Distinguished Executive Lecturer William M. Ellinghaus gave ^4 entering master's students their ™st lesson in management during orientation on August 26.
In his keynote address, the Amer¬ ican Telephone and Telegraph Company president said, "1 hope you will forgive me if 1 start with what may seem obvious: central to all business management is the making of decisions, usually in the absence of sufficient information to be certain they're right."
Ellinghaus went on to explain that no two challenges requiring decisive action are ever quite the same or can be overcome with the same "tried and true formula." Illustrating the need to balance interests—often conflicting ones—and to maintain a flexible approach, he described four "challenges" he has faced during his forty years with the Bell System: the telephone service crisis and follow¬ ing the seven-month strike in New York City in the late 1960's, the des¬ truction by fire of a large New York telephone switching center, the Bell System's reorganization in 1979, and his role as chairman of "Big ^ac" (Municipal Assistance Corpo- Btion) formed in 1975 to lead New I Ork City back from the brink of bankruptcy.
His description of events related to these four challenges showed the recurring need for often quick, always risk-filled decisions and the need to balance interests. Speaking of the service crisis and strike, Ellinghaus said, "When both . . . were over, we had gained a new appreciation for the importance of strength and balance in both our technological resources and our people skills . . ."
AT&T's 1979 reorganization turned "upside down ways of oper¬ ating that had evolved over a hundred years." In the early seventies "we knew we had to move from being an engineering oriented company to a marketing oriented company ," and by the late seventies "it became apparent we would need to change our operating structure, too," Ellinghaus said.
But in this case, he noted, "we were not reaching out to resolve a specific crisis" in the change from organization by function (service, installation, etc.) to organization by market (residence customers, busi¬ ness customers, communications paths and connections). "Rather, we were seeking to avoid future crises by strengthening the business in its ability to meet the needs of its cus¬ tomers and—through that—its responsibilities to share owners." The restructuring had its costs and uncertainties, Ellinghaus admitted, but it did not create the mass chaos observers predicted and has already strengthened service.
Ellinghaus cited New York City's financial crisis as an example of managers' obligation to support the community that supports them. He commented that "the community eagerly solicits our help largely because business managers have a
"There is no such thing as a sure thing in business decision making. If the outcome is certain, there's really no decision to be made."
reputation for making necessary decisions."
At the close of his lecture, Ellinghaus said to his listeners, "I hope I've given you some insight into the varying demands for busi¬ ness decision-making that you may have to face—demands often of cri¬ sis proportions." Clearly, for the entering class, management educa¬ tion had begun.